City Hive’s Stewardship Council has set a target of 50 signatories to the Action, Challenge and Transparency (ACT) Framework by the end of the year.
Currently, 17 firms are signatories of the ACT standard of corporate culture.
City Hive launched the ACT standard of corporate culture in May 2022, aiming to provide professional investors with a framework to assess, measure and be a catalyst for change.
The Stewardship Council consists of 25 fund gatekeepers from across the industry who jointly oversee £2trn in assets.
At an event in London marking the second anniversary of the ACT framework’s launch, City Hive co-CEO Bev Shah (pictured) described the ACT Standard as a “symbol of trust”.
“It is an assurance to the consumer that the values of the organisation managing their investments are aligned with their behaviours. The disclosure framework provides a standardised way for investment companies to understand, create and progress cultural change – and be able to communicate progress effectively via reporting.
“Although it is a voluntary framework and firms are not required to complete it, it supports a firm’s compliance with other mandatory regulatory obligations, specifically under SMRC and Consumer Duty as well as the FCA’s D&I proposals and FCA’s UK ESG rules.
“We are delighted the Stewardship Council is seeing value in the Standard and are pushing for transparency around the issue of corporate culture at their asset management partners. It is with moves like this that the investment industry can build trust with consumers again.”
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Emma Wall, Hargreaves Lansdown head of investment analysis and research – and member of the ACT stewardship council – said: “The ACT Stewardship Council has set a target of 50 signatories to the ACT standard by the end of this year. It is punchy but I don’t think as an industry that is stretching ourselves too far.
“Hargreaves Lansdown has committed to the ACT Alliance – we have skin in the game – and we were the first firm to introduce the ACT Framework into our fund due diligence for all our investment solutions – this includes HLFM funds, the Wealth Shortlist, our model portfolios and Pathways solutions. This shows how we promote good corporate culture where we work and the firms we invest in.
“Companies that become signatories to ACT understand that good corporate culture inspires better decision making and good outcomes. There is a fear around transparency – but being transparent is our pass mark – completion of the ACT Framework is a pass for us and means inclusion into our investment universe.”
Justin Onuekwusi, CIO at St James’s Place and also a member of the ACT stewardship council, added: “From an investment perspective the strength of any research process is the importance you place on the quality and understanding of culture and diversity of thought whether its de-biasing, devil’s advocate, channelling the debate, evidence of groupthink, as well as exploring different backgrounds and life experiences and the motivations of people – this can be a key driver of edge.
“A lot of talk and debate in the industry is around D&I, and while that’s clearly very important, ultimately, culture is the foundation of those inputs.
“One of the things I’ve implemented since I joined SJP is to really get a handle on investment culture – I have set up a culture working group with the idea of thinking about culture, aspirational values and the way things are done, how people behave and make decisions within a company.
“In general, culture is very hard to define but it’s the responsibility of manager researchers to ask these questions. ACT helps to provide a common framework, which is important because otherwise people would be asking questions and thinking about things in a different way. With this, we have a benchmark of questions and thinking around culture specifically for the investment industry.”
This article first appeared on PA Future’s sister site Portfolio Adviser
