CORPORATE GOVERNANCE
Corporate governance concerns itself with the framework within which the board controls and monitors the business of the company. It focuses on the responsibility of Directors for setting strategic aims, establishing financial policies and overseeing their implementation as well as reporting to shareholders on the activities and progress of the company. We consider good corporate governance and effective management as vital to the successful implementation of a company's corporate objectives and compliance with the "Combined Code" as being broadly indicative of good corporate governance, when supported by meaningful disclosure.
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Corporate Governance Policy
Legal & General Investment Management (LGIM) have implemented a Corporate Governance policy through dialogue with management, intervention on specific issues of concern and voting.
Our Approach
When considering Corporate Governance we develop our approach with other institutional investors through our membership of the Association of British Insurers (ABI) and the National Association of Pension Funds (NAPF). Although we are guided by recommendations made by these organisations, LGIM will make the voting decision after discussions with companies, their advisors and our clients. Andy Banks, Head of Corporate Governance at LGIM is a member of the Corporate Governance Forum and the ABI’s investment committee.
Shareholder Activism
Our policy aims to support "The Responsibilities of Institutional Shareholders and Agents - Statement of Principles" published by the Institutional Shareholders’ Committee. LGIM recognises that share ownership gives rise to governance responsibilities, and that our primary duty is to those on whose behalf we invest. We believe it is important for companies to maintain an honest and open dialogue with their shareholders with a view to listening to their concerns and communicating how shareholder value is being created. Our objective is to protect and enhance shareholder value, and our policies on activism are designed with this in mind. As a major investor in UK shares, with significant holdings in all constituents of the FTSE All-Share index, LGIM and its clients have mutual interest in improving corporate performance.
