United States, Institutional
Change
Wellington Management is a founding signatory of the Investor Stewardship Group (ISG), a collective of some of the largest institutional investors and global asset managers that seeks to promote best practices in asset stewardship and corporate governance in the US market. This investor-led initiative promotes six corporate governance principles for US listed companies and six stewardship principles for institutional investors. Together these principles (listed below) form a framework for long-term value creation on behalf of US companies and the broader US economy.
For more on the Investor Stewardship Group visit www.isgframework.org.
CORPORATE GOVERNANCE PRINCIPLES FOR US LISTED COMPANIES:
Principle 1: Boards are accountable to shareholders.
Principle 2: Shareholders should be entitled to voting rights in proportion to their economic interest.
Principle 3: Boards should be responsive to shareholders and be proactive in order to understand their perspectives.
Principle 4: Boards should have a strong, independent leadership structure.
Principle 5: Boards should adopt structures and practices that enhance their effectiveness.
Principle 6: Boards should develop management incentive structures that are aligned with the long-term strategy of the company.
STEWARDSHIP PRINCIPLES FOR INSTITUTIONAL INVESTORS:
Principle A: Institutional investors are accountable to those whose money they invest.
Principle B: Institutional investors should demonstrate how they evaluate corporate governance factors with respect to the companies in which they invest.
Principle C: Institutional investors should disclose, in general terms, how they manage potential conflicts of interest that may arise in their proxy voting and engagement activities.
Principle D: Institutional investors are responsible for proxy voting decisions and should monitor the relevant activities and policies of third parties that advise them on those decisions.
Principle E: Institutional investors should address and attempt to resolve differences with companies in a constructive and pragmatic manner.
Principle F: Institutional investors should work together, where appropriate, to encourage the adoption and implementation of the Corporate Governance and Stewardship principles.
