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Agenda Of A Shareholder Activist
In the wake of recent corporate scandals, large shareholders in the United States and Europe are becoming more vocal about the governance of companies and bringing underperforming ones to task. But intervention is nothing new for Europe's leading shareholder-activist fund: Hermes, which actively seeks to shape the structure and performance of the companies in which it invests. In this interview, David Pitt-Watson, the managing director of Hermes Focus Asset Management, explains how his group engages in constructive dialogue aimed at building value.
The take-away: While many fund managers measure success by their knowledge of when to buy and sell shares, Hermes tries to be a good owner. Throughout the course of its long-term relationships, it engages corporations directly—with a light touch, Pitt-Watson says—on issues such as board composition, renewal, and strategy.
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