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More asset managers and owners are rallying around a first-of-its-kind code for investment stewardship and corporate governance in the U.S.
Signatories to the set of voluntary principles, who now represent more than $20 trillion in combined assets under management, include BlackRock, State Street Global Advisors, and Vanguard. Membership has doubled since its launch in late January as J.P. Morgan Asset Management, HSBC Global Asset Management, and 20 other firms have joined the initiative.
Its framework lays out fundamental stewardship responsibilities for institutional investors on topics like proxy voting and engagement. The code also covers basic principles of good corporate governance that U.S.-listed companies should follow on issues such as board accountability and shareholder voting rights.
The Investor Stewardship Group’s goal is to become the nation’s unofficial stewardship code, starting in 2018, because unlike countries such as the U.K., the U.S. doesn’t have one of its own.
The more shareholders and assets under management that sign onto the ISG’s code, “I think the more it will de facto become that,” Allison Bennington, a partner at and the general counsel of ValueAct Capital, told Bloomberg BNA. The San Francisco-based hedge fund is a founding member of the group.
One aspect that sets its principles apart from similar efforts like the Commonsense Corporate Governance Principles—also signed by the CEOs of BlackRock, State Street and ValueAct—is that they’re not static.
“This one is not something that was put out there for people to look at,” Bennington said. “This one is live, real time, and gaining members all the time. It will continue to evolve over time as corporate governance itself evolves.”
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