Engaging with companies

Engaging with companies

PLSA members continue to own significant shareholdings in UK companies. We regularly engage with the companies in which pension funds invest on issues including board structures and executive remuneration.

We also help members by organising Case Committees through which specific company problems can be addressed directly with Boards on a confidential basis, and provide guidance for engaging with companies, including our Corporate Governance Policy and Voting Guidelines for company AGMs and our toolkit for monitoring corporate cultures and workforce-related issues.


We publish on a monthly basis topical questions to aid trustees in questioning the effectiveness of their managers’ stewardship activity.

The Pensions and Lifetime Savings Association encourages funds to utilise these questions during their regular manager reviews in an effort to gain a greater understanding of their investment managers’ approach and activity and to ensure that they are adhering to the funds’ own stewardship policy.

March's topical question for your manager

Background: The Financial Conduct Authority has published a new essay collection looking at organisational culture – the PLSA’s submission to the FCA’s consultation on the governance of the asset management industry highlighted the importance of cultural factors such as pay practices and diversity in affecting the value for money provided for clients including pension funds.

Question: How do you assess and measure the quality of the ‘culture’ both of your organisation and the companies you invest in? How are your pay practices and workforce diversity, for example, shaped in order to foster a positive culture

February's topical question for your manager

Background: The Carillion affair has raised the question of sustainable dividend payments and executive accountability over pay, after the company collapsed, despite making substantial dividend payments in previous years, and the executives were able to keep bonus payments made in previous years.

Question: Do you quiz companies over the sustainability of their dividend payments, and insist on clawback procedures in the event of Carillion-related failures? Can you provide examples of how clawback procedures have been successfully applied at companies you invest in?

January's topical question for your manager

Background: The £100m pay-out to Persimmon Chief Executive of Persimmon has attracted public criticism and resulted in the departure of the Company Chairman, who failed to set a cap on a 2012 share award, prior to the introduction of the Governnment’s ‘Help-to-Buy’ scheme which contributed a huge boost in the company’s share price. However, the scheme was overwhelmingly approved by investors in 2012, and only 10 per cent endorsed the remuneration report in 2016.

Question: How have you voted on remuneration policies and reports at Persimmon in recent years? Do you support the nine-figure payout to the Chief Executive? And are you insisting on caps on the value of future share awards?

December's topical question for your manager 

Background: The PLSA’s new guidance for pension funds on climate change discusses the importance of engaging with companies in sectors such as oil and gas, mining, utilities, automobiles, financial services and food production as to how they are ensuring their business models are compatible with global greenhouse gas reductions targets. Failure to adhere to these targets will have disastrous economic, social and environmental consequences.

Question: How have you engaged with companies in these sectors over climate change? What successes has your engagement achieved in terms of making your portfolio more resilient to the impact of climate change on investments?

November's  topical question for your manager

Background: The PLSA’s new research highlights the limited disclosures provided by companies regarding their employment models and working practices.

Question: How have you engaged with companies to better understand their working practices? What information do you have to give confidence that your investee companies have the secure, skilled and committed workforce necessary to execute their long-term strategy?

October's  topical question for your manager

Background: Concern has been growing that the lending activities of car manufacturers could be a future source of economic instability, with the loan exposure of the major European manufacturers reaching $400 billion according to reports (£).

Question: Have you engaged with carmakers over the extent of their lending, and are you satisfied that their activities represent prudent commercial sense? To what extent could lending by carmakers represent a risk to economic stability, or prove a threat to these companies in the event of an economic downturn?

September's topical question for your manager

Background – Ten years on from global financial crisis, there is a twin focus on lessons learned over the course of the past decade, and what might be the source of the next crisis

Question – The investment industry was caught badly off guard by the global financial crisis - how have you changed your research and engagement activities to ensure this doesn’t happen again? What markets, risks and sectors are you most concerned about, in what is still an uncertain economic environment?

August’s topical question for your manager

Background – The subject of executive pay continues to be a subject of public controversy, involving pension funds in their roles as investors. CEO pay fell by 17 per cent last year to a mere £4.5 million according to the High Pay Centre. The Investment Association has suggested that holding individual directors to account over corporate pay practices has become more commonplace, but critics have argued that the change is just a reflection of stock market fluctuations, and that a change in the excessive pay culture isn’t happening at all.
Question – How have you held investee companies to account over their executive pay practices in 2017? Where you voted against pay policies or pay awards, did you also vote against the re-election of remuneration committee members as Directors?
July's topical question for your manager
Background: The final report of the FCA’s asset management market study highlights weak price competition and sustained levels of very high profits in the asset management industry, suggesting that asset managers often fail to control costs and deliver value for money for their clients, including pension funds. The study proposes a package of new reforms, including greater independent governance of investment funds and more detailed disclosure of costs accruing to clients.
Question: Why does the cost we pay for investment management represent value for money? How do you control costs and charges, such as transaction and research costs, and what governance measures do you have in place to ensure that your fund delivers value for money to clients?
June's topical question for your manager
Background: A recent Reuters article noted the wide variation in ESG ratings given to the same investments by the different ratings agencies that are paid by investors to carry out research. This suggests that at least some of the investors paying for research on ESG issues may not be getting accurate results.
Question: How do you assess and value the ESG-rating of different investment propositions? If you pay an external research/ratings agency, why do you have confidence in their conclusions?
May's topical question for your manager
Background: A new guide published by the PRI and the UN Global Compact has noted discrepancies between corporate sustainability plans and the investment practices of their corporate pension plan. 50 per cent of the world’s largest corporations are signatories to the global compact on sustainability, but only 10 per cent of their pension plans are signed up to the PRI’s principles of responsible investment. The guide authors suggest that corporate pension plans commitment to sustainable investing will be critical to the achievement of the UN’’s Sustainable Development Goals.
Question: Are your investment practices compatible with our sponsor organisation’s sustainability commitments and the UN’s Sustainable Development Goals?
April's topical question for your manager
Background: The Barclays Chief Executive Jes Staley was recently reprimanded for seeking to identify a ‘whistleblower’ who had expressed anonymous concerns about an appointment to a senior position at the company. The Financial Conduct Authority and the Prudential Regulation Authority are now undertaking an investigation into his conduct.
Question: Do you believe that the Barclays Chief Executive’s position is tenable in light of this issue? What assurances do you require in terms of ‘whistleblowing’ procedures to protect companies you invest in from damaging scandals?
March's topical question for your manager
Background: The Green Paper on Corporate Governance reform emphasises the role of stakeholder engagement in corporate governance processes and new regulation in this area seems likely.
Question: How important a priority are stakeholder relations for you at investee companies, and what measures do you take to monitor boards’ engagement with stakeholders such as their workers, customers and suppliers?
February's topical question for your manager
Background: BT shares suffered a sharp fall after accounting improprieties in their Italian business were revealed. Investors are now considering whether to join class actions against BT to cover losses that ensued as a result of the scandal.
Question: Will you be joining a class action against BT? What measures do you take to reduce the risk of losses owing to corporate malpractice, and to recover them when they do occur?
January's topical question for your manager

Background: Excessive executive pay remains a contentious subject, with recent research highlighting the weak link between pay and performance, while a PLSA survey of our pension fund members revealed that 85 per cent are concerned by pay gaps between executives and the wider workforce. Following this research, we published our updated Corporate Governance Policy and Voting Guidelines, with a new recommendation that investors who vote against companies’ remuneration practices should also vote against the re-election of their remuneration committee chair.

Question: How will you exert downward pressure on executive pay at the 2017 AGM season, and will you be following the PLSA’s specific guidance to vote against the remuneration committee chair when you vote against a remuneration policy?

December's topical questions for your manager 

1. Background: The COP 21 summit in Paris set out ambitious targets for the reduction of greenhouse gas emissions that many say are incompatible with the business models of major companies across a number of sectors. 

QuestionHow would a reduction in the extraction and consumption of fossil fuels commensurate with a target of global temperature rises no greater than 1.5 degrees Celsius impact on the anticipated returns from your current investment portfolio? 

2. Background: The FCA market study highlights the sustained profit margins, price clustering and high levels of remuneration in the asset management market, suggesting that these are not indicative of a fully functioning market and that a truly competitive industry with well-informed clients would have resulted in greater downward pressure on costs.

Question: What is the basis for the costs charged by your firm? What steps are you taking to offer your institutional and retail clients a more competitive pricing structure? 

November's topical questions for your manager

1. Background: Dividend pay-outs at BP and Shell have increased significantly (partly as a result of post-Brexit currency effects). The two companies accounted for approximately a fifth of total UK dividends in the year to September. However, there are ongoing concerns regarding the sustainability of these pay-outs in light of factors such as the low oil-price and rising debt levels at the companies.

Question: Do you have concerns about the sustainability of dividend payments at Shell and BP? Can you give an example of an occasion when you have promoted dividend parsimony in favour of investment in the long-term interest of the company? 

October's topical questions for your manager

Background – The Business, Innovation and Skills Parliamentary Select Committee has issued a consultation looking at corporate governance issues* including Director’s duties and boardroom diversity.

Question – How do you ensure that the Directors of investee companies fulfil their responsibilities to run the company for the benefit of its members while having regard for other stakeholders, including workers, customers and the wider community? Can you give examples of cases where you have successfully engaged with a company in order to improve the diversity of gender, social background and professional experience at boardroom level?

*(to feed in to the PLSA’s consultation response, contact Policy Lead for Corporate Governance and Stewardship, Luke Hildyard via [email protected]

September's topical questions for your manager

Background: The Securities and Exchange Commission is investigating accounting practices at ExxonMobil, including how they account for the future costs of complying with regulations to curb greenhouse gases. The investigation has prompted renewed criticism of those investors who opposed the shareholder resolution at the Exxon AGM asking the company to assess and disclose how its business model will be effected by efforts to mitigate climate change.

Question: How will companies in your portfolio be affected by efforts to mitigate climate change? How do you understand the extent of climate-related risk to your investments and what do you do to mitigate them? 

August's topical questions for your manager

1. Background: The Investment Association recently published the findings of its working group on executive pay. The report proposes a number of different models for paying UK business leaders, such as a restricted share award for Chief Executives to be held for a fixed period of years. These models could expand pay structures beyond the established practice of payments comprised primarily of a salary, annual bonus and a share based ‘long-term’ incentive plan (LTIP) awarded annually based on performance over the preceding there years.

Question: Do you intend to encourage the uptake of any of the models for executive pay proposed in the Investment Association’s working group? Do you think this will result in a reduction in the size of executive pay awards, which have been such a subject of controversy in recent years? 

2. Background: Background: A resolution at the Sports Direct AGM on September 7 will call for an independent review of the company’s working practices, following widespread criticism in the media and from a Government select committee. Concern about the sustainability of Sports Direct’s working model has contributed to the company’s share price falling to 60 per cent of its value at the time of the 2015 AGM, according to the trade union Unite. Sports Direct have undertaken a review involving Mike Ashley, the public face of the company and its majority shareholder and a law firm that has acted for Ashley on previous occasions. As such, the resolution sponsors have serious doubts that the existing review will be sufficiently independent.

Question: Will you support the shareholder resolution at the Sports Direct AGM? How have you engaged with other investee companies to ensure that their employment models and working practices are sustainable and fit for purpose? 

July's topical questions for your manager

1. Background: Investors that have signed up to the UK Stewardship Code are required to issue a public statement outlining how their stewardship practices fulfil the Code’s principles of responsible investment stewardship. The Financial Reporting Council has now written to all signatories assessing how completely their statement complies with the spirit of the code, and categorising them into two tiers, depending on the quality of their statement.

Question: Are you a signatory of the Stewardship Code? If not, why not? If so, have you been classified in the top or second tier and how will you be incorporating feedback from the FRC to ensure that you achieve or retain the highest possible standards of stewardship? 

2. Background: The Association has this week published a toolkit for pension funds, providing advice on the type of information our members should request from the companies they invest in about their workforces and corporate cultures. The report recommends specific workforce-related performance indicators that investors should ask companies to report against each year, as well as suggesting specific questions to ask of boards when meeting with individual companies.

Question: Do you ask the same questions of investee companies about their workforces, and request the same levels of disclosure in annual reports, as the standards outlined in the PLSA toolkit

June's topical questions for your manager

Background: Sports Direct founder and Deputy Chair Mike Ashley’s appearance at the Department for Business Innovation and Skills Select Committee attracted widespread media attention this week, as a result of Ashley’s introspective attitude to his oversight of the company and his claim that he was not aware of some of the more controversial employment practices at Sports Direct operations. The company fell out of the FTSE 100 earlier this year amidst criticism of the accountability of Ashley and senior colleagues at Sports Direct (Ashley’s daughter’s boyfriend to a key management position) and the treatment of warehouse employees.

Question: What issues have you raised with Sports Direct regarding their treatment of their workers and their corporate governance? Do you ask boards or management at investee companies how they understand the culture of their company and how it operates at the ‘shopfloor’ level? 

May's topical questions for your manager

1. Blackrock, the world’s largest asset manager, holds shares in 15,000 companies but has been criticised for voting in favour of 96 per cent of executive remuneration proposals. Some critics in the UK have suggested that high pay in the asset management sector makes investors reluctant to condemn a system from which they themselves benefit at company AGMs. Against this backdrop, a shareholder resolution at Blackrock’s AGM called on the company to exercise its power to address perceived excessive executive pay awards.

Did you support the shareholder resolution at Blackrock’s AGM (if applicable) and how do you ensure that your own organisation’s pay policies don’t affect your judgement when voting on remuneration awards/policies at other AGMs? 

2. The issue of executive remuneration continues to dominate AGM season, with majority votes against reports/policy at BP, Smith and Nephew and Weir Group, as well as sizeable minority votes against at RB, Anglo-American, Centrica and others. Sacha Sadan, the Director of Corporate Governance at Legal and General, has said that CEO pay relative to the average employee will be a ‘hot topic’ of 2016? 

Question: Which pay packages have you opposed at AGMs this year, and on what grounds, and do you think that pay ratios between Executives and their workers are relevant to investors? 

April's topical questions for your manager

1. World leaders agreed in Paris last December to keep global warming well below 2 degrees Celsius in order to prevent dangerous climate change. Tightening public policy may have major repercussions for the oil and gas majors in which most pension funds are invested. Last year shareholder resolutions were passed at the BP and Shell AGMs, with board support, committing the companies to disclose to investors their resilience in the long-term to a 2 degrees scenario. However, in the US, Chevron and ExxonMobil have resisted the filing of similar resolutions by investors, including Hermes and the Church Commissioners, until forced by a Securities and Exchange Commission ruling to put the resolutions (resolutions number 7 and number 12 respectively) to a vote. Investors can declare their support for the resolutions here.

Question: Will you support, or, if you delegate voting, encourage your fund managers to support, the resolutions at the Chevron and ExxonMobil AGMs which ask the companies to disclose annually to investors their resilience in the long-term to a 2 degrees scenario? 

2. Last year BP recorded losses of $6.5 billion and took the decision to axe 7,000 jobs. Despite, this the company intended to award Bob Dudley a £14 million pay package, including the maximum possible bonus pay-out, on the basis of its operational performance. However, 60 per cent of shareholders voting at the company AGM voted against the remuneration report, prompting questions over the future of the Remuneration Committee Chair, Professor Dame Ann Dowling

Question: Did you support or oppose the BP remuneration report, and do you think Dame Ann Dowling’s position as remuneration Committee Chair is still tenable? What approach do you apply more generally to eight-figure pay packages, and generous pay awards to CEOs of companies that are cutting jobs across their wider workforce? 

March's topical questions for your manager

1. The Share Action campaign group have highlightde concernd that the overuse of anti-biotics in livestock production could lead to the development of drug resistant bacteria, creating a serious risk to public health. Share Action and other investors have written to the Yum! Brands corporation, owners of KFC and Pizza Hut, asking them to produce concrete plans for the removal of all medically important anti-biotics from their supply chain. You can find out more about the Share Action initiative by contacting Juliet Phillips via [email protected].

Have you supported the Share Action campaign on anti-biotics and are you monitoring the use of anti-biotics in the supply chain of investee companies more generally? 

2. A study in the US has criticised major asset managers Vanguard, Fidelity and JP Morgan for their failure to support proxy access - proposals for shareholder-nominated Directors to take seats on the boards of investee companies - at company AGMs. Critics of proxy access argue that it hinders company autonomy and agility, while advocates say it is a key driver of shareholder value and corporate accountability. 

What is your position on proxy access and under what circumstances do you consider such proposals necessary/merited? 

February's topical questions for your manager

1. Leading investor James Anderson has called on Google to pay more tax in the UK, saying it is in the company’s long-term interest. 

Do you have a position on whether or not it is in the interests of google and other such companies to aggressively minimise their UK tax bill, and have you engaged with companies on this issue? 

2. James Murdoch’s re-appointment as Chairman of Sky has been questioned by some investors, with the media highlighting criticism of his conduct in his previous stint as Chair and the conflict of interest owing to his role at major shareholder Fox.

Do you support James Murdoch’s appointment and what criteria do you use for assessing the integrity and objectivity of board members at investee companies? 

January's topical questions for your manager

1. Research from the High Pay Centre found that by the second working day of the year, a FTSE 100 CEO will have already made more money in 2016 than the average UK worker will earn all year. 

Do you compare the ratio between total pay awarded to executives and the pay of the average worker at investee companies? Do you think this ratio is important, and if so, what would you consider appropriate for particular sectors? 

2. UK companies often operate ‘joint ventures’ with partners overseas. Sometimes the governance structures of these joint ventures limits partners’ oversight of their day to day operation, making it harder to ensure appropriate standards of good governance and respect for human rights, health and safety or environmental footprint. 

What major joint ventures are operated by investee companies, and what oversight do they have of the governance of these companies?

December's topical questions for your manager 

1. The COP 21 summit in Paris set out ambitious targets for the reduction of greenhouse gas emissions that many say are incompatible with the business models of major companies across a number of sectors. How would a reduction in the extraction and consumption of fossil fuels commensurate with a target of global temperature rises no greater than 1.5 degrees Celsius impact on the anticipated returns from your current investment portfolio? 

September's topical questions for your manager

1. Changes made to the Listing Rules which came into force last year mean that non-executive directors of companies with a controlling shareholder need to receive a majority of support from both the totality of shareholders and the minority shareholders.
This time last year many investors publicly questioned the governance arrangements at Sports Direct, and ahead of next week’s AGM it is clear that for many these concerns remain with some analysts cautioning earlier this year that governance at the business is “an issue” and was deterring institutional investors from buying the stock. Given the enhanced accountability of directors in controlled companies to minority shareholders and ongoing concerns what engagement have you had with the company and in turn how have you cast your votes in respect of the re-election of the non-executive directors at Sports Direct? 

2. Earlier this summer the target for 25% female representation on FTSE 100 boards was met. When the Davies review was launched in 2011 there were 152 all-male boards across the FTSE 350, there is now not a single all-male board in the FTSE 100 and less than 20 in the FTSE 250.
The focus of many is now shifting to the pipeline of talent and translating the progress made on diversity amongst non-executives to the executive management team and wider workforce; in line with this the Pensions and Lifetime Savings Association has encouraged government to press ahead with proposals to require companies to publish their gender pay gaps. How do you assess whether companies are making full use of the talent available to them and what use, if any, would you make of consistent disclosure of gender pay gaps? 

August's topical questions for your manager

1. The UK’s Modern Slavery Act, one of first laws in the world to specifically address slavery and trafficking in the 21st century, came into force at the end of July. This new law will require companies each year to prepare a statement setting out the steps they have taken to ensure that slavery and human trafficking is not taking place in any of its supply chains and in any part of its own business. How do you envisage making use of these new disclosures within both your investment decisions and engagement activities? 

2. This week the SEC in the USA adopted a rule requiring public companies to disclose the ratio of the pay of its CEO to the median pay of its employees. In contrast in the UK, government noted earlier this year that a significant minority of companies provide insufficient detail for shareholders to judge how consideration of wider workforce pay informs executive pay. With an increasing focus on workforce productivity in both jurisdictions how do you assess the appropriateness of remuneration below the executive management team, especially for those companies that cite human capital as a key factor in their success? 

July's topical questions for your manager

1. Productivity was a central focus of this week’s Budget and the headline measure, the National Living Wage, is directed at this challenge. There is compelling evidence to demonstrate that a well engaged, stable and trained workforce is likely to be more committed and productive and, in turn, be more likely to drive long-term success; decent pay and conditions is a contributing factor to this. Paying a living wage of course has direct costs as well as benefits and certain sectors such as retail will be most impacted by the increase in salaries. What engagement have you had with companies on the topic of the living wage and how do you believe companies across and within different sectors should respond? 

2. The end of last month saw the annual rush of Japanese AGMs – 40% are held on the same day. In contrast to previous years however, this season was the first since the introduction of a corporate governance Code (a Stewardship Code was introduced last year) in an effort to improve the financial performance and capital efficiency of Japanese companies in part by bringing more genuine independence to board rooms. Given that the reforms have attracted the attention of many overseas investors, how did you engage with your Japanese holdings this year and how have you assessed any impact on boardroom culture and the attractiveness of Japanese stocks? 

June's topical questions for your manager

1. At WPP’s AGM this week Standard Life Investments attended to voice concerns about the company’s “Sorrell-centricity” and urge more transparency to be given on the board’s approach to dealing with the “succession elephant”. With the FRC due to publish a discussion document on the subject later this month what reassurances have you sought on succession at WPP and how do you incorporate uncertainty on such issues into company valuations? 

2. While BP this week reported that global energy consumption had slowed to its slowest rate of growth since the late 1990s Mercer also published its 2nd report looking at the danger of climate risk for investors. Their analysis concluded that climate change will give rise to investment winners and losers and the biggest risk will be at industry level where asset-class return impacts will be material but vary widely by scenario. How have you assessed the risks and opportunities posed by climate change across different sectors and within different geographies?

May's topical questions for your manager

1. This week Jamie Dimon, Chief Executive of JPMorgan Chase criticised “lazy” and “irresponsible” shareholders who followed proxy advisory services recommendations. The remarks arose after 38.1% of shareholders voted against executive pay at JPMorgan’s AGM with concerns expressed about the awarding of a $7.4m cash bonus for 2014. What proportion of your voting decisions automatically follow the recommendations of your proxy advisory service provider and how do you respond to Mr Dimon’s critique? 

2. Severe drought in central Vietnam is halting cultivation and the drought in California, now entering its fourth year, has pushed cotton acreage to 1930’s levels. These incidents are highlighting the importance of usable water as one of the most critical aspects of corporate survival - the World Economic Forum lists a water-supply crisis as one of their top global risks within this decade. Whilst water use may be relatively straight forward in the food production sector, it is also a significant issue for others throughout their supply chain; how are you integrating water management into your company valuations and analysing the risks and opportunities to your investee companies? 

April's topical questions for your manager

1. A shareholder resolution drafted by the Local Authority Pension Fund Forum will be the subject of a vote at the National Express AGM next week. The resolution is the latest in a long-running dispute between the company and the Teamsters Union and calls on the company to commission an independent review of its US subsidiary to investigate to alleged anti-union activity. What engagement have you had with the company and the Teamsters Union and how did you balance their conflicting arguments when determining whether to support the resolution? 

2. Late last year BG Group caused headlines with the very generous recruitment package awarded to incoming Chief Executive Helge Lund. The company acknowledged in April that directors had not given enough weight to concerns about the levels of executive pay in the UK and that in designing the original package it did not strike the correct balance. BG is now the subject of a takeover by Shell and thus what seemed a generous arrangement a few months ago looks even more generous today. What clarity have you sought as to how discretion over Mr Lund’s share awards will be exercised at the change of control and how has the handling of the recruitment last year informed your decision on the re-election of individual directors BG’s AGM? 

March's topical questions for your manager

1. Investors are often criticised for fixating on executive pay at the expense of longer-term issues. Interestingly, from next year directors will be required to make a statement about the longer term viability of their company over an appropriate period – in doing so, Barclays this week reported that they intend to look out three years. Over what time period do you believe the Barclays directors should be able to look out and have a reasonable expectation that the company will remain a viable enterprise? 

2. As we move rapidly into company reporting season, this week saw the publication of full year results by amongst others Aviva, Glencore, ITV and Standard Chartered, companies’ annual reports will begin to land in the in-trays of many investors and the AGM season looms on the horizon. What internal and external resources do you have in place to analyse company report and accounts and make informed voting decisions? 

February's topical questions for your manager

1. This week Old Mutual signalled its intention to begin to vote against pay policies of companies that fail to shorten the service contracts for their directors to less than 12 months. These annual rolling contracts are essentially universal and according to Old Mutual are an “anachronism” which results in companies being compelled to make payments for failure. What is your view on this proposal and what discussions are you having with companies about ensuring that executives are exposed to tail risk for an appropriate length of time once they leave a company? 

2. The FCA this week formally endorsed ESMA’s advice to the European Commission to separate portfolio managers’ payments for research from execution arrangements in order to better align their incentives to control costs and procure research in the best interests of their customers. These reforms, to be implemented via the MiFID II Directive, will also require more disclosures around the total costs that a fund manager has incurred for third party research. Are you able to demonstrate now how the investment research you have purchased via commissions is enhancing and protecting value for the fund? 

January's topical questions for your manager

1. Last week Government published results of their 2014 Cyber Governance Health Check of FTSE 350 boards alongside a new report detailing the common cyber-attacks used against industry. Additionally, five more FTSE 100 companies announced their intention to adopt the Cyber Essentials Scheme. What assurances have you sought from investee companies that have not obtained the Cyber Essentials Badge that they are taking adequate steps to protect themselves against cyber-attacks?

2. Over the past six months the price of oil has plunged from $110 to below $50 and there is little sign of a reversal yet. This fall in price has hit many energy companies and is causing reassessments to be made of the long-term profitability of many projects. With the Energy Sector accounting for an eight of the overall FTSE All-Share Index how have you assessed the opportunities and threats from the fall in oil price? Additionally, what engagement have you had with energy stocks with respect to understanding their long-term sustainability?

November's topical questions for your manager 

1. BG Group recently announced the appointment of Helge Lund as Chief Executive. As part of this recruitment the company intends to grant Mr Lund an additional allocation of shares with a face value of £12 million in contravention of the remuneration policy approved by shareholders earlier this year. The share award is to be put to shareholders for approval at a meeting next month and the company has suggested there is a risk that if the resolution is not passed Mr Lund will not join BG Group. What engagement have you had with the company and how do you anticipate approaching this issue? 

2. There continues to be increasing political and regulatory attention being paid to transaction costs; indeed this week the Financial Services Consumer Panel urged the FCA to overhaul how fund managers charge investors in order to prevent overcharging and short-termism. By many estimates transaction costs reach at least the same level as fund management fees. In this context can you explain how your turnover level is appropriate with our investment time-horizon and demonstrate that the incurred costs are in our best interest? 

October's topical questions for your manager

1. The new Investor Forum is set to be formally launched on Monday 27 October with the objective of seeking to escalate engagement where there is a clear risk of long-term value destruction by initiating Engagement Groups to press for better dialogue or change where necessary. What is your approach to collaborative engagement and how do you anticipate utilising the new Forum? ? 

2. Recent research demonstrates a positive association between employee satisfaction and stock returns and previous research has suggested that companies which focus on the safety of their workforce may yield greater value for their investors. On this theme, the new Vedanta CEO recently said he is placing greater emphasis on safety having suffered 19 fatalities in the last financial year whilst John Menzies is in danger of losing its prestigious LAX Airport contract as US regulators fined and criticised the company for a “flawed safety policy” relating to the death of an employee earlier this year. How do you integrate a company’s record on employee safety and morale within your investment analysis and what engagement have you had with these two companies to press for change? 

September's topical questions for your manager

1. In an effort to improve the accountability of directors the UK’s Corporate Governance Code has since 2010 stipulated that all directors of FTSE 350 companies should be subject to annual re-election by shareholders. It is very rare however, for investors to utilise these rights even in circumstances, such as those at Sports Direct this month, where engagement has proved unsatisfactory and fundamental governance concerns remain. In that context, how did you vote with respect to the re-election of the Chairman and other Directors at Sports Direct and under what circumstances would you be willing to escalate your voting sanctions to the individuals charged with governance on the board? 

2. During August BHP Billiton announced plans to demerge a selection of their assets into a new company to be listed primarily in Australia with a secondary listing in South Africa. While the company continues to consider the merits of a Standard listing in the UK, it is likely that many UK shareholders will be unable to continue to hold shares in the new spin-off. In these circumstances what flexibility do you have to avoid being a forced seller and thus realising suboptimal value on an investment? 

August's topical questions for your manager

1. We are nearing the end of the first AGM season in which shareholders have had at their disposal the enhanced voting rights introduced by the Government last year. Has the enhanced reporting brought to light more issues of concern; if so how have you sought to utilise your voting rights in a coherent fashion? Can you demonstrate how your voting activity is aligned with the aim of promoting the long-term success of investee companies? 

2. In February this year the Japanese government published its first ever Stewardship Code and a new Corporate Governance Code will also be published in time for the 2015 AGM season. Has your firm become a signatory to the Japanese Stewardship Code, if not why not? More broadly, how do you seek to exercise in a considered manner your stewardship responsibilities in overseas and emerging markets? Can you demonstrate that risks are being effectively monitored and mitigated? 

July's topical questions for your manager

1. Kay argued that all participants in the investment chain should observe fiduciary standards in their relationships with their clients and contractual terms should not claim to override these standards. The Law Commission’s final report was clear that there is a disparity between these aspirations and the approach taken by the courts, with the contract essentially king. Do you believe you have a fiduciary relationship with your clients? If so, in light of the FCA’s findings with respect to use of dealing commissions, can you evidence that client’s interests are put first? 

2. Last week, at the fourth attempt and in the face of widespread opposition Sports Direct achieved assent from a majority of shareholders to award £180m of shares to 3,000 permanent staff including 58% owner Executive Deputy Chairman Mike Ashley. How did you vote? If you supported management, what persuaded you that this proposal was more appropriate and in the interests of shareholders than those proposed and withdrawn previously? If you did not support the resolution, what further engagement will you undertake with respect to the overall quality and independence of the governance arrangements at Sports Direct? 

June's topical questions for your manager

1. With the government committed to legislating against modern slavery and companies increasingly being encouraged to consider and report on supply chain risks, one study this week linked the investments of UK institutional investors, including pension funds, to firms either known or alleged to be involved in cases of so called land grabbing, and another news story identified slavery as an integral part of the supply chain of prawns provided to many global supermarkets. As companies become ever more global, what assessment have you made of the potential risks which may be embedded in vast corporate supply chains and which have significant financial and/or reputational consequences? How have you encouraged investee companies to report more fully on these supply chain risks and to manage them over time? 

2. Trinity Mirror’s annual report identified the financial and reputational impact associated with historical legal issues related to phone hacking as one of the Group’s four principal risks. With news this week that twenty individuals have initiated legal actions against the Group what engagement have you had to date to assess the appropriateness of management action to mitigate the risk, including the level of provisioning made? More broadly, what is your assessment of the implications of the debate around ethical standards in news-gathering on the investability of our listed media companies? 

May's topical questions for your manager

1. This week Centrica informed shareholders it had begun planning to replace chief executive Sam Laidlaw and BG group have recently begun searching for a new Chief Executive after Chief Executive Chris Finlayson abruptly resigned a little more than a year into the post. With many other large companies wrestling with the challenge of succession planning, not least where there is a long-serving CEO, what steps are you taking to ensure that investee companies are adequately managing succession issues in both short and long-term scenarios? 

2. As M&A activity continues to boom this year, the protagonists in the current most high profile potential deal, the Chief Executives of both Pfizer and Astra Zeneca, faced the scrutiny of a Parliamentary Select Committees this week. What engagement have you had with the two companies and how are assessing the merits of any further formal bid? 

April's topical questions for your manager

1. At Barclays AGM next week (24th April) many investors are expected to express their frustrations with the bank's decision to increase its 2013 bonus pool by 10% (13% increase in the investment bank) despite falling pre-tax profits and a bonus pool equating to more than 2.5 times the size of the dividend payout to shareholders. Barclays have since appointed a new chair of its remuneration committee for 2014 and a substantial review of its investment bank operations will report in the summer. Given recent announcements and assurances, have you voted against Barclays remuneration report or are you giving the board the benefit of the doubt that effective changes are being made? 

2. This week saw the European Parliament overwhelmingly approve proposals to require around 6,000 companies to report on their environmental and social performance. On the same day the Australian stock exchange amended its listing rules to require companies to disclose their environmental, social and economic risks or explain why they haven’t done so. Both of these changes should hugely increase the amount of information available to investors and the general public on how sustainable a company’s operations. How do you intend to make use of this new information to better inform your investment decisions on our behalf?

March's topical questions for your manager

1. Corporates reporting in 2014 have new requirements for enhanced auditor reports which aim to open up the black box of audit to discuss the assessment of risks and materiality and how these are addressed by the auditor. A number of these new more revealing reports have now been published - how are your fund managers making use of this additional information?

2. In 2012 the FSA identified that many investment managers were failing to adequately control their use of dealing commission and as such the FCA is revisiting the current rules. Can you demonstrate that your use of client money to pay for investment research is providing value-added and not just a substitute for costs that should be borne by the fund manager itself? 

February's topical questions for your manager

1. Reports suggest that British companies are lagging behind their peers in addressing cyber security risks and the SEC has noted a recent spate of cyber-attacks on asset managers. What policies do you have in place to prevent, detect and respond to cyber-attacks internally and ensure boards of investee companies are addressing the issue? 

2. The large UK headquartered banks have approached shareholders with their pay proposals for 2014, including how they plan to respond to the EU’s ‘bonus cap’. What interaction have you had with the banks and how are you ensuring that increases in fixed pay do not come at the expense of increasing alignment with the interests of long-term shareholders? 

January's topical questions for your manager

In its response this week to the Law Commission’s review of fiduciary duties, the NAPF suggested investment managers should be more transparent concerning how funds are being invested and how ESG considerations come into play. 

1. In the context of the Law Commission review and with much discussion ongoing about cost and charges in pension provision, can you explain how your approach to stewardship is enhancing and protecting value for your clients? 

2. In light of the announcement this month from Experian about the succession of its CEO to Chairman, how do you assess the independence and effectiveness of company directors?

December’s topical questions for your manager 

1. Ahead of the formation of a new Investor Forum, can you cite examples when you worked together with other investors in your engagement activities with investee companies with the intention to improve sustainable, long-term company performance? 

2. With the proxy advisory industry currently consulting on a code of Best Practice Principles, can you demonstrate that you do not blindly follow the recommendations of proxy voting or research providers? 

November’s topical questions for your manager 

1. A number of the UK’s banks are currently in the process of consulting on their remuneration plans for 2014, how are you ensuring that the banks are adhering to both the spirit and letter of the new requirement for a 2:1 bonus-cap under CRDIV by reducing their total pay opportunity and seeking to align any new structures with the interests of their shareholders? 

2. Recent reports suggest that major oil and gas companies are allocating capital to long-term exploration and extraction projects although much of the current reserves may never be able to be burned. Given that many indices and portfolios have relatively high exposures to carbon intensive stocks, what are you doing to manage and reduce my exposure to carbon risks? 

October’s topical questions for your manager 

1. More companies are putting their audit out to tender, in response to the new FRC guidelines. Have you encouraged this development and if not why not? 

2. When did you last update your stewardship disclosures on the FRC website? Have you looked at competitor submissions in order to assess whether you are up with the best? 

September’s topical questions for your manager 

1. The NAPF has looked back at the 2013 AGM season highlighting a number of positives and negatives from this past year. What engagement did you have with those companies highlighted by the NAPF as having received a second successive year of shareholder dissent on remuneration issues? 

2. The NAPF has highlighted four significant rebellions against audit-related resolutions this year where shareholders signalled their dissatisfaction with consistently high levels of non-audit fees; how did you vote on these resolutions and what steps are you taking to ensure the independence of the auditor in such examples? 

August’s topical questions for your manager 

1. A Parliamentary Committee recommended that a greater percentage of dealing commissions be spent on long-term investment research that is orientated towards good stewardship – can you confirm how the research you are receiving via commissions are adding long-term value to my portfolio? 

2. A new study indicates that a greater number of investors are either avoiding or divesting from investments over climate concerns – do you view climate change as a material risk factor and do you integrate it into your investment processes?

July’s topical questions for your manager 

The 2013 AGM season is now almost over 

1. What were the most important votes cast in the UK on behalf of your clients and what were the outcomes? 

2. Did you actively engage with any non-UK investments over their AGM resolutions? 

June’s topical questions for your manager 

1. It has not been a good spring for London’s listed miners with serious governance failings coming to a head at both ENRC and Bumi; what engagement had you had with these companies and had you raised concerns with the listing authority about their listing rules? 

2. The 2013 AGM season has seen turnout continue to rise year on year, however, there has also been a decrease in the percentage of votes cast against management. Is this a sign of more successful engagement? If so can you demonstrate where your engagement has moved you from a vote against last year to a vote for this year? 

May’s topical questions for your manager 

1. When voting at 2013 AGMs what criteria do you use to assess the alignment between executive rewards and business performance? 

2. Have you got the resources to handle the extra engagement work which will be needed when the Government’s remuneration reforms come into force in the autumn? 

April’s topical questions for your manager 

1. During this year’s AGM season, in those cases where you continue to be dissatisfied with the policies at a particular company are you utilising the full powers at your disposal and voting against the re-election of directors? 

2. In those cases, especially in relation to remuneration, where on-going private engagement has not proved effective, will you be attending the AGM and making public your concerns as Guy Jubb from Standard Life recently did at BP? 

March’s topical questions for your manager 

1. Companies have been more actively engaging with their shareholders since the last AGM season. What effect has this effort had on your investment decision-making? 

2. Given the EU plans to cap bonuses at asset management firms, please explain how fund manager pay is aligned with the interests of their clients. 

February’s topical questions for your manager 

1. The EU look like introducing a cap on bankers’ bonuses and other variable pay. What impact do you see this having on the attractiveness of bank shares as investments? 

2. Given the significant issues raised by the recent Bumi plc board dispute, have you increased your surveillance of companies with unusual ownership structures, such as some of the other foreign mining companies listed in London? 

January’s questions to your investment managers 

1. A number of banks are currently in the process of consulting with institutional shareholders about reforms to their executive remuneration structures. What engagement have you had with these banks and are you looking for restraint in pay and improved simplicity and transparency? 

2. In the aftermath of the economic crisis, many schemes were adversely affected, and incidents of class actions have thus increased markedly. How are you attempting to recover any available proportion of those losses?