Communicating on Stewardship | Brunswick Group

Communicating on Stewardship

Advice for Investors and Asset Managers

Brunswick ESG

Effective active ownership has a critical role to play in protecting and enhancing the long-term value of investments. Poor stewardship can lead to greater risks and potential loss of value for end investors.

Stewardship reporting presents an opportunity for asset managers and owners to differentiate themselves from peers and to build positive reputation and brand recognition. Communicating a good stewardship strategy also helps to foster a culture of responsibility and accountability.

On the flip side, there is growing public scrutiny of the voting records of investors and debate on the risk of “engagement-washing” by firms overstating the impact of their activities. Good stewardship is often simply measured as the number of “against votes” by an asset manager in each reporting period: the more against votes, the better the steward. This simplistic approach ignores the impact of a well-executed company engagement strategy. The more constructive engagement an investor or fund manager undertakes, the better informed it becomes regarding voting decisions. This can lead to a higher percentage of votes supporting management and can encourage long-term structural improvements, rather than short-term, quick results. Such an approach may also help to inform investment decisions.

Read the full report here