Hermes Equity Ownership Services (EOS) offers a comprehensive and unified responsible investment and corporate governance advisory service on a client's equity investments wherever they are managed. As at 30 September 2009 EOS had over £40 billion* of assets under stewardship.
As the executive arm of the BT Pension Scheme, Hermes has over the past decade developed an expertise in responsible investment and corporate governance. This stems from the belief that for a long-term equity investor, it is particularly important to be an active and engaged owner of companies. Put another way, we recognise that equity shareholders and their agents have a role in the stewardship of the companies in which they invest.
Most investment managers focus on relative out-performance. Whilst this is also of interest to Hermes, its unique ownership means that it has the mindset of a pension scheme and thus a focus on achieving superior absolute returns. Our shareholder engagement programmes are one way in which we aim to address the problems of underperforming companies and encourage continuing excellence amongst the best performers. All of our responsible investment activities have as their over-riding aim to deliver better performance, or value, to clients.
The premise underlying EOS is that companies with informed and involved shareholders are more likely to achieve superior long-term performance than those without. Being an involved shareholder is not about micro-managing or meddling in matters rightly the domain of the directors. Nor is it about compliance with a set of rules or box-ticking. Hermes aims always to represent to directors a shareholder's perspective on the company's environmental, social and governance performance and to frame its discussions with companies in terms of long-term Value creation. The stronger and more representative that shareholder voice, the more effective it is likely to be.
*Estimate.
Source: Hermes
The ICSA Hermes Transparency in Governance Awards are new initiative launched by ICSA in partnership with Hermes Equity Ownership Services. Read more
Colin Melvin, CEO of Hermes Equity Ownership Services, is interviewed by EVO TV (Australia). Click here to view the interview (21/04/09).
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