Steve W. Klemash is Americas Leader; Jamie C. Smith is Associate Director; and Rani Doyle is Executive Director, all at the EY Center for Board Matters. This post is based on their EY memorandum.
For the past nine years, we have engaged governance specialists from a broad range of institutional investors to find out what they are focused on for the upcoming proxy season. This year they told us they want companies to more clearly explain how they are creating long-term value and competitive advantage.
They are particularly interested in how companies are addressing environmental, social and governance (ESG) matters to build resiliency amid continued disruption, accelerating climate risk and other trends shaping the global business landscape. They also want to better understand how boards are evolving their practices to strengthen board composition, enhance perspective and better navigate rapidly evolving risks. And they want to know how executive pay is enabling effective development and execution of strategy and driving long‑term value.
These are some of the key themes of our conversations with governance specialists from more than 60 institutional investors representing over US$35 trillion in assets under management, including asset managers (62% of all participants), public funds (18%), labor funds (15%), and faith‑based investors (3%), as well as investor consultants and associations (2%).