Mark your calendars. The 2014 Remuneration and Governance Forums for board directors and institutional investors are scheduled for the afternoon of 12 March in Sydney and the morning of 18 March in Perth.

Guerdon Associates sponsors these Forums with proxy adviser CGI Glass Lewis. Initiated eight years ago, the Forums provided Australia’s first annual forum for directors and their companies’ institutional investors to openly discuss remuneration and governance issues. The Chatham House Rule applies. This allows for a frank exchange of views and constructive debate about what constitutes good remuneration governance.

Regular attendees at the Forum will have already noted a change in focus. In the past they exclusively focused on executive and director remuneration and shareholder voting on these matters. No longer. Investor focus is broadening, while board consideration of other governance matters has become more sophisticated. Accompanying these trends have been regulator and other stakeholder guideline changes in regard to board skills, evaluation and renewal, board diversity and director independence.

Environmental, social and governance (ESG) ratings have been correlated with shareholder returns over the full investment cycle. As a result, they now feature more prominently in investor modeling and valuation. Pension fund shareholder activism in governance matters has probably matched the growth of hedge funds betting on governance change. Compared to 5 years ago, there is more variability in director vote outcomes. And the two strikes law is being utilised by investors as leverage for governance changes that have nothing to do with any remuneration excesses it was designed to constrain. Proxy advisers have been responding to these needs. Our own firm’s board evaluation and governance practice has grown strongly in tandem with our clients’ more nuanced needs and increased attention to governance matters.

While the programs are still subject to finalization, the Sydney Forum will consider two main issues:

1. Proxy adviser reliance on analysts’ forecasts in assessing incentive targets and companies’ needs to motivate and focus executives; and

2. How new disclosure requirements on board skill matrices will figure in more assertive investor director election voting.

The Perth Forum will focus on issues close to mining and energy industries.

Both Forums will consider CGI Glass Lewis’ voting recommendations and rationale, and remuneration vote outcomes during the proxy 2013 season.

In addition to board directors and institutional investors, we also invite company executives, government regulators and companies’ in house remuneration advisers. However, to ensure open discussion, news media are excluded. Note that this does not prevent any attendee making a statement to the media after the event, providing the Chatham House Rule is maintained. See HERE for the Chatham House Rule.

Formal invitations will be sent in late January. However, if you want to receive an invitation, please advise us at info@www.guerdonassociates.com. 

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