International Corporate Governance Network

Amazing to have all four standard-setters here today, David Madon says in introducing this session. "How do you see the connectivity between ethics, assurance and good governance?" he asks the panel. Gabriela Figueiredo Dias hopes this conversation will help connect investors and standard setters, and reflects on the need for both financial and sustainability reporting to be "effective, reliable and comparable". She says "Ethics and independence standards are about how to behave when professionals face ethical dilemmas" - which they do and it's essential that they be equipped for those. Gabriela emphasises that "ethics and independence cannot be an optional extra". https://lnkd.in/djgjGzrH #ICGN2024 #conference #governance #corpgov #stewardship #sustainability #investors #assetmanagers #assetowners #sustainability #sustainabilityreporting #assurance

Investors and industry experts speaking to Emanuela (Emmy) Hawker on the Financial Conduct Authority's #listing reforms are divided on diminishing shareholder voting rights, as the regulator looks to shake up competition. Comments from Dr. Roger Barker (Institute of Directors (IoD)), Jen Sisson (International Corporate Governance Network), Caroline Escott (Railpen), and Annabel Brodie-Smith (The Association of Investment Companies (AIC)). Read the full feature here:

Gabriela Figueiredo Dias emphasises the need to produce ethics and independence standards fit for purpose for the "risks and threats and problems" that affect sustainability reporting, which aren't identical to financial reporting. In terms of the importance of regulation, to provide consistency between companies, "How do you think about the role of regulators?" David Madon he asks Akira Nozaki. "It's essential for a national regulator like us to take a flexible and dynamic approach" that meets stakeholders' needs, Akira says, and "we will continue to contribute to the establishment of an international disclosure framework". He says that educational materials on standards (eg from ISSB) will be very valuable. "Limited versus reasonable" assurance is key to understand, alongside what the early assurance reports will look like, says David Madon. Tom Seidenstein says the goal of "trying to get the same amount of trust engendered" on sustainability reporting as on financial reporting should drive outcomes. "Limited assurance is a pragmatic approach" given that there's only a certain amount of capacity at the moment, both among preparers and assurance providers, but "investor demands will play a big role" in the future of this, he says. Tom describes the assurance report as a means to convey information about the maturity of this process and so there should be a degree of comfort - "what does good look like across the maturity curve?" will be an ongoing discussion. https://lnkd.in/djgjGzrH #ICGN2024 #conference #governance #corpgov #stewardship #sustainability #investors #assetmanagers #assetowners #sustainability #sustainabilityreporting #assurance

Amundi’s head of proxy voting, Edouard Dubois, has pushed back against suggestions that shareholder proposals have been reducing in quality. Speaking at the International Corporate Governance Network’s (ICGN) annual conference on Tuesday, Dubois said: “We hear a lot that they [proposals] are of a lesser quality and we would disagree with that.” Dubois, explained that filers are “getting savvier. They are engaging a lot with investors to understand expectations. And I think they are craftier in their wording, making sure they are getting less prescriptive."

Amazing to have all four standard-setters here today, David Madon says in introducing this session. "How do you see the connectivity between ethics, assurance and good governance?" he asks the panel. Gabriela Figueiredo Dias hopes this conversation will help connect investors and standard setters, and reflects on the need for both financial and sustainability reporting to be "effective, reliable and comparable". She says "Ethics and independence standards are about how to behave when professionals face ethical dilemmas" - which they do and it's essential that they be equipped for those. Gabriela emphasises that "ethics and independence cannot be an optional extra". https://lnkd.in/djgjGzrH #ICGN2024 #conference #governance #corpgov #stewardship #sustainability #investors #assetmanagers #assetowners #sustainability #sustainabilityreporting #assurance

Arleen McGichen says assurance "is not about controlling and preventing and policing", it's there to enable a business to be more successful. "You put brakes on a car to go faster, not slower", she says, it's about being a strategic enabler. Arleen says the role of internal audit is to look for blind spots, and talks about predictive assurance. "It's behaviour that drives culture" says Annabel Gillard, including what behaviour is incentivised and promoted. "Corporate culture is the single biggest driver of organisational success, she says, and can also help protect organisations from scandals. Your incentives need to be pointing in the same directions as your controls, Annabel states. Peter Swabey agrees that organisational culture is a key driver of organisational success - but also of organisational failure. He defines culture as "how we behave when no-one's looking", so having a great culture is about doing the right thing. How you achieve success is as important as what you achieve, Peter says, referencing the Volkswagen scandal. Where both internal and external auditors have a seat at the table, that's a good culture and offers an opportunity to add value, Arleen McGichen says. Peter Swabey describes a respect for those audit functions and a willingness to listen to them as part of organisational culture. If audit recommendations aren't being implemented, the board should be asking "Why not?" says Chuck Canfield. https://lnkd.in/djgjGzrH #ICGN2024 #conference #governance #corpgov #stewardship #sustainability #investors #assetmanagers #assetowners #internalcontrols #risk

Susanne Stormer highlights the emerging TISFD framework: https://www.tisfd.org, which formally launches in September. Paul Rissman talks about the thinking and the new taskforce behind that, which is currently in a preparatory stage. As that moves forward, "working groups will be formed", and investors and companies invited to join those to identify systemic risks. Susanne asks: what are the metrics to capture these risks and assess progress? Daniel Neale (FICRS) says it's very hard to find these metrics, there's no one size fits all and Michael Herskovich agrees that at this stage, we have to look at policies (e.g. does the company have a policy in place?), as measuring performance is difficult when it comes to social risks. David Frick says we (ie Nestle) need to get better at explaining to customers that when they buy products from responsible companies, they are helping these companies invest in socially responsible practices, including living wages. Unilever's Jonathan Gill says there is a small proportion of investors that truly understand social risks and "there's a big opportunity for more investors to be more proactive on this agenda". The panel is now taking questions from our audience. https://lnkd.in/djgjGzrH #ICGN2024 #conference #governance #corpgov #stewardship #sustainability #investors #assetmanagers #assetowners #risk #socialrisk #inequality