Equities

Our fund managers believe that the long-term success of companies is supported by effective investor stewardship and high standards of corporate governance. We believe that if a company is run well, it is more likely to be successful in the long run.

We maintain a constructive dialogue with the companies that we invest in. We do this by meeting regularly with company directors – both executive and non-executive. These meetings are central to our approach and are focused on identifying whether a company’s strategy is aligned with our interests as long-term shareholders.

Social and environmental issues can also have an important impact on company performance. Well-managed companies should take these issues into consideration as part of their successful development. We look at how companies address these issues, among other things, when we analyse them. We feel it is one of the factors that influence a company’s long-term prospects.

Our Corporate Finance and Stewardship team have always been advocates of responsible share ownership and oversee our stewardship of the companies we invest in. Active voting is an integral part of our investment approach. We believe exercising our votes adds value and protects our interests as shareholders.

For more information contact us.

Our approach

M&G’s investment teams incorporate environmental, social and governance (ESG) considerations into their decision-making and active ownership practices. This approach is strongly aligned with M&G’s long-standing principles as an active, fundamentals-focused investor.

M&G has been a signatory to the United Nations Principles for Responsible Investment (UNPRI) since January 2013, and has for many years supported the practices and standards promoted by the FRC Stewardship Code and the UK Corporate Governance Code. We seek to apply these principles consistently across our global equities investments.

M&G Equities has recently built on the existing ESG support available to investment teams by signing up to the services of two leading providers of ESG-focused information and analysis:

  • MSCI ESG Research: providing ESG information, analysis and screening across an investment universe of global companies
  • ISS-Ethix: supplying analysis based on companies’ performance against the principles of the UN Global Compact, an initiative promoting good corporate practice in the areas of human rights, labour rights, bribery & corruption, and the environment

These services provide M&G’s investment teams with company-specific and industry-focused ESG analysis, helping us to gain a better understanding of the ‘extra-financial’ issues faced by existing and potential investments.

Supplemented by other sources of ESG information – such as company reporting, third-party broker research and media reports – the analysis supports investment teams in their understanding of the ESG risks & opportunities facing companies; it also provides insights into how companies are managing those risks and creates a solid basis for our interactions with investee businesses on ESG issues. Across M&G’s investment teams, we have initiated discussions with ‘flagged’ companies to assess their approach to relevant ESG issues, and to monitor how they are managing developments over time.

Case studies

At M&G we seek to add value for our clients by pursuing an active investment policy through portfolio management decisions, maintaining a constructive dialogue with management and by voting on resolutions at general meetings.

M&G complies with the UK Stewardship Code, which has set out the principles of building constructive relationships and engagement between asset managers and investee companies. We have outlined how we discharge our stewardship responsibilities in M&G and the UK stewardship code. Whilst UK companies are the primary focus of the Stewardship Code, we endeavour to extend these principles to our overseas-listed equity as widely as we can, taking into consideration local regulations and market practice.

M&G will engage on any issues that may potentially affect a company’s ability to deliver long-term sustainable performance and value to our clients. Much of our engagement with companies is conducted on a confidential basis, but we have published below recent examples of issues that we have discussed:

M&G's Corporate Finance and Stewardship team

The Corporate Finance & Stewardship team has a number of responsibilities at M&G, primarily supporting our investment teams on the range of issues that arise from being long-term shareholders. The team coordinates M&G’s Stewardship and Responsible Investment activities, engaging with investee companies on issues including corporate governance, board composition, management succession planning, remuneration, sustainability and a number of other ESG issues. The team maintains a constructive dialogue with company management (executive and non-executive) and regularly interacts with company chairmen and senior independent directors. The team also discharges M&G’s voting responsibilities at shareholder meetings for investee companies, believing this is one of our central responsibilities as long-term shareholders. Beyond this, the team is responsible for coordinating M&G’s participation in external initiatives and investor collaborations including, among others, the UK’s Investment Association, the UN Principles for Responsible Investment and the Asian Corporate Governance Association.

Rupert Krefting

Rupert KreftingJoined M&G in March 2016 as Head of Corporate Finance and Stewardship, after 22 years working in investment banking. Most recently Rupert was at Numis, where he was a Director in its corporate broking and advisory business for 8 years. Prior to Numis, Rupert held senior roles at Investec and Panmure Gordon on the advisory side. Rupert graduated from Southampton University with an Honours Degree and qualified as a chartered accountant with Coopers & Lybrand. Rupert chairs M&G’s Responsible Investment Advisory Committee and represents M&G on the Investment Association Corporate Governance Committee, the Investor Forum and the All-Party Parliamentary Governance Group.

Simon Bailey

Simon BaileyJoined the Corporate Finance and Stewardship team in January 2016, with a particular focus on international companies, building on more than 15 years of experience as a fund manager and analyst. From 2011, Simon was deputy fund manager of the M&G Global Dividend Fund and previously managed the M&G Smaller Companies Fund for nearly a decade with top-quartile returns under his tenure. He joined Prudential in 1997 and became a member of the UK smaller companies team two years later, before joining M&G following Prudential’s acquisition of M&G in 1999. Prior to Prudential, Simon worked at a number of financial institutions in areas such as corporate finance and derivatives. He has an Honours Degree in Economics from Durham University and is a CFA charterholder.

Matthew Beardmore-Gray

Matthew Beardmore-GrayJoined the Prudential in 1985 as Pharmaceuticals analyst, and moved to the Corporate Finance Department in 1989. He joined M&G following Prudential’s acquisition of M&G in 1999. Matthew’s main focus is UK-listed companies. Over the years, he has participated in a number of the Investment Association’s initiatives, including most recently the Stewardship Reporting Working Group. Matthew has an Honours Degree in Physiology and Biochemistry from Southampton University and achieved a PHD (1982) in Microbial Bioenergetics.

Rosie Brydon

Rosie BrydonJoined M&G in 2003 and has been a member of the Corporate Finance and Stewardship team since 2014. Predominantly focused on UK listed companies covering a range of issues including corporate activity; corporate governance; stewardship; shareholder engagement and voting; and responsible investment. Rosie participates in the Investment Association remuneration & share schemes committee and the intangible reporting working group. Prior to joining M&G, Rosie worked for Deloitte and Arthur Andersen in both London and Chicago and has a BSc Degree in Biological Sciences from the University of Durham.

Ben Constable Maxwell

Ben Constable MaxwellJoined M&G in 2003 as an Investment Specialist supporting the Global Equities team before moving to the Corporate Finance and Stewardship team in 2013, focusing on corporate governance and ESG at international companies. Ben has been responsible for developing the incorporation of ESG in M&G’s investment processes and sits on M&G’s Responsible Investment Advisory Committee, which oversees Responsible Investment activities at M&G including the firm’s membership of the UNPRI. Previous to M&G, Ben spent four years in the Equities team at Invesco Perpetual. Ben graduated from the University of Newcastle-upon-Tyne with an Honours Degree in Classics.

Lee Kinsville

Lee KinsvilleJoined the Corporate Finance and Stewardship team at M&G in 2003. Initially focusing on UK share ownership issues and proxy voting, Lee’s role now has a global perspective. Formerly a portfolio manager at Brewin Dolphin where Lee attained membership of the Securities Institute through completion of the Securities Institute Diploma examinations; and a research analyst at the UK corporate governance consultancy Pensions Investment Research Consultants. Lee graduated from Anglia Ruskin University with B.A. (Hons) in Business Studies.

Corporate governance

Governance and stewardship

M&G supports the UK Corporate Governance Code and applies the Code subject to the individual circumstances of the company concerned. M&G seeks to act as a responsible shareholder and has obtained an assurance opinion on the UK Stewardship Code. We have outlined how we discharge our stewardship responsibilities in M&G and the UK stewardship code.

The UK Corporate Governance Code identifies the principles that underlie an effective board. The UK Stewardship Code sets out the principles of effective stewardship by investors.

Stewardship aims to promote the long term success of companies in such a way that the ultimate providers of capital also prosper. Effective stewardship benefits companies, investors and the economy as a whole.

In publicly listed companies responsibility for stewardship is shared. The primary responsibility rests with the board of the company, which oversees the actions of its management. Investors in the company also play an important role in holding the board to account for the fulfilment of its responsibilities.

Issues arising from share ownership - our responsibilities as shareholders 

Companies should seek to achieve long-term investment returns for their shareholders, thereby contributing to a successful economy. Shareholders, as providers of equity capital, are the ultimate owners of companies. 

Company boards must consistently satisfy both customers and the reasonable expectations of employees, as well as acting responsibly towards society as a whole, in order to ensure success over the long term. 

M&G seeks to add value for its clients by pursuing an active investment policy through portfolio management decisions, by voting on resolutions at general meetings and by maintaining a continuing dialogue with company management. Meetings with companies will therefore occur on a regular basis. This enables us to monitor company development over time and assess progress against objectives.

Click here for M&G's "Issues arising from share ownership" document.

M&G and proxy voting

An active and informed voting policy is a vital part of our stewardship philosophy and an integral part of protecting our interests as long-term shareholders. Effective stewardship promotes the long-term success of companies in such a way that customers, employees, and society as a whole prosper alongside shareholders (the ultimate providers of capital). Our voting policy supports this objective – for example, we are clear that remuneration policies applying to executive directors should be set as part of the wider remuneration policy applying to the broader employee population.

We aim to vote on resolutions at all general meetings of companies held in M&G’s actively managed portfolios. However, a fund may refrain from voting some or all of its shares if doing so is in the interest of the fund, e.g. if exercising the vote would result in the imposition of trading restrictions (‘blocking’).

When considering proxy proposals, we look to support management of the companies in which we have chosen to invest, but the ultimate decision will be determined by an assessment of the impact on our investments and the long-term interests of shareholders. We will vote against proposals that compromise these interests.

Where we have concerns about a company, it is often the case that these have been or will be expressed to the company and that any voting decision will depend on our dialogue with management.

UK corporate governance best practice is used as our starting point given the well-established principles and practices that define accepted corporate behaviour and shareholder protections.

However, we recognise and respect differing practice across international markets. Ultimately, every proposal will be evaluated on its merits, based on circumstances relevant to each individual company. High-level principles underlie our voting policy, but company-specific factors will always be considered.

Guidance on the principles that companies should follow in determining remuneration policies is set out in Remuneration Guidelines for UK Investee Companies.

Visit our Interactive proxy voting dashboard for a breakdown of how we have voted recently.

Alternatively, explore our Voting History.