Hermes Champion strives to help investors advice influence
It is the successor to Hermes, the BT pension fund manager, Alastair Ross Goobey that rely on corporate responsibility on the agenda of British investors 25 years ago.
Eight years ago, after two years as head of corporate governance at Hermes Mr. Melvin has extended its influence through the creation of Hermes Equity Ownership Services, to other pension funds with similar views are most provide substantial beneficial owners of companies.
Melvin, the team has grown from five to 26, with 13 nationalities and speak 17 languages. It offers a real firepower means comprise four Danes, Dutch five, two in Canada and two Australians, with Shell, BBC, BAE Systems, RBS and pension Lothian.
On the wave of shareholder activism a year ago in the UK, Mr. Melvin said: "Much of the so-called Spring of shareholders, the phrase had been made a little ridiculous, but it was not increased agree (at meetings), there was a concentration of interest in certain situations related to underperforming executives tend. "
This was, however, shareholders design leads to increased sensitivity in companies better and bonus incentives.
One of the great achievements of Mr. Melvin was to gather 44 presidents of major companies pay commissions in a private forum, accept the "four principles" should underpin the plans for the future. "The position of the interested owner is very different from the position of the dealer actions whose primary purpose is to speak to the leaders to come to a better trading decisions."
He said the reason for the current report by Professor John Kay to encourage long-term investment in the UK, as the code before the administration, "missed an opportunity, and missed the point," despite brilliant analysis.
"The mistake was to see fund managers as a business - it's understandable, because fund managers to make decisions, but who are the real owners if you really want to change the industry, to better get the approximation of the interests of reducing administrative costs money? what you need to do is a point of pension funds and to empower them to make this work. "
The Hermes team has over 450 "commitments" one year with the economy at the highest level. Mr. Melvin said: "Our largest companies here and around the world are actually without a master, because the interests underlying the beneficial owner is not adequately represented on the boards of these companies."
Edinburgh born and bred, Mr. Melvin holds degrees in history from Aberdeen and Cambridge. He qualified as an investment analyst and fund manager training, qualification and two ladder company.
He worked at Standard Life Corporate Governance Officer Guy Jubb, then moved to Baillie Gifford, to determine governance structures responsible investment.
But what investors believe money gVirt_NP_NN_NNPS __ <__ pension, and there is no value to the polls, the people "want their money is invested ethically" but yet do nothing about it?
Melvin told what specifically about "corruption, weapons, mining companies, risk management in the extractive industry, the remuneration of senior executives."
He adds: "Companies that will improve their governance more transparent, more responsible about to open and will tend to give better returns."
A forthcoming study from the University of St Andrews with the Hermes data should show that social interventions and environmental governance (ESG) on behalf of the long-term owners to improve the performance of the business.
More than 1,000 of the largest companies in the world and fund managers are registered with the Principles for Responsible Investment, the United Nations, but Melvin said it "stages," the integration of ESG criteria in decision making even the Holy Grail.
He said consumer Unilever is a sign of the times. "They are a company that sees sustainability as part of how they take money in the long run, and they start, what to do on the business side and think about their pension funds. Companies, the good policies of sustainable development, or face sustainability challenges into account their investment by pension funds in the context of these challenges, and start acting like good entrepreneurs brought. "
Although managers seek with ESG strategies at the individual companies, pension fund managers select administrators, Melvin said. "You decide who to go to space assets with managers and where.
"There are long-term issues that are of great importance for pension funds and not usually made by the fund managers. Industry is interested in short-term business and enjoy it, there is a lot of information to support the behavior and the suspicion that the pension fund themselves often do not benefit from this transaction behavior. "
However, defined benefit plans are pension funds administrators more resources than the stewards of defined contribution plans, so that the movement further and inevitable DB to DC on the market is not very useful to the order of the day ESG. "There is problematic," Mr. Melvin admits, pointing to Australia and the Netherlands, where the trustees are working in groups, who have more weight. "In Britain, suppressed the DC model all risk and liability of savers and the trustee is a little less involved in looking after their interests."
He returned to BP in 2010. "If you were a big holders of BP shares have lost a lot of money, but if you want something done about it in terms of risk management? For a trustee or a pension fund, quite difficult, but by pooling resources and work together, they can achieve more, is individual. This is a great opportunity. "