Influencing the debate

We take action to address key themes and emerging governance and sustainability issues that could impact the value of our clients’ investments.

We are invested in thousands of individual companies around the globe, which we manage on behalf of our clients for the long term. Therefore we have a responsibility to address topics that can impact all companies. This may be done by engaging directly with companies or with governments, regulators, other investors and wider stakeholders.

Board accountability

To be successful, companies need to have people at the helm who are best equipped to create resilient and long-term growth. By voting and engaging directly with companies, we encourage a management structure that helps companies to control risks and to benefit from emerging opportunities.

Market Resilience and Long-Termism

As a long-term investor, it is essential that markets are able to continue to generate value for our clients over time. We work to prevent market behaviours that are detrimental to the value-creation of our clients’ assets.

Sustainable systems

Natural and human capital are the most vital components of every business. It is in the interest of all stakeholders that companies build a sustainable business model that is beneficial to society as a whole. In doing so, we believe companies will become more resilient to market changes and the whole market will benefit.

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Board effectiveness

An effective board is central to any successful company.  A board should regularly review its composition and succession planning to ensure it continues to be comprised of the right people for future success.

Recent publications related to board effectiveness:

Board-investor Dialogue
Board Effectiveness Review
Board Tenure in United States
The Role of the Senior Independent DirectorA guide to separating the roles of CEO and board chairA guide to the role of the Lead Independent Director
A guide to the nomination of board chairs 

Board Diversity

Having a diverse board can strengthen and broaden a board’s dialogue and debate, leading to better decisions for investors. We believe that having a mix of genders, ages, cultures, nationalities, experiences, skills and technological know-how is important in order to enrich the decision-making process in the boardroom.

Recent publications related to board diversity:

Market insights: The importance of gender diversity
Gender Diversity on Boards
Board Independence in Japan

Remuneration

The reward and incentive structures provided to management are an important mechanism to align executives with investors. We promote remuneration structures that are simple, transparent and aligned with the long-term strategy of the company.

Recent publications related to remuneration:
LGIM's Principles on Executive Remuneration
Executive Pay - Mind the Gap

Investor Stewardship

We are active proponents of the benefits of stewardship codes. We believe that more, and higher quality investor stewardship will improve the accountability of companies to their investors. LGIM is working to ensure that codes continue to evolve. LGIM is fully supportive of, and complies with, the following stewardship codes:

UK Stewardship Code

LGIM response to UK Corporate Governance and Stewardship Code Consultation

Japan Stewardship Code

Malaysian Stewardship Code

Short-Termism

We seek to encourage long-term thinking, planning and behaviour by all stakeholders in the investment markets. This includes companies, regulators, boards and other investors.
Please find below our recent publications related to countering short-termism:

A guide to mergers and acquisitions: Board Oversight 

Tendering Your Auditor

UK Investor Forum

LGIM response to Hong Kong Exchange New Board Concept Paper

LGIM response to Hang Sang Index on Eligibility of Foreign Companies, Stapled Securities, Weighted Voting Right Companies 

LGIM response to Hong Kong Stock Exchange on Listing Regime for Companies from Emerging and Innovative Sectors

LGIM response to Hong Kong Stock Exchange Review of the Corporate Governance Code and Related Listing Rules 

LGIM response to Monetary Authority of Singapore on Corporate Governance Code Consultation

LGIM response to MSCI consultation on the treatment of non-voting shares in the MSCI Equity Indexes

LGIM response to AFEP-MEDEF Corporate Governance Code consultation

LGIM response to proposed amendments to the German Corporate Governance Code 2019 

Improving Transparency

We believe that improved transparency (ie providing relevant and understandable information) is vital to creating a healthy market that is beneficial to all stakeholders. Without appropriate transparency, investors are unable to price the level of risks and opportunities. Companies also benefit from better transparency by measuring and improving their performance.

Please find below our recent publications related to improving transparency:

Guide to Better Corporate Reports

Corporate Tax

Climate Change

Climate change poses risk to long-term financial stability. We are committed to achieving the global climate change goals and to playing a positive role in the transition to a low carbon economy.
Please find below our recent publications related to climate change, energy and water:

Task Force on Climate-related Financial Disclosures report 2018

IIGCC guide: addressing climate risks and opportunities in the investment process

Climate Change Policy

An open letter from LGIM and other global investors to the oil and gas industry

Energy Renewed

Time To Act On Climate Change

Supply Chain

It is essential for businesses to have robust supply chain management, which draws on large human and natural resources. We engage to ensure companies are addressing the operational, financial and reputational risks associated with their supply chains.

Food Waste - Are The Food Retailers Acting Responsibly?

Human Capital

Employees should be the greatest assets to any company. We seek to ensure human capital is appropriately valued and developed by companies and that their human and labour rights are respected.