1. Shareholders’ Activism: The Role of Institutional Investors in Corporate Governance Michael McKersie Manager, Investment Affairs Association of British Insurers 51 Gresham Street London EC2V 7HQ Tel (020) 7216 7659 Fax (020) 7696 8979

2. The Role of ABI  Trade Association for Insurance Companies  As Institutional Investors - £1,000 billion (approx) of investments

3. The Locus of Shareholders  ownership interest  accountability of company boards

4. ABI Guidelines  cover a range of governance aspects  underpin institutional policy framework  examples: pre-emption and share schemes

5. The IVIS Monitoring Service  www.ivis.co.uk

6. The Impetus Towards Greater Activism  Investor pressure  Myners  Legislation (the threat of)  The “comply or explain” approach

7. Response to Impetus  Institutional Shareholders’ Committee paper  Enhanced programme of engagement (collectively through ABI)

8. ABI and Activism  the benefit of a collective approach  where there is a governance component  type and size of company

9. The Role of Activism  Not a substitute for market discipline but an adjunct  An investment style – but not for all  Not an objective in itself – rather, long-term shareholder value creation