ACSI’s Governance Guidelines are a clear statement of our members’ expectations about the governance practices of the companies in which they invest. The purpose of our Guidelines is to provide insights about governance issues which are of material concern to our members. The Guidelines articulate the issues that we focus on in our engagement work with companies and the factors we take into consideration when determining our voting recommendations.
One principle underpins everything we do. We are focussed on financially material ESG risks and opportunities over the long-term, to protect and enhance the retirement savings that are entrusted to our members.
The Guidelines are underpinned by core principles:
Board oversight of all material risks:
Good governance requires boards to consider and manage all material risks facing their company, including ESG risks.
Sustainable, long-term value creation:
Effective board governance contributes to shareholder value and creates the conditions in which sustainable long-term investment can prosper.
Active ownership seeks to use ownership rights to influence the governance, policies, practices and management of the investee entity, in order to improve investment outcomes. Material ESG factors form part of our members’ analysis in deciding whether to invest in a company and when deciding how to exercise their ownership rights.
Companies should properly disclose their performance in relation to material ESG factors which could impact shareholder value. Companies are more likely to attract long-term capital if they disclose sufficient information to give investors confidence in the identification and management of key ESG risks.
Social licence to operate:
Companies rely on a range of stakeholders to operate and succeed, including:
- Consumers and suppliers.
Effectively engaging with stakeholders is key to maintaining this social licence to operate.