New research findings presented at London Business School on 3 October drew a large audience of asset managers, investors, policy advisors and academics who were particularly interested in the influence of corporate governance on the actions of a large asset manager.
The study, which was funded by the Norwegian Finance Initiative and conducted by Professors Marco Becht (Solvay Brussels School of Economics and Management), Julian Franks (London Business School) and Hannes Wagner (Bocconi University), is part of an ongoing project based on a unique data set provided by a large UK asset manager, Standard Life Investments (which has subsequently merged with Aberdeen Asset Management to become Aberdeen Standard Investments). It covers the period 2003 - 2015 and documents the active ownership as exercised by its fund managers and governance and stewardship team.
The presentation of initial findings from the study described the internal governance and stewardship workings of a large active owner, how voice and exit interact in practice, which topics stirred the most frequent engagement activities, and how corporate governance influences fund manager decisions.
The presentation was followed by a panel discussion chaired by Professor Colin Mayer (Oxford University). Participating on the panel were John Kay CBE FRSE FBA, Visiting Professor, London School of Economics; Sir Richard Lambert, Chairman of the British Museum and of Bloomsbury Publishing Plc; Keith Skeoch, CEO at Standard Life Aberdeen; and Euan Stirling, Head of Stewardship and ESG Investment at Aberdeen Standard Investments.
Speaking at the event, Professor Marco Becht, said “Access to the records of Standard Life Investments allowed us to inform and test theories of corporate governance through voice and exit. The unique data set covers holdings in around 800 UK listed companies held by equity funds that they managed actively over the sample period. An internal flag called a “Governance Health Warning” appeared in around ten percent of the portfolio companies during the sample period. The next focus of this study will be to examine how much active ownership contributes to performance.”
The full paper “Corporate governance through voice and exit: Evidence from Standard Life Investments” is expected to be published in the coming months and will be accessible on the ECGI website.
The event was held in collaboration with the AQR Asset Management Institute at London Business School.