We have engaged with Alibaba on corporate governance since 2015 and ESG strategy and reporting since 2017. With respect to the former, we first raised concerns about lack of shareholder communications in 2015 and insufficient board and committee independence in 2016, which the company acknowledged. Between the years 2018 to 2021, we engaged with the company and raised these concerns through the mediums of issuing a public statement, sending a letter to the board of directors, recommending votes ahead of AGMs and holding calls with the company.
On ESG strategy and reporting, we requested this was improved and shared best practice examples to facilitate this. We welcomed the publication of the company’s first ESG report in 2019, which focused on seven priorities. However, we provided feedback on this, proposing improvements including more information on ESG governance aligning to the UN SDGs, further disclosure on cyber security, carbon emissions, the inclusion of science-based targets and reporting based on the Taskforce on Climate-related Financial Disclosures (TCFD). We also requested inclusion of more strategic social aspects such as human capital management strategy and metrics to align with the company’s six core values.
In light of allegations of a ‘996’ culture (working 9am to 9pm, 6 days a week), we enquired how the company ensures employees are engaged and deliver high performance whilst maintaining their wellbeing and work/life balance. The company took us through a variety of examples of how the company seeks to engage with employees, monitor their ‘happiness score’, and provide training and dialogue with senior leadership.
At the 2021 AGM, we were pleased that the company did not propose to re-elect one of the non-independent non-executive directors, as we had also suggested, meeting the goal of 50% board independence. In addition, the company made the audit and compensation committees 100% independent, and appointed an independent chair to the nomination and corporate governance committee.
As part of establishing a credible plan to improve minority shareholder engagement, the company appointed a director responsible for engaging with shareholders on all aspects of ESG, leading to significantly improved shareholder engagement.
At the end of 2021, we were pleased to receive more information about the company’s ESG strategy, and confirmation that it would issue a 2022 ESG report and subsequently report annually.
There remain important areas of further engagement on areas such as improved board director engagement with minority shareholders, committing to accredited science-based targets and providing a clearer overview of the company’s human capital management strategy. Finally, we also continue to request more information from the company on digital rights, including the ethical use of artificial intelligence.