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  • September 28, 2018
    Amplified: We can all get along
    Eoin Murray
    In this podcast, Eoin Murray, Head of Investment, is joined by Mitch Reznick, Co-Head of Credit and Head of Credit Research and Hans-Christoph Hirt, Head of Hermes EOS and Stewardship Services to discuss the first instalment in a two-part paper we have recently published titled ‘we can all get along’.
  • September 12, 2018
    Shared interests unite bondholders and shareholders
    Mitch Reznick, CFA
    The perceived divergence of priorities between bondholders and shareholders has led some to believe that these investors cannot engage with companies on the same issues. Some – remarkably - even question the legitimacy of bondholders (or other creditors) engaging with companies in the first place. However, given their financial stakes in a company, both types of investors not only have legitimate cause to engage, but also a professional duty to do so. So say, Mitch Reznick, Co-Head of Credit, and Dr. Hans Christoph-Hirt, Head of Hermes EOS, in We Can All Get Along, a new report dispelling myths surrounding joint company engagements between bondholders and long-term shareholders. Writing in the paper, the authors argue that the difference in the payoff profile of equities and bonds is sometimes cited as a reason that bondholders focus less on long-term factors, while shareholders want to see growth. However, there are strategic issues which the pair highlight as being relevant to a company’s current and likely future health and value creation, including the management of ESG (environmental, social and governance) factors. Arguing that although the cash flows from bonds held to maturity will not alter unless operating cash flows are substantially impaired, the authors highlight that unmitigated risks can weaken a company’s ability to fulfil its debt-service obligations.
  • September 10, 2018
    We can all get along
    Hans-Christoph Hirt
    In this two-part paper, we assert that the shared interests of bond and shareholders in companies provide incentives to jointly engage companies – and generate positive outcomes by doing so. In this first instalment, we dispel the fallacy that the imperatives of bond and shareholders typically diverge, and argue that their common standing as financial stakeholders gives them the legitimacy to engage corporate boards and management teams to encourage sustainable growth and long-term value creation.
  • September 10, 2018
    Stewardship practices under the spotlight as SRDII deadline nears
    Hans-Christoph Hirt
    With nine months until the implementation of the European Commission’s Directive on shareholder rights (‘SRD II’), Hermes EOS, Hermes Investment Management’s stewardship and engagement team, raises concerns that asset owners are underprepared to meet their obligations. The enhanced Directive sets out to empower shareholders, enhance the efficiency of the chain of intermediaries and encourage long-term shareholder engagement, with the ultimate aim of contributing to the sustainability of publicly traded EU companies.
  • August 16, 2018
    First State Super appoints Hermes EOS for stewardship services
    Hans-Christoph Hirt
    Hermes Investment Management has today announced that its stewardship and engagement team, Hermes EOS, has been appointed by First State Super to provide engagement and public policy services for developed markets (excluding Australia). With AUD90bn (£51bn) under management, First State Super is one of the largest superannuation funds in Australia and is the fourth Australian client for Hermes EOS, which will advise on behalf of £9bn of assets. Dr. Hans-Christoph Hirt, Head of Hermes EOS, said: “With one of the largest and demonstrably effective stewardship resources in the world, Hermes EOS is looking forward to working with First State Super to engage with companies across developed markets. First State Super has a strong history of responsible investment and our highly skilled and experienced team will look to increase and protect the value of the companies it is invested in through impactful engagement.”
  • May 22, 2018
    Hermes EOS to call for more effective leadership and management stability at Deutsche Bank AGM
    Hans-Christoph Hirt
    Ahead of the Deutsche Bank AG AGM on Thursday 24 May, Dr. Hans-Christoph Hirt, Head of Hermes EOS at Hermes Investment Management, highlights the questions the Chair needs to answer and explains why the Chair is ultimately responsible for the company’s limited progress in the implementation of a value-creating strategy. He also raises concerns about the high turnover of management and supervisory board members and urges a review and improvement of the selection and nomination processes for management board members and non-executives. The Chair needs to answer serious questions regarding CEO turnover and other management board changes Given the catalogue of challenges Deutsche Bank currently faces, more effective leadership and continuity is needed in its management board. Unfortunately, there continues to be high churn: •The appointment of Christian Sewing as the new CEO in April, which was preceded by rumours and leaks, means that Deutsche Bank has now had four CEOs/co-CEOs during the six-year tenure of the Chair, Paul Achleitner. He hand-picked John Cryan, who was initially appointed as co-CEO in mid-2015 (when he was a member of the company’s supervisory board), after overseeing the previous co-CEOs for three years following his own election in 2012
  • April 19, 2018
    Calvert Research and Management engages Hermes EOS
    Hans-Christoph Hirt
    WASHINGTON and LONDON, 19 April 2018 - Calvert Research and Management (“Calvert”), a subsidiary of Eaton Vance Corp., and Hermes Investment Management (“Hermes”) today announced that Hermes EOS (Equity Ownership Services), the stewardship and engagement unit of Hermes, has entered into an agreement with Calvert to supplement Calvert’s in-house corporate engagement program. Hermes EOS is a global leader in providing corporate engagement services to asset owners and asset managers across equity and fixed income asset classes on environmental, social and governance (ESG) issues. Hermes EOS will provide engagement, consultation and reporting services to Calvert. Dr. Hans-Christoph Hirt, Head of Hermes EOS, said: “Hermes EOS has one of the largest global stewardship resources in the world and we are excited to be working with Calvert to effectively engage corporates worldwide. Driven by our team of highly experienced and skilled multi-national professionals, our engagement program seeks to increase and protect the value of companies Calvert invests in on behalf of its clients by addressing the full range of sustainability issues they are facing.”
  • April 9, 2018
    Deutsche Bank’s chair has questions to answer following the departure of the CEO
    Hans-Christoph Hirt
    Dr. Hans- Christoph Hirt, Head of Hermes EOS “We welcome the clarity provided by the announcement following weeks of rumours, leaks and briefings around the position and succession of CEO John Cryan, and feel that Christian Sewing is a credible, internal candidate.” “The chair, Paul Achleitner, now has questions to answer ahead of the AGM: •He hand-picked John Cryan in mid-2015, after overseeing the previous co-CEOs for three years. The appointment of Christian Sewing thus means the third CEO change during his six-year tenure. Why was it necessary to appoint a new CEO at this point (Cryan’s appointment was scheduled to end in 2020)? •He was closely involved in the development of Deutsche's current strategy. He has also overseen a number of strategic U-turns, not least regarding the bank’s retail business and asset management. What does the CEO change mean for the bank’s strategy, specifically the role of its Investment Bank, and its implementation? •Moreover, during his tenure as chair, there has been unusually high turnover on Deutsche's supervisory board. Does the bank’s nomination process work adequately?