African Investor Relations

The UK Investor Relations Society recently released a new code of conduct for institutional investors (pensions, insurance companies and investment trusts) to enhance the quality of dialogue between institutional investors and issuers.This code was developed by the organizations representing institutional holders and is meant to improve shareholder returns, corporate governance, and reduce risk. The seven principles:

1. Institutional investors should publicly disclose their policy on how they will discharge their stewardship responsibilities
2. Institutional investors should have a robust policy on managing conflicts of interest in relation to stewardship and this policy should be publicly disclosed
3. Institutional investors should monitor their investee companies
4. Institutional investors should establish clear guidelines on when and how they will escalate their activities as a method of protecting and enhancing shareholder value
5. Institutional investors should be willing to act collectively with other investors where appropriate
6. Institutional investors should have a clear policy on voting and disclosure of voting activity
7. Institutional investors should report periodically on their stewardship and voting activities

Any insights from institutional investors in Africa on whether they are guided by similar Africa-wide principles or only international principles would be appreciated.

The Investor Relations Society represents members working for public companies to develop effective two way communication with the markets and create a level playing field for all investors. It has nearly 600 members drawn both from the UK and overseas, including the majority of the FTSE 100 and much of the FTSE 250.

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