Best market practices and regulatory developments push towards an increasing commitment of institutional investors towards the companies in which they invest, in order to effectively monitor risks, including those related to non-financial factors, and protect investments in the long term.
The primary objective of the so-called Shareholder Rights Directive II of 2017, implemented in Italy with Legislative Decree n. 49/2019, is to encourage greater and more transparent dialogue between investors and issuers. The new regulations require institutional investors, i.e. pension funds and insurance companies, to adopt engagement policies that define the ways in which they monitor investee companies, also with regards to governance social and environmental issues, exercise voting rights, collaborate with other shareholders and manage actual and potential conflicts of interest in relation to their commitment in investee companies.
Frontis Governance provides investors with its experience in complying with all the requirements of Shareholder Rights Directive II, through the definition and implementation of tailor-made Engagement and Voting Policies, based on the specific characteristics and needs of each investor:
Specialized training for internal structures and the Board of Directors on active shareholding issues;
Drafting of the Engagement and Voting Policy based on each investors’ profile and needs, identifying the most suitable internal procedures to monitor non-financial risks, dialogue with invested companies and exercise voting rights;
Definition of Voting Guidelines in line with best market practices and the specific principles adopted by the institutional investor;
Support in the definition and implementation of individual and collective engagement campaigns;
Analysis of General Meeting resolutions based on the voting guidelines adopted by the institutional investor (customized recommendations) and support in exercising voting rights in Italy and abroad;
Building and maintenance of databases on analysis, engagement and voting activities carried out by the investor, and support for periodic reporting.