Association members are committed to promoting responsible best practice within their organisations, with their clients and with their investments. The association works to develop, promote and implement appropriate behavioural codes.
Governance of the Investment Management Industry Participants
The relevant guidelines are included in the MiFID II Directive, with additional codes of practice provided within the CBI’s CP 86 (Management Oversight within Fund Management Companies) and CP 120 (Corporate Governance Requirements for Investment Firms and Market Operators).
Shareholder Rights and Stewardship Codes
The Shareholder Rights Directive is moving through the EU approval process and is due to be implemented in June 2019. IAIM, through the consultation process, has been involved in shaping this legislation to make it is useful, practicable and user friendly.
The Association is in the process of formulating a Stewardship Code and, in recognition of international best practice, we will give due cognisance to the Code recently issued by efama (European Fund and Asset Management Association).
Governance of Investee Companies
Institutional investors have an obligation, on behalf of their clients, to monitor the corporate governance arrangements of those companies in whose securities clients are invested.
Ireland follows best international practice by requiring Irish listed companies to apply the Corporate Governance Code (the ‘Code’). Institutional investors are obliged to raise governance concerns with the boards of listed companies. Where their concerns have not been satisfactorily addressed investors may collectively act to raise concerns of a governance nature. IAIM provides that forum for investors in Irish listed companies.
In practice, Irish listed companies will usually consult with IAIM where changes to governance practices are being proposed, particularly where remuneration is concerned. However, the Code as we know it needs to be reviewed and revised (the last review was carried out in 2010).
We are currently in a review process and in recognition of international best practice, we will give due cognisance to the Code recently issued by the FRC (Financial Reporting Council) in the UK. This Code deals with Board Leadership and Company Purpose, Division of Responsibilities, Composition, Succession and Evaluation, Audit, Risk and Internal Control and Remuneration.
Promoting Sustainable Investment
The investment management industry has significant expertise in sustainable investment and green finance and is leading the initiative with Sustainable Nation in creating an internationally renowned centre of excellence in Ireland for sustainable investment. The emphasis will be on a) decarbonising the economy b) promoting investment into clean/green infrastructure and c) promoting good ESG (Environmental, Social and Governance) behaviour of investee companies within portfolios.
The Association is in the process of formulating policies and procedures in relation to the ESG behaviours of investee companies. We hope to improve the understanding and implementation of sustainable investment principles with industry participants and investee companies.
The EU has proposed a Directive on Sustainable Investment. This initiative has largely been industry led and IAIM will be directly involved in shaping this legislation.