Taking ownership of ownership The challenges of pan-European share ownership Sarah Wilson Managing Director Manifest Information Services Ltd

3 Themes, 1 Question Question: Who is in charge of voting? What are the barriers? Voting issues Changes coming

What is Manifest? Structured, consistent, comparable & timely Governance metrics, proxy guidance Independent & impartial

Who’s in charge? Probably not who you think! Cast of characters –Registrars –Custodians/Sub-custodians –Voting agencies –Fund managers –Beneficial owners –Trade Associations –Regulators

Registrars Registered ownership model is of enormous benefit Need to export this model to other markets Oversight of AGM process, vote tabulation: legally profound process, confidence, communication, clarity

Custodians Most shares “owned” via pooled nominees Pooled ownership obliterates real ownership Custodians have mostly outsourced voting to 3 rd parties ONE OF THE MOST SIGNIFICANT BARRIERS

Voting Agencies Come in many flavours: –Tied to trade associations (Conflicts?) –Paid by issuers (conflicts?) –Axe to grind? –Relatively “cheap” analysis –M&A issues/investment research

Fund Managers Again, many flavours – Full-on, engaged, professional; or –Box-ticking, Lowest Common Denominator Who engages? Domestic/overseas issues

Beneficial Owners Not one size fits all –Pension funds –LGPSs –Trusts –Charities –Insurance funds Domestic vs international perspectives

Trade Associations & Regulators Gate-keepers of collective thinking Guidelines may not be dynamic Steering & rowing problems Collective view vs the individual

Barriers Foreign stock exchange rules imposed outside domestic frontiers Pooled a/c’s Sub-custody access Share-blocking Wet-ink signatures Physical attendance Ancient rituals & procedures not keeping pace with technology

Barriers (2) Lack of investment Perceived “low-value” of governance Needs closer integration with investment activities Investment governance vs. issuer governance

Future Issues Promulgation of transparent, global, open standards Closer integration: –Governance & Investment –IROs/Co-Secs Real ownership dialogue –Get behind the nominee –Talk to real owners Away from box-ticking/off-the-shelf boiler-plate

Future Issues Know the cast & understand their motivations Understand the mechanics – get the real answers, not the spin Governance is highly-charged & politicised

EU Consultation Broadly very supportive Concerned about lack of joining up with clearing/settlement Many issues could be resolved by better working practices & willingness to embrace change Lack of healthy competition

Finally Thank you for listening! Sarah Wilson +44 (0)