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 Governance Guidelines (‘Guidelines’):
- highlight ACSI’s expectations of boards of listed companies
- articulate ACSI’s views on the issues that form the basis of company engagement, and
- outline the factors ACSI takes into consideration when determining voting recommendations.
The following principles underpin ACSI’s expectations of boards and approach to engagement:
Board oversight of all material risks for sustainable, long-term value creation: Effective board governance contributes to shareholder value and creates the foundations for sustainable long-term investment.
Transparency: A company is more likely to attract long-term capital if it discloses enough information to give investors confidence in its identification and management of key risks.
Social license to operate: Companies rely on a range of stakeholders to operate and succeed, and effectively engaging with stakeholders is key to maintaining a social license to operate.
Stewardship approach: When assessing a company’s performance, ACSI considers a broad range of factors including the materiality of the issue, the context in which the issue arises and the size of the company. ACSI also considers the time over which any shortcomings have occurred, any improvements in company behaviour and responsiveness to engagement. These factors are set out in ACSI’s voting research and recommendations, so subscribers can consider them when determining their own voting positions. ACSI:
- seeks to engage with a company’s board to understand the company’s position before providing voting advice
- provides a copy of ACSI voting advice to the company that is the subject of the research and recommendations, and
- notifies a company of issues ACSI considers to be contentious ahead of making recommendations.