ECGS Engagement Model
The engagement cycle starts right after the proxy season and ends just before the new proxy season. This enables our clients to have a continuous dialogue with the issuers.
The cycle consists of 5 steps:
- Set the agenda
The first step starts right after the proxy season. We will organize a round-table session with our clients. In this session we will discuss the highlights of the proxy season, recent trends and developments. Based on these insights and the results of the previous engagement cycle, one or two key topics will be selected for the coming engagement cycle.
This will be done in close collaboration with our clients.
- Research & analysis
These selected topics will be further investigated during the summer. We start with an overall survey of the issuers in our universe to get a clear ‘market overview’. Next, we will go into more detail and benchmark each issuer to identify good and bad practices. Based on this ranking we can identify the best and worst performers.
After the presentation of the results to our clients we will make a short list of company visits, whereby we initially focus on the worst performers added with a selected number of best-in-class issuers. Based on this list ECGS will plan the meetings with the issuers.
- Dialogue with the issuers
Right after the summer, we will have actual engagement meetings with the issuers that are on the formerly created list. Each meeting with an issuer consists of three parts.
The first part is the preparation phase. ECGS will make a presentation for each issuer including the general market overview and the benchmark results for each company followed by a number of recommendations for improvement. On an individual basis we can include some key issues from the most recent proxy season. Once the presentation is completed, we will have a conference call with our clients to discuss the results and upcoming meeting in order to set the final agenda.
The second part is the actual meeting, preferably a face-to-face meeting, to discuss the results and recommendations. The ECGS delegation consists of an Engagement Coordinator, a Research Analyst and a Country Expert. On request, a number of client representatives can join this delegation.
The third part consists of a debrief. Each visit or meeting is followed by detailed minutes, which will be shared with all clients.
- Review & input for proxy season
At the end of each engagement cycle we make a summary report and present an overall picture of the engage-ment meetings. As from the second year ECGS will start monitoring previous year’s engagement topics to track year-on-year changes.
Based on the results we can identify key issues for coming proxy season. Suppose that an issuer has insufficient disclosure in its executive remuneration paragraph, than we will include this issue in our voting recommendation. This example can also be used for other topics that are frequently listed on the AGM agenda.
- Proxy season
The final step, step 5, is the proxy season in which we will use the results of the previous engagement cycle(s). The voting analyses and new trends and developments in among others legislation and market practice will be the basis for the new engagement cycle.