In the aftermath of the 2007-8 Global Financial Crisis, fingers were pointed at banks and regulators, but also at shareholders – why did investors not do more to challenge weak governance structures and excessive risk-taking? The crisis promoted many investors revisit their approach to stewardship, which helped further build momentum around investor engagement. Emboldened, they sought to play a key role afterwards by holding financial institutions to account and pressing for long-lasting improvements in governance and culture.
During 2007-8, we conducted in-depth engagement with over 20 global financial institutions to promote changes in culture and management behaviour. This included RBS, Barclays and HSBC. Meanwhile, the 2008 proxy season saw us actively exercise our voting rights on all bank holdings. We engaged with many of the UK, European and US banks most deeply involved in the crisis before the vote to explain our expectations and opposed poor governance practices where appropriate. We also supported all resolutions calling for a “say on pay” at the large US banks.