Stewardship & Ownership
The PRI defines stewardship as: “the use of influence by institutional investors to maximise overall long-term value including the value of common economic, social and environmental assets, on which returns and clients’ and beneficiaries’ interests depend.”
Stewardship can be implemented through a variety of investor stewardship tools, including tools that use investors’ influence over current or potential investees or issuers such as:
- engagement with current or potential investees or issuers across all asset classes;
- voting at shareholder meetings;
- filing of shareholder resolutions/proposals;
- direct roles on investee boards and board committees;
- and, where necessary, litigation.
Stewardship can also be implemented by investors using their influence over policy makers and other non-issuer stakeholders, such as:
- engagement with policy makers;
- engagement with standard setters;
- contributions to public goods (such as research);
- public discourse (such as media) that supports stewardship goals;
- and negotiation & monitoring of service providers in the investment chain (e.g. asset owners engaging with investment managers.)
Fiduciary and other duties exist to ensure that those who manage other people’s money act in the interests of beneficiaries. As a critical tool for addressing sustainability risks in portfolios and maximising overall long-term value, stewardship is considered to be part of investor fiduciary duties.
Steward-ownership creates the foundation of ownership of a company based on the principles of self-governance, self-ownership to drive purpose and “recycle” the profit.
The goal is to use profit to mobilize a long-term positive impact where the companies are not treated as “commodities” but as an active eco-systems of investors, investees, management, employees, local communities. There are three main models: Golden Share, Neutralised Capital and Shareholder Foundation. We like to assist businesses to put steward- ownership into action.