The Engagement Appeal: A New Era of Stakeholder Engagement
The Engagement Appeal (TEA) recently hosted a pivotal roundtable discussion, bringing together industry leaders such as Kirsty Britz from NatWest and Emma Reid from Essentra. During this discussion, the panellists shared valuable insights into an area of weakness within the UK financial industry, stakeholder communication and engagement.
This discussion served as a platform to delve into several key topics central to stakeholder engagement. Among these were the concept of pass-through voting, the role of fund managers, and the trend of democratising wealth. The conversation highlighted the importance of giving investors more flexibility in their investment choices, particularly the younger generation.
Another focal point of the discussion was investment platforms in facilitating stakeholder engagement. The conversation underscored the need to overcome the barriers posed by intermediation, which often hinder effective communication between companies and their stakeholders.
Alongside this was another key takeaway: the discussion was about the need for uniformity in reporting standards. The participants noted that many initiatives and standards companies must comply with often lead to confusion and inefficiency. To address this, the need for uniformity in reporting standards and indices was emphasised, marking a significant step towards making investment processes more streamlined and accessible for all investors.
TEA emerged from the discussion as a promising solution to enhance communication between companies and stakeholders. This initiative, sparked by a phone call from Anjali, a partner at Reya, aims to boost shareholder engagement in the UK, which needs improvement. Their strategy involves working closely with the UK Shareholders Association, focusing on communication and engagement.
To take action beyond words, TEA launched a white paper and social venture, a project that took 14 months and was led by Professor Oliver Hart. The white paper, titled “The Path to Inclusive Stakeholder Engagement – A Roadmap for Mutual Benefit“, was sponsored by Marvel Sedali and involved various industry experts, including Catherine Howard (CEO of ShareAction), Georgia Stewards (Chumelo), and Adelman (The Unsustainable Truth), with support from Kirsty Britz (NatWest) and Emma Reid (Essentra).
Despite the consensus on many topics, the discussion had disagreements. There were differing views on the role of fund managers in decision-making. Some argued that fund managers should have the final say due to their expertise, while others advocated for more democratisation and flexibility for retail investors. The role of investment platforms also sparked debate, with some arguing that they need to do more to facilitate stakeholder engagement, while others saw intermediation as a barrier. In addition, the discussion also tackled the complexities of ESG reporting and its impact on effective communication with stakeholders. The conversation further delved into the inconsistencies and biases present within ESG indices.
Concluding on a high note, the roundtable discussion underscored the importance of cross-sector learning and active engagement from companies. Key takeaways included the trend of democratising wealth and the potential of hybrid AGMs to boost accessibility.
TEA’s dedication to transforming stakeholder engagement was affirmed with the launch of a white paper and social venture. This initiative, backed by industry leaders, is set to usher in a new era of transparent, inclusive, and effective communication.
The insights from the meeting will fuel ongoing efforts to enhance communication and engagement between investors and companies, steering the financial industry towards a future where robust stakeholder engagement is the norm. The stakeholder engagement strategy and plan put forth by TEA will undoubtedly serve as a model for other organisations in the industry.
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