Report of the Chamberlain
The Board considered a report of the Chamberlain providing an update on points raised by Members following a presentation from colleagues at Principles of Responsible Investment (PRI), and on the advice/comments received from the Financial Reporting Council (FRC) following the submission of a draft Statement of Commitment to the UK Stewardship Code.
The Board was advised that following the previous meeting, the Chamberlain had spoken with PRI regarding reputational risk, and the outcome of these discussions were set out in the report. The City of London Corporation, if signing up, would voluntarily report in the first year, and in subsequent years would be required to report, but would not be required to publish PRI feedback on the report.
The Statement of Commitment to the UK Stewardship Code was presented to the Board for re-approval following advice and comments from the FRC. If approved, the statement would be submitted for formal assessment. The aim was to be awarded Tier 1 status, and the Board was asked to delegate authority to the Town Clerk in consultation with the Chairman and Deputy Chairman to agree any further changes necessary to achieve Tier 1 status.
The Board was advised by Mercer that the strands of work the Corporation had already undertaken would put them in a strong position to receive a positive end of year report. Members noted that the Corporation did not have to sign up immediately, but there was appetite for the Corporation to take the lead in this area and set an example. The first year would be the most burdensome, but reporting would become easier to manage once the process for doing so was set up following the first year. Mercer would be able to provide assistance in the process, such as by reviewing fund managers and writing to managers who were less compliant. It was noted that Mercer would undertake an annual assessment of the stewardship activities of the City’s equity and multi-asset managers which would be published on the Corporation’s website by virtue of it being reported to the Financial Investment Board as a public report, but could be promoted more widely if this was desired.
RESOLVED – That the Financial Investment Board:
i. Agree the revised Statement of Commitment to the UK Stewardship Code (the Statement) and for Mercer to submit it to the FRC for formal assessment;
ii. Confirm their agreement to progress the City’s application to PRI; and
iii. Agree to delegate authority to the Town Clerk in consultation with the Chairman and Deputy Chairman to agree any further changes to the Statement, in the event the FRC do not assess it at Tier 1.