1. Corporate Engagement Church Investors Conference 22 June 2015 1

2. Corporate engagement: what it is & why we do it typically seeks clarification of or a change in behaviour involves meeting with and talking to companies about issues of interest or concern that may affect value involves more than voting, but voting remains a vitally important element of engagement activity The ultimate aim is to ensure companies are well- run and deliver returns that are sustainable Collaborative engagement is seen as an important element of improved ownership

3. Forms of engagement

4. Position Engaged 4

5. Corporate engagement: what it is & why we do it Lord Myners (2001) “Shareholders cannot micromanage the companies in which they have holdings… but … where they identify problems, they should actively engage with the company to ensure that they are tackled ” “Intervention requires persistence and a thick skin, perhaps raising issues repeatedly over a period of time with firmness until concerns are addressed. Merely meeting senior management and expressing polite reservations about strategy is not sufficient, if it is not effective.”

6. Effectiveness of Engagement 6 all engagements assessed on outcomes time is a factor… … as is persistence

7. News Corp/21 st Century Fox 2010 engaged, poor governance 2011 hacking scandal broke, escalation of engagement 2012 resolution to split CEO/Chair, support from 2/3 of the non-Murdoch shareholders 2013 resolution for independent chair 2014 supported two directors 2015 James appointed CEO

8. Carbon risk management Aiming for A resolutions Both Shell and BP boards advised support Emphasis on constructive nature of engagement Large international institutional co-filing group, press attention, peer position, pre-declarations from other investors Unprecedented support for resolutions which received over 98% and 99% of vote Photo Credit: alegriphotos.com

9. Church Investors Conference 22 June 2015 www.lapfforum.org info@lapfforum.org Tessa Younger, Engagement Services Manager, PIRC Ltd Tessay@pirc.co.uk www.lapfforum.org info@lapfforum.org 22 June 20159