Minerva Analytics (Manifest) has been a voluntary signatory of the FRC’s Stewardship Code since its launch in 2010. For the second consecutive year, Minerva has been a signatory and our latest report is available here.
Our Stewardship Code reporting aligns with the key Principles of the Code. As a service provider to asset owners and managers, we support the promotion of effective stewardship in line with their fiduciary responsibilities.
Minerva is also a signatory of the Best Practice Principles for Shareholder Voting Research. Our BPP statement contains more detail about the practical operations of our service.
The Role of Proxy Advisors and Research Analysts
Minerva very much welcomes the inclusion of guidance on the use of voting advisory services in the Stewardship Code. We hope that these disclosures will bring much needed transparency and understanding of how voting decisions are made and the proper of analysts in the stewardship process.
In some markets there has been a move towards prescribing mandatory voting. We recognise that some investors have therefore felt pressured to vote at all costs in order to meet compliance requirements.
Minerva believes in the need for “quality of voting” and we hope that the Stewardship Code will act as a positive catalyst for dialogue which prioritises informed engagement over high volume box-ticking.
Principle 1 | Principle 2 | Principle 3 | Principle 4
Principle 5 | Principle 6
Principle 1: Signatories’ purpose, strategy and culture enable them to promote effective stewardship.
Minerva Analytics explains in the report the organization’s purpose, the services it offers, and provides an overview of its culture, values, business model, and strategy. Additionally, the report outlines the actions taken to ensure that the strategy and culture promote effective stewardship. Furthermore, we disclose an assessment of a client of our services that shows how well we have served their best interests.
Principle 2: Signatories’ governance, workforce, resources and incentives enable them to promote effective stewardship.
In the report, Minerva demonstrates compliance by explaining how our governance structures and processes enable oversight and accountability in promoting effective stewardship, and the rationale behind our chosen approach. We outline how the quality and accuracy of our services contribute to effective stewardship.
Additionally, we detail how we have appropriately resourced stewardship by describing our organisational and our structure, including qualifications, training, and diversity of our team. We also highlight our investment in systems, processes, research, and analysis, as well as how our staff is motivated to deliver high-quality services.
We ensure that our fees are competitive and disclose an assessment of how effective our governance structures and processes have been in supporting our clients’ stewardship goals.
Principle 3: Signatories identify and manage conflicts of interest and put the best interests of clients first.
We outline how our conflicts of interest policy prioritises client interests while minimising or avoiding conflicts of interest.
Principle 4: Signatories identify and respond to market-wide and systemic risks to promote a well-functioning financial system.
The report shows how we identified and addressed market-wide and systemic risks, collaborated with stakeholders to improve financial market functioning, and participated in relevant industry initiatives, along with an assessment of our contributions and effectiveness.
Principle 5: Signatories support clients’ integration of stewardship and investment, taking into account, material environmental, social and governance issues, and communicating what activities they have undertaken.
In this section we explain how our services support and align with our clients’ stewardship goals. Also, how we seek clients’ views and feedback and methods and frequency of communication with clients.
Principle 6: Signatories review their policies and assure their processes.
To conclude, we offer insights into how our policies and activities are reviewed to ensure effective client stewardship, secure assurance for our stewardship actions, and ensure that our reporting is fair, balanced, and comprehensible.
Customised Stewardship Monitoring
Voting guidance is specific to each client based on their individual voting and stewardship policies. These policies create the framework for our analysts who answer a comprehensive series of voting and governance-related questions based on company disclosures – including explanations if any. One set of answers informs the various models without the need for repetition which may lead to inconsistency and inaccuracy. Not all clients are concerned by the same issues and so our application of technology and expert understanding gives clients answers on their terms. Clients can use this system to create Red/Amber/Green or For/Against/Abstain/Case-by-case guidance per resolution. In addition, Minerva operates a letter grade system for remuneration and sustainability governance which act as triggers.
We understand that boards are concerned about the correlation between voting recommendations and vote outcomes. There is no evidence in the UK market of a direct correlation between recommendations and final vote outcome, there is however a clear relationship between investors’ voting policies and the issues that we analyse.
Votes withheld from management through an against vote or an abstention should always be treated as a signal from investors that they wish to engage on a matter of concern.
To support investor engagement and dialogue, Minerva’s electronic voting platform offers an integration voting rationale function which allows investors to write to explain why they have voted a particular way and for that letter to be sent to the company when the votes are submitted.
Stewardship Code Contact Point
For further information please contact:
Sarah Wilson
Chief Executive
Minerva Analytics
Telephone: +44 (0)1376 503500
Email: hello@minerva.info
Last Updated: 3 October 2024