The ICSA has published some new guidance called Enhancing Stewardship Dialogue. The guidance was developed in consultation with companies and investors and is intended to facilitate good engagement practices.

The guidance, which is intended to be flexible and non-prescriptive, provides practical advice on generally improving dialogue and relations between companies and institutional investors in respect of meetings, discussions on strategy and feedback. The guidance also includes an example of an engagement strategy, a checklist for setting up and structuring meetings and a non-exhaustive framework for discussions on long-term strategy and performance.

The guidance contains the following four key messages:

  • Develop an engagement strategy:
    • An investor engagement strategy should be developed each year and subject to annual review.
    • The strategy should meet the expectations of each key institutional investor.
    • The engagement process should be regular and consistent, and if possible, involve the same individuals at the company and investment institution.
    • Companies and investors should consider collective discussion of issues of common interest to all investors.
    • Companies and investors should seek early engagement on potentially controversial matters to improve the success of the AGM.
    • A suggested framework for an engagement strategy is set out in the guidance.
  • Get the housekeeping right:
    • Investors should be given the opportunity to be present at company presentations.
    • At meetings, companies and investors should send the appropriate individuals who can speak knowledgeably and directly on the issues under discussion.
    • Accurate records should be kept of all engagement activities between companies and investors.
    • Companies should have appropriate governance arrangements in place to ensure that the engagement process satisfies the requirements of the UK Corporate Governance Code.
    • The guidance includes practical guidance on setting up and structuring the meetings.
  • Strengthen the conversation on strategy and long-term performance:
    • The engagement strategy should include a provision that the company and its investors meet once a year to discuss strategy and long-term performance.
    • The guidance suggests that the meeting is held 4-9 months after the AGM.
    • The material for discussion at such meeting should be agreed.
    • The guidance includes a content framework for the discussion of long-term strategy and performance.
  • Provide feedback:
    • Feedback should take place in both directions.
    • Feedback should relate to both the engagement process and content of the meetings.

The full guidance can be accessed here: ICSA Enhancing stewardship dialogue