Looking From The Outside In: Investors & Performance- evolution or regression?
23 March 2011
In light of recent and proposed changes, it seems sensible to ask whether institutional investors have re-appraised their views on corporate performance and shifted their focus to a need for greater transparency and a longer term view of performance.
Following his highly successful PARC presentation in 2008, Bob Cowell returned to PARC to talk about how institutional investors are now appraising companies and how organisations can respond to, or attempt to influence these views.
Drawing on Makinson Cowell’s work with over 50 leading European companies, Bob again shared some thought-provoking and challenging insights and some specific perspectives on the link between executive rewards and performance, including:
- Summary of the investment process and exploration of the “key players”: What has happened to hedge funds, private equity groups and the sovereign wealth funds? Have they changed their way of working? How are they realising returns in this new world where debt is no longer available? Are the investor groups becoming more or less conservative in their decision-making?
Description of the accepted measures of organisation performance highlighting both the quantitative and qualitative: Is the use of TSR still as widespread? Are the investors still as open-minded about the application of other measures? What are their views on the role of the rating agencies going forward?
Observations and issues surrounding the role of the RemCo, the quality of the leadership team, and the use of reward consultants.
Finally, given the unusual challenges and turbulence which many organisations continue to face, there was also an opportunity to hear Bob’s perspective on what the next 12 to 18 months might bring.
The post meeting notes from this meeting are now available for members to download here and are also being sent under separate cover.