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18 October 2018
Pressure mounts on companies to increase their shareholder engagement and institutional investors to exercise responsible voting, says Equiniti
· Boudicca wins 41 new clients in 6 months
· Growth in AGM business reflects socio-political pressure to vote responsibly
· Boards face heightened scrutiny from governance reforms and proxy advisory agencies
· Rising M&A and activists make companies vulnerable to 'bumpitrage1'
Equiniti Group plc, the FTSE listed share services and fintech business, says social and political pressure is changing the way companies approach governance, which has led to unprecedented growth at new acquisition, Boudicca.
Boudicca, Equiniti's proxy solicitation business specialising in shareholder communications and corporate governance advisory, has won 41 new mandates since it was acquired in May. This activity reflects the growing pressure on both companies and institutional investors who are feeling the need to act responsibly, particularly when the latter are exercising voting rights.
With major household names, such as Tesco and FirstGroup, among the client wins, half of the new appointments related to AGM votes as companies look to develop a constructive two-way dialogue with shareholders. Equiniti's recent AGM trends research2 shows that executive pay and board diversity remain under the spotlight when it comes to remuneration and appointment/re-appointment votes.
The new UK Corporate Governance Code and Investment Association Public Register has also led to a greater focus on shareholder engagement and voting in 2018.
Allied to governance trends, M&A activity has also been a driver for business. Boudicca has acted on 18 deals worth c.£60bn in 2018, including Sky's takeover by Comcast. The growing number of activist hedge funds trying to capitalise on 'bumpitrage' opportunities, by acquiring stakes in target companies to hold out for improved bids before an offer is 'full and final', is putting boards on high alert during transactions.
Sheryl Cuisia, Managing Director and founder of Boudicca, said: "Proxy solicitation was inherited from the US and until recently was seen as necessary only in problematic situations. Today's ever-increasing corporate governance requirements, heightened investor and proxy adviser scrutiny, and increased shareholder activism, means that mandating a proxy solicitation consultant is becoming a fundamental necessity. Companies want specialist resource dedicated to handling all aspects of the proxy voting process to ensuring maximised positive votes, while investors are under increasing pressure to act responsibly."
Paul Matthews, CEO of Equiniti's Boardroom business, added: "Our clients are some of the largest and best-known businesses in the UK. The interest they have shown in Boudicca's services is both a testament to the skill and expertise of Sheryl's team, and an acknowledgement of the UK's changing governance landscape. With our newly established proxy solicitation and governance team in EQ US we look forward to similar success as we go into 2019."
For more information:
Temple Bar Advisory
Alex Child-Villiers / William Barker / Sam Livingstone
Tel: 0207 002 1080
Notes to Editor:
1. 'Bumpitrage' - Activists buying into the shares of issuers after deal announcements and agitating for a higher price (NortonRoseFulbright)
2. Equiniti AGM Trends 2018, 13 September 2018, https://equiniti.com/uk/news-and-views/eq-views/agm-trends-2018/
Equiniti Group plc is a multinational specialist outsourcer delivering technology-enabled solutions to some of the world's best-known brands and UK's largest public-sector organisations.
It is the UK's leading provider of share registration services, providing complex share registration and shareholder solutions to around 50% of the FTSE 100 and c.40% of the FTSE 250, managing more than 20 million shareholder accounts in total. It also has market leading positions in pension administration and software, and employee benefit schemes.
Equiniti's services, which are delivered by over 5,000 employees, benefit 28 million people in the UK and 120 countries around the world.
A leader in the growing arena of investor communications, and based in London, Boudicca works to secure maximised proxy voting and participation in shareholder meetings and corporate transactions. Boudicca has worked on 300 AGMs, EGMs and M&A transactions for clients in the UK, Europe, North America and cross-border since inception - including some of the most complex proxy voting cases and corporate transactions - and delivered a high rate of success.
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