It’s time for UNIVERSAL OWNERSHIP

Given the reality that ESG/senior management time and financial resources are limited, redirect some of energy from “integration” to boost “stewardship” but ensure that the stewardship is genuinely fit for purpose ie it really does address systemic threats/risks in the real world (aka “forceful stewardship”).
 

1. Understand where your staff are (what they care about, what they know, what’s holding back progress). Get professional market research help to do this well. Then educate staff about:
   
   a) What universal ownership means – specifically why it’s important and how it differs from the standard investment paradigm. Use all available tools (eg town hall meetings, AGMs, newsletters, etc) and use methods which build consensus (eg deep canvassing), 
   
   b) Important systemic threats, especially those that are ignored by the financial system and where universal ownership might plausibly be a part of the way forward. Start with the topics for which there is already most concern. Make use of well-informed and challenging experts and acknowledge their value (ie pay them!)
    
2. Engage members in a meaningful way. A professional designed poll is the most basic approach but there are many deliberative democracy options which provide greater benefits, not least deeper understanding of what members think and feel about trade-offs whilst also building real understanding. This translates into legitimacy for the fund’s decisions and resilience for when “events” happen. Vocal stakeholders will always criticise funds and early movers will, paradoxically, often face this most. That’s life! Be prepared.
    
3. Educate staff about the best examples of forceful stewardship (eg the award-winners of the PRI Stewardship 2.0 competition, cutting edge AGM initiatives) inviting external speakers who are informed and independent enough to do “tough love” coaching.
    
4. Decide on the 1-2 systemic threats that your fund most cares about. Research what is being done about it. Chances are there is a coalition already formed which focuses on your issue. Join, so as to both strengthen the coalition and enable you to learn more. 
    
5. Adopt investment beliefs and proxy-voting guidelines in keeping with universal ownership theory. Model language can be found here.
    
6. Engage current and potential investment related service providers (ie fund managers, investment consultants, legal advisers, research providers) to ask what they know/think of universal ownership. Adopt both a hearts & minds and also a contractual approach.

© Dr Raj Thamotheram, LinkedIn
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