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Taking ownership of ownership

Taking ownership of ownership. The challenges of pan-European share ownership Sarah Wilson Managing Director Manifest Information Services Ltd. 3 Themes, 1 Question. Question: Who is in charge of voting? What are the barriers? Voting issues Changes coming. What is Manifest?.

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Taking ownership of ownership

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  1. Taking ownership of ownership The challenges of pan-European share ownership Sarah Wilson Managing Director Manifest Information Services Ltd

  2. 3 Themes, 1 Question Question: Who is in charge of voting? • What are the barriers? • Voting issues • Changes coming

  3. What is Manifest? • Structured, consistent, comparable & timely • Governance metrics, proxy guidance • Independent & impartial

  4. Who’s in charge? • Probably not who you think! • Cast of characters • Registrars • Custodians/Sub-custodians • Voting agencies • Fund managers • Beneficial owners • Trade Associations • Regulators

  5. Registrars • Registered ownership model is of enormous benefit • Need to export this model to other markets • Oversight of AGM process, vote tabulation: legally profound process, confidence, communication, clarity

  6. Custodians • Most shares “owned” via pooled nominees • Pooled ownership obliterates real ownership • Custodians have mostly outsourced voting to 3rd parties • ONE OF THE MOST SIGNIFICANT BARRIERS

  7. Voting Agencies • Come in many flavours: • Tied to trade associations (Conflicts?) • Paid by issuers (conflicts?) • Axe to grind? • Relatively “cheap” analysis • M&A issues/investment research

  8. Fund Managers • Again, many flavours • Full-on, engaged, professional; or • Box-ticking, Lowest Common Denominator • Who engages? • Domestic/overseas issues

  9. Beneficial Owners • Not one size fits all • Pension funds • LGPSs • Trusts • Charities • Insurance funds • Domestic vs international perspectives

  10. Trade Associations & Regulators • Gate-keepers of collective thinking • Guidelines may not be dynamic • Steering & rowing problems • Collective view vs the individual

  11. Barriers • Foreign stock exchange rules imposed outside domestic frontiers • Pooled a/c’s • Sub-custody access • Share-blocking • Wet-ink signatures • Physical attendance • Ancient rituals & procedures not keeping pace with technology

  12. Barriers (2) • Lack of investment • Perceived “low-value” of governance • Needs closer integration with investment activities • Investment governance vs. issuer governance

  13. Future Issues • Promulgation of transparent, global, open standards • Closer integration: • Governance & Investment • IROs/Co-Secs • Real ownership dialogue • Get behind the nominee • Talk to real owners Away from box-ticking/off-the-shelf boiler-plate

  14. Future Issues • Know the cast & understand their motivations • Understand the mechanics – get the real answers, not the spin • Governance is highly-charged & politicised

  15. EU Consultation • Broadly very supportive • Concerned about lack of joining up with clearing/settlement • Many issues could be resolved by better working practices & willingness to embrace change • Lack of healthy competition

  16. Finally Thank you for listening! Sarah Wilson +44 (0)1376 504503 sarah.wilson@manifest.co.uk http://www.manifest.co.uk

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