The Deal held its virtual corporate governance event this week and sat down with Ray Cameron, Head of Investment Stewardship for the Americas at BlackRock. Cameron spoke about the index fund’s evolving stance on holding companies accountable, specifically when it comes to aiming its scrutiny at board directors. Cameron pointed out that in 2019, the firm voted against 5,000 directors, citing issues such as lack of independence, poor progress on climate change or lack of diversity. He also commented that BlackRock has begun to target directors who “should be assuming more responsibility for lack of progress” in those areas.
At that same event, GPP’s own Michael Flaherty took part in a panel that addressed the changing role of the CEO. Mike was joined by two veteran board directors, Anna Catalano and Wendy Lane; Paul Schneider of Ontario Teachers Fund; and Suzanne Yoon of Kinzie Capital Partners. The conversation centered on the increased focus on ESG in the COVID-19 era, changes in how CEOs are addressing stakeholder concerns and how millennials are shaping CEO communications.
Lastly, we saw an announcement that highlighted the convergence of so many themes this newsletter covers: shareholder activism, corporate governance, ESG, and the financial markets. The Financial Times’ Lex column viewed Deutsche Börse’s acquisition of a majority stake in Institutional Shareholder Services (ISS) for €1.9 billion as a big data push in the face of growing rivals. According to the piece, data is quickly becoming king for exchange operators and after its failed attempt to purchase London Stock Exchange in 2017, Deutsche Börse has lagged peers. Lex commented that its stake in ISS should help the exchange operator tap into growing demand for recommendations for and standardization of ESG investments, and help address the growing concern over the concentration of voting power. For ISS and its influential research team, the proxy adviser will have yet another owner after years of trading hands between companies and private equity firms.
Next week, the newsletter will take a break for the holiday. We'll return in December.
Have a great weekend,
Joel
