Investors' call for clarity pushes ownership and transparency up the agenda

Active ownership and shareholder voting transparency are set to race further up the agenda after almost half of investors said they want investment managers to be more open.

It follows veteran investor Neil Woodford (pictured) telling MPs fund managers and institutional shareholders do not take enough interest in the strategic direction of the businesses they own.

A number of asset managers already disclose information on their stewardship activities as signatories of the UK Stewardship Code, which encourages greater transparency from the industry.

But the amount of information released varies from firm to firm, and investors are urging for greater clarity.

Some 47% of those asked said they wanted greater transparency on shareholder voting, in a poll conducted by YouGov, and a significant number of investors said they also want fund managers to take an active approach to ownership.

This would ensure executive renomination is not excessive, that companies pay a fair share of UK tax and supply chains are not flaunting human rights.

According to George Latham, managing partner for WHEB Asset Management, putting active ownership high on the agenda gives firms a ‘competitive edge’ in an age where investment managers are seeing margins come under pressure and issues like tax and ethical behaviour are emerging as key reputational risks.

Latham said: ‘We’re having conversations which are absolutely relevant to identifying and evaluating the long term performance of a business, but they’re conversations that not every investor is having.’

‘We find investor relations teams or chief executives very rehearsed and coached on talking around the subjects that most investors are asking about.

‘When we get on to topics that might not otherwise come up in the topics of ownership or engagement, quite often we get less rehearsed answers and therefore more natural insight into how the management team is reacting,’ Latham added.