UK Stewardship Code Disclosure Statement
Under COBS 2.2 of the FSA Handbook, we are required to make a public disclosure in relation to the nature of our commitment to the above Code, which was published by the Financial Reporting Council (‘FRC’) in July 2010.
The Code aims to enhance the quality of engagement between institutional investors and companies to help improve long-term returns to shareholders and the efficient exercise of governance responsibilities. It sets out good practice on engagement with investee companies and is to be applied by firms on a “comply or explain” basis. The FRC recognises that not all parts of the Code will be relevant to all institutional investors and that smaller institutions may judge some of the principles and guidance to be disproportionate. It is of course legitimate for some asset managers not to engage with companies, depending on their investment strategy, and in such cases firms are required to explain why it is not appropriate to comply with a particular principle.
The seven principles of the Code are that institutional investors should:
- Publicly disclose their policy on how they will discharge their stewardship responsibilities;
- Have and publicly disclose a robust policy on managing conflicts of interest in relation to stewardship;
- Monitor their investee companies;
- Establish clear guidelines on when and how they will escalate their activities as a method of protecting and enhancing shareholder value;
- Be willing to act collectively with other investors where appropriate;
- Have a clear policy on voting and disclosure of voting activity; and
- Report periodically on their stewardship and voting activities.
Our statement of compliance with the seven principles of the Code is set out below:
Policy on discharging stewardship responsibilities
- Long term investment horizon
- We are typically the largest institution shareholder (c.30%)
- We have a close relationship with the executive management :
- Non-Executive Directorship
- Financial advisor to company in the execution of strategies.
- Policy on voting: we are supportive of the company in the execution of its strategic objectives
Policy on managing conflicts of interest in relation to stewardship
It is our policy and duty to act in the best interest of all of our clients. Should a conflict of interest arise, the senior management of Marwyn Investment Management LLP would take appropriate steps to ensure fair treatment of all clients, including disclosure of the conflict to the affected clients, if appropriate.
Monitoring of investee companies
We monitor our investee companies to determine when dialogue with management may be necessary. Our monitoring process may include the following:
- Sitting on the board of directors in a non-executive directorship capacity
- Satisfying ourselves as to the governance arrangements of the companies, including the operation of the Board and any non-executive oversight.
- Retaining adequate records of company meetings and of votes cast on behalf of our clients
- Records of reasons for voting against a company’s management, or for abstaining
- Attending General Meetings.
Our investment monitoring process aims to identify problems at an early stage and concerns will be raised with company management, in writing where appropriate.
Guidelines on escalation
If we become concerned about any aspect of an investee company’s investment strategy, performance, governance or any other matter, we may wish to escalate this to the management of the company by holding additional meetings with management or meeting with chairman or other independent directors.
Acting collectively with other investors
We do not engage formally with other investors.
Policy on voting and disclosure of voting activity
Core to Marwyn’s investment proposition is a very close working relationship with the management teams of all investee companies; Marwyn is actively involved in defining the strategy of each company at the outset and in its evolution and implementation over time. To the extent that a corporate action is required to implement this strategy, Marwyn will cast its votes accordingly so as to ensure the company can achieve its stated goals and ambitions.
Reporting on stewardship and voting activities
We provide our clients with information on the above, including a summary of how we have voted in respect of relevant shares published annually on our website.
For further details on any of the above information, please contact Nicola Hackett via email at ir@marwyn.com.
Marwyn Investment Management LLP
December 2010