As we step into 2024, the importance of stewardship in investment has never been greater. The role of Asset Managers is pivotal in ensuring long-term value creation. This blog outlines how asset managers can maximise their impact and make the most of their stewardship activities in 2024.

Deepen Engagement Practices

Engage proactively with investee companies on strategy, performance, and governance. Regular, meaningful dialogue helps address potential risks and opportunities early. Integrating stewardship into the investment process aligns investment goals with long-term stewardship objectives. This seamless integration ensures that all decisions reflect the best interests of your stakeholders.

Top Tips: 

• Engage proactively with investee companies on strategy, performance, and governance.
• Integrate stewardship activities into the investment process.
• Align investment goals with long-term stewardship objectives.

Enhance Voting Strategies

Use your voting rights strategically to influence corporate governance positively. Make voting decisions based on thorough analysis to reflect long-term investor interests. Inform companies in advance when voting against management or abstaining. Provide clear reasons to foster transparency and constructive dialogue. This practice not only builds trust but also encourages better corporate practices.

Top Tips: 

• Use voting rights strategically to influence corporate governance.
• Make voting decisions based on thorough analysis.
• Inform companies in advance when voting against management or abstaining.
• Provide clear reasons for your voting decisions.

Collaborate for Greater Impact

Collaboration is crucial. Partner with other investors for collective engagements. Collective efforts amplify influence on companies and address systemic issues more effectively. Participate in industry forums and collaborative initiatives to share best practices. This cooperation drives broader changes in the market and promotes a unified approach to stewardship. 

Top Tips: 

• Partner with other investors for collective engagements.
• Participate in industry forums and collaborative initiatives.
• Share best practices and drive broader changes in the market.

Address Conflicts of Interest

Maintain and disclose robust policies for managing conflicts of interest. Ensure these policies do not hinder your stewardship activities. Implement independent oversight mechanisms to monitor these activities. This independent monitoring ensures that potential conflicts are managed transparently and do not compromise engagement efforts.

Top Tips: 

• Maintain and disclose robust policies for managing conflicts of interest.
• Implement independent oversight mechanisms to monitor stewardship activities.
• Ensure conflicts do not compromise engagement efforts.

Focus on Thematic Engagements

Prioritise environmental, social, and governance (ESG) related risks proactively. Addressing these themes leads to more sustainable business practices and long-term value creation.

Improve Stewardship Transparency and Reporting

Regularly report stewardship activities and outcomes to clients. Provide detailed insights into engagement and voting efforts. Enhance public disclosure and include case studies and summaries of engagement outcomes. This fosters greater accountability and trust among stakeholders.

Top Tips: 

• Regularly report stewardship activities and outcomes to clients.
• Provide detailed insights into engagement and voting efforts.
• Enhance public disclosure and include case studies and summaries of engagement outcomes.

Selecting the Ideal Tech Partner for Effective Stewardship

Choosing the right tech partner is essential for effective stewardship. The right technology can streamline engagement processes, enhance data analysis, and improve reporting capabilities, making your stewardship efforts more efficient and impactful. Detailed blog here. 

Top Tips:

• Assess Needs: Identify your specific technological needs for stewardship activities. Consider what tools and features are essential to your process.
• Evaluate Expertise: Ensure the tech partner has proven expertise in ESG and stewardship technology. Their knowledge should align with your strategic goals.
• Integration: Confirm that the technology integrates seamlessly with your existing systems. Compatibility is crucial for smooth operations and data flow.
• Scalability: Choose a solution that can scale with your growing stewardship needs. The technology should adapt as your activities expand.
• Support and Training: Ensure the partner offers robust support and comprehensive training for your team. Effective onboarding and ongoing assistance are vital for maximising the technology’s benefits.
• Reputation and Reviews: Look for a partner with a strong track record and positive client reviews. Their reputation can provide insight into their reliability and performance.

Looking Ahead: The Importance of Stewardship in 2024

Asset managers must continue to embrace robust strategies to drive positive change. Effective stewardship practices ensure long-term value creation for investors and society. By deepening engagement, enhancing voting strategies, collaborating, addressing conflicts, focusing on thematic engagements, and improving transparency, asset managers can maximise their impact in 2024.