UK: Anthony Bolton on engagement with boards

In a recent article in the Financial Times newspaper, Anthony Bolton - probably the most well known fund manager of his generation - wrote on engagement with companies. His article provides many interesting insights, including:

Part of being an involved and responsible shareholder is, as well as voting our shares, to be prepared to give feedback to management – on matters such as board composition, remuneration or strategy. When we have definite views, we are happy to share them, either directly with management or indirectly through their investment bank. However, there are times when we are prepared to engage with a company’s management to achieve a course of action that we have instigated. Engagement is not something to be embarked on lightly, as it takes time and resources to do it successfully and responsibly. It needs the right people to lead it and these are not necessarily fund managers themselves. Nearly always when we engage with a company on a particular matter, we first check to see if other large shareholders have similar views – we rarely engage without wider support. If one or two indicate that they are sympathetic to our views, this will add weight to our dialogue with the company. Our conversations are conducted confidentially as we have found that this is more productive for everyone. Reasons for engagement nearly always revolve around two key topics: board composition and strategy.