Institutional_investors_step_up_corporate_engagement (PDF - 49KB)
Melbourne, 5 June 2007: Vanguard Investments Australia Ltd (Vanguard) today welcomed the incorporation of a specialist governance research and engagement service provider, Regnan.
Regnan is an industry collaboration between eight major institutional investors and a leading university. Vanguard is a founding member of this collaboration.
The formation of Regnan will enable leading institutional investors to focus on reducing investment and business risk by engaging with ASX-listed companies to help guide and improve governance practices to enhance long-term shareholder value.
Regnan's governance engagement activities will be based on the proven engagement model and resources of the BT Governance Advisory Service.
Regnan will commence operations with a $50 billion engagement mandate, representing approximately one in eight institutional dollars invested in Australian listed companies.
Each of Regnan's eight founding owners will have a representative director on the board.
Founding owners include Australian Reward Investment Alliance (ARIA), Hermes Equity Ownership Services Limited, HESTA, Local Government Superannuation Scheme (LGSS), Vanguard Investments Australia Ltd, VicSuper, Victorian Funds Management Corporation and BT Financial Group.
Erik Mather has been appointed Managing Director of Regnan. He will be joined by the existing BT Governance Advisory Service team with support from Monash Sustainability Enterprises, which will provide research services. BT have supported this transition and retain a stake in the independent Regnan.
Kathryn Watt, Vanguard's General Counsel and Company Secretary who will be Vanguard's representative director on the Regnan board, said Vanguard was pleased to participate in a company focused on best practice shareholder advocacy.
"With Australia's superannuation industry recently topping $1 trillion, corporate engagement with Australia's listed companies has become more important than ever. We take seriously our fiduciary responsibility as owners of Australian companies. We are pleased to be in the esteemed company of some of the country's largest institutional investors," Ms Watt said.
"At Vanguard we are committed to best practice investment management and we look forward to playing an active engagement role in improving the corporate governance practices of the Australian companies our funds invest in."
Regnan has commenced operations and Vanguard has awarded the company a three year constructive engagement mandate.
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About BT GAS
BT Financial Group's Governance Advisory Service (GAS) was created to provide corporate governance risk management services to institutional clients. BT GAS was established in 2001 following a mandate from the Commonwealth Public Sector Superannuation Schemes (PSS/ CSS), now ARIA. The primary function of the service is to proactively and constructively engage with S&P/ASX 200 companies on behalf of institutional investors.
About Regnan
Regnan is an independent entity owned by the founding shareowners, each of which will be represented on Regnan's board.
The boards of the following entities have agreed to participate:
- Australian Reward Investment Alliance (ARIA);
- Hermes Equity Ownership Services Limited;
- HESTA Australia;
- Local Government Superannuation Scheme (LGSS);
- Vanguard Investments Australia Ltd;
- VicSuper;
- Victorian Funds Management Corporation; and
- BT Financial Group
Confirmed subscribers to the service include: - Catholic Superannuation Scheme;
- Emergency Services Superannuation Fund; and
- Northern Territory Government Public Authorities Superannuation Scheme.
About the name Regnan
Regnan is based on a latin word regare whose origins are interpreted as to move [something] in a straight line, to direct or to rule. This closely reflects Regnan's business purpose; to align the conduct of companies with the long term financial interests of their owners such as Vanguard.
