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  • March 15, 2018
    The employees’ voice in the boardroom
    Hans-Christoph Hirt
    Against the backdrop of rising populism and low levels of trust in UK businesses, the Financial Reporting Council (FRC) has been considering how to bring the voice of employees into the boardroom as part of its ongoing efforts to revise the country’s Corporate Governance Code. This follows on from the UK government’s work on the same topic as part of its corporate governance reform green paper in 2017. Unlike regulation in other European countries, UK law does not mandate board level employee representation. However, section 172 of the 2006 Companies Act requires directors to take into account the interests of employees and other stakeholders.
  • March 1, 2018
    Last chance for market-based stewardship?
    Hans-Christoph Hirt
    The UK Stewardship Code was truly pioneering when it was introduced in 2010. It was designed to enhance the quality of engagement between investors and companies, thus contributing to long-term corporate success and improving investment returns for the ultimate beneficiaries. The Financial Reporting Council (FRC), which developed it, can be proud that the code’s introduction has been the catalyst for the proliferation of stewardship codes globally. However, with the code’s planned revision, on which the FRC has just undertaken an initial consultation, we must recognise that it has not yet completely fulfilled its purpose and that a market for stewardship remains a hope rather than a reality.
  • December 18, 2017
    Looking into 2018 – Our key engagement themes
    Hans-Christoph Hirt
    Climate change The year 2017 will be remembered for the devastating effects of hurricanes and other extreme weather events. Climate change will therefore remain top of the investor agenda for the foreseeable future. There will be a push for more standardised disclosures, based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), and increasing collaboration between investors globally in an attempt to move companies in the right direction. We will continue to engage with companies on the risks and opportunities arising from climate change and encourage them to report against the TCFD recommendations.
  • July 7, 2017
    Hermes statement on WPP AGM
    Hans-Christoph Hirt
    Hans-Christoph Hirt, Head of Hermes EOS at Hermes Investment Management, comments on today’s WPP AGM. 1. Succession planning We welcome the chair’s recognition of investor concerns regarding the company’s preparedness for succession. Sir Martin Sorrell, WPP’s CEO and founder, has created a great deal of value since taking over as Chief Executive of the company in 1986. He is rightly regarded as one of the most successful entrepreneurs and business leaders in the world. In light of this, the preparation for his eventual succession has been the focus of our engagement over the last years. Succession risks appear to have moved up the company’s agenda under this chair’s leadership and management of this seems increasingly reflected in WPP’s work and communications to shareholders. However, while we appreciate the steps that the company has taken so far, we urge the chair to continue to focus on the management of succession risks.
  • December 15, 2016
    Looking into 2017 – Our key engagement themes in the new year
    Hans-Christoph Hirt
    Remuneration Following the strong votes against proposed pay packages at a number of companies in 2016, remuneration will again be in the spotlight in 2017. This is particularly the case in the UK where companies will face a new round of binding shareholder votes on pay policies as part of the three-year voting cycle on this. Following much thinking and consultation with key stakeholders, we launched new remuneration guidance in the second half of 2016, setting out expectations to help steer companies in the right direction ahead of the voting season. We also provided a response to the corporate governance inquiry by the UK Parliament’s Business, Energy and Industrial Strategy (BEIS) Committee.