2017 Consultation

The ‘Best Practice Principles for Shareholder Voting Research and Analysis’ (“the Principles”) were introduced in 2014. They were developed by the industry to provide a voluntary performance and reporting framework, to promote a greater understanding of its role, and to promote the integrity and efficiency of processes and controls related to the provision of these services and management of any conflicts of interest.

The purpose of the current review, as set out in the terms of reference, is to consider whether the Principles and supporting arrangements need to be revised in light of the experience of implementing them, as well as market and regulatory developments since the Principles were introduced.

The review is being overseen by a Steering Group consisting of the signatories to the Principles and an independent chair. The Steering Group is being supported by an Advisory Panel whose members have broad experience and knowledge of investors, companies and different national markets. 

There are a number of strands to the review which will help to inform the Group’s decisions, and which will be summarised in the final report. These include reviewing the Principles and reporting arrangements for consistency with regulatory requirements such as the revised EU Shareholder Rights Directive, and looking at the operation of other voluntary codes and principles to identify lessons that might enhance the effective operation and oversight of the Principles.

The purpose of this consultation is to gather evidence from market participants on the implementation of the Principles to date and to hear their views on how the Principles should be developed. We are particularly keen to hear from investors, companies and other providers of voting research and related services on their direct experience, but welcome comments from all those with an interest.

How can you contribute

There are two ways in which you can let us have your views:

A copy of the questionnaire is also available in a .pdf format and can be downloaded HERE

Closing date for comments

The closing date for comments is 15 December 2017.

Publication of responses

All responses will be published on the website at the end of consultation period, unless respondents specifically request that they be treated as confidential.

Teleconference

If representative bodies would like to arrange a meeting or conference call between their members and the Review Steering Group, to enable their members to input their views directly, please contact us at committee@bppgrp.info and we will do our best to accommodate your request. 

Next steps

A decision has not yet been taken on whether there will be a second consultation on draft revised Principles and reporting arrangements. This is likely to depend on the extent of any revisions proposed, and will be informed by the responses to this consultation.  

If it is decided that a second consultation is not necessary, then the aim would be to publish a report setting out the findings and conclusions of the review, together with the revised Principles and details of the reporting and monitoring arrangements in April 2018.

If there is a second consultation, it will begin in April and the revised Principles and other documents will be published in July or August 2018.

Press Release: Shareholder Voting Analysts Consult on Global Principles

2017 BPP REVIEW: LAUNCH OF CONSULTATION

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A consultation was launched today seeking views from investors and companies on whether the Best Practice Principles for Shareholder Voting Research and Analysis have been effective in ensuring the integrity and efficiency of the services provided by shareholder voting analysts and advisors.

The Principles, first introduced in 2014, were developed by the industry as a voluntary standard. The aim was to promote a greater understanding of the role of shareholder voting research providers and provide more transparency about their activities.

The consultation is part of a wider review looking at the impact and implementation of the Principles, and considering whether changes are needed to the Principles themselves or to how they are reporting on and monitored.

The review will also consider what actions are needed to ensure the Principles are fully compatible with the mandatory requirements for proxy advisors operating in the European Union that are contained in the revised EU Shareholder Rights Directive, which takes effect in 2019.

 Launching the consultation, Chris Hodge, independent chair of the Steering Group carrying out the review, commented:

“The role of proxy advisors is a subject than can often generate more heat than light. This review is an opportunity to shed more light on their activities, and to identify ways in which the standards in the Principles might be strengthened and reporting against them made more informative. We are particularly keen to get first hand evidence from investors who use the services of voting research providers and from companies who have had direct dealings with them”.

The consultation is open until 15 December 2017. Details of how to submit comments can be found at: [add link]

Note to Editors:

The Best Practice Principles for Shareholder Voting Research were launched in March 2014. The Principles are global in their scope and can be used by any organisation providing research services to inform institutional investors’ stewardship and voting decisions. The Principles can be found at: https://bppgrp.info/the-principles/

The review is being carried out by a Steering Group chaired by Chris Hodge, formerly Director of Corporate Governance at the Financial Reporting Council in the UK, and representatives of the five current signatories: Glass, Lewis & Co; Institutional Shareholder Services Inc. (ISS); Manifest Information Services Ltd; PIRC Ltd and Proxinvest. The Steering Group is supported by an Advisory Panel whose members have broad experience and knowledge of investors, companies and different national markets.

The terms of reference for the review can be found at: https://bppgrp.info/2017-review-terms-reference/

Media Contact:

BPP Group Review Committee Independent Chair, Chris Hodge

Tel: +44 (0)7738 784064 | Email: chairman@bppgrp.info | Web: https://bppgrp.info

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BPP Group announces Principles Review, Independent Chairman

Best Practice Principles Group for Shareholder Voting Research

Consultation to Review Principles by 31st December 2017

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Released: 21 April, 2017

The charter signatories to the Best Practice Principles for Shareholder Voting Research & Analysis (the “BPP Group”) announced today that the Principles will be reviewed by the end of 2017 following a public consultation overseen by Chris Hodge, the new Independent Chairman of the BPP Group’s Review Committee. This update will include addressing the transparency requirements for proxy advisors outlined in the amendments to the revised EU Shareholder Rights Directive 2007/36/EC, adopted on 3 April 2017.

The aims of the review are to ensure that the Principles are achieving their original objectives set and to identify where there is scope to improve practice and transparency. It is also intended that the updated Principles should be capable of being applied in all markets for which voting research and analysis is provided, and by all providers of such services. The terms of reference for the review are further detailed here.

Independent Chairman, Stakeholder Advisory Panel

A public consultation on the Best Practice Principles for Providers of Shareholder Voting, Research and Analysis will be held in the summer of 2017. An advisory stakeholder panel, comprised of members from companies, asset owners, asset managers, and other constituencies, will be established to provide input to the preparation of the consultation and any subsequent revisions to the Principles.

Mr. Hodge is an experienced policy-maker who has worked at the highest levels with business, investors, regulators, governments, and international organisations, and has written and presented extensively on the topics of governance and stewardship. For ten years until 2014, he was Director of Corporate Governance at the UK’s Financial Reporting Council, where he was responsible for developing and promoting the UK Corporate Governance Code, and for introducing the first national stewardship code for investors. Chris established, and chaired for eight years until 2015, the European Corporate Governance Codes Network which brings together the bodies responsible for codes in 28 European countries.

Commenting on the announcement Mr Hodge said: “The Best Practice Principles promote the integrity and efficiency of shareholder voting research services and I am delighted to have been invited to chair this review.” “The new transparency requirements for proxy advisors outlined in the amended EU Shareholder Rights Directive 2007/36/EC, make this the perfect time to review and update the Principles.”

Note to Editors:

The Best Practice Principles for Shareholder Voting Research were launched in March 2014 following two public consultations. The Principles were developed at the suggestion of the European Securities & Markets Authority (ESMA) which suggested that the industry would benefit from increased understanding of how it operates (for ESMA’s full press release, see here.) The Principles are global in their scope and can be used by any organisation providing research services to inform institutional investors’ stewardship and voting decisions.

Media Contact:

BPP Group Steering Committee’s Independent Chairman, Chris Hodge

Tel: +44 (0)7738 784064 | Email: chairman@bppgrp.info

Download statement as PDF

 

BPP Membership Guidelines Issued

The Committee of the Best Practice Principles Group has released its membership and governance guidelines following ratification at their July meeting. 

The Guidelines cover eight areas of governance including membership criteria, committee composition, voting rights, membership duties and responsibilities  and stakeholder involvement.

A copy of the Guidelines can be downloaded from the BPP Group website: [DOWNLOAD]

Frequently asked questions about the Group can be found on the FAQ page

Global Investors criticise proposed US proxy advisor regulations

Following the passage of a draft Bill in the US House of Representatives aimed at regulating proxy advisors (HR 5311) on 16 June 2016 , the Council of Institutional Investors and the International Corporate Governance Network, as representatives of global investors, have written to criticise the proposals.

Signatories to both letters assert that, the Bill, if passed, would have far-reaching and negative consequences for companies and investors, and would not, as the bill’s sponsors suggest, improve the competitive landscape.  Continue reading Global Investors criticise proposed US proxy advisor regulations

ESMA publishes finding after first full year of BPP operations

The European Securities and Markets Authority (ESMA) has published its Follow-up Report on the development of the ‘Best Practice Principles for Providers of Shareholder Voting Research and Analysis (Principles) which looks at the industry’s progress in establishing and following a self-regulatory code of conduct.

Overall, ESMA finds that the industry is “moving in the right direction” although its assessment is only preliminary given that ESMA reviewed the 2015 proxy season only, the first following the adoption of the Principles by signatories.
 
ESMA’s key findings are that the Principles generally meet ESMA’s expectations, as a result, there is more transparency meaning that stakeholders can better understand how the industry operates.

A copy of the ESMA report can be downloaded Here >>