Vanguard Q&A: Empowering shareholders

Global head of investment stewardship John Galloway says enhanced disclosure promotes better governance practices

What does good governance look like?

Firstly, good governance starts with a company’s board of directors. An effective board should be independent and reflect both diversity of skill, experience, and opinion and diversity of personal characteristics – such as gender, race, and ethnicity.

Secondly, boards should have oversight of a company’s strategy and effective governance of material risks, including environmental and social risks.

Third, executive remuneration should be linked to long-term performance and should incentivise a company’s outperformance of its peers.

Finally, we look for shareholder rights that empower shareholders to use their voice and their vote to ensure the accountability of a company’s board.

Read the full Q&A in ESG Clarity’s November 2021 digital magazine.

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Natalie Kenway

Natalie is global head of ESG insight for ESG Clarity and has been an investment journalist for 16 years. She won Editor of the Year at the Aviva Investors Sustainability Media Awards 2021, and was Winner...