Stewardship Code

Slater Investments Limited’s approach to its responsibility as an Institutional Shareholder

Slater Investments Limited (SIL) is a strong supporter of the principles that are set out in the UK Stewardship Code published by the Financial Reporting Council in July 2010, and updated in September 2012.

We believe that the Code is designed to promote better dialogue between shareholders and company boards. It ensures that the businesses are set to create long-term shareholder value.

SIL fully complies with the principles of the UK Stewardship Code as set out below:

Principle 1 – Policy on how we discharge our stewardship responsibilities

SIL’s investment process specifies that we invest in companies that are well managed with high standards of corporate governance and a sound management team. After investment it is SIL’s policy to engage actively with the management of investee companies to monitor their performance, strategy, risk, governance, culture and remuneration to ensure that they meet our standards. We focus on those companies where we have a significant shareholding as we believe it is here that we can add most value, however we meet at least once with the management of each company that we invest in. We are committed to act always in the best interest of our clients and we expect the same from the management of the companies we invest in.

The investment management team make decisions for voting on our clients’ shares using either voting platform “Proxy Edge” or by giving clear voting instructions to custodians. SIL undertake our own analysis of resolutions being considered at AGMs and other shareholder meetings. We vote at every shareholder meeting, regardless of the size of our investment. It is SIL’s policy to vote FOR or AGAINST resolutions and to keep abstentions to a minimum. In doing so we take into consideration actions of investee companies with respect to the UK corporate governance code.

SIL reports on each of its engagements to its clients either in writing or in formal meetings. We also publish a quarterly voting summary on our website, which can be found in the footer below.

Should you wish to contact us regarding the stewardship please get in touch with Slater Investments’ Operations department via email: or call on +44 (0) 20 7220 9460.

Principle 2 – Policy on how we manage conflicts of interests

Slater Investments is largely owned by its team, aligning our interests with those of the clients of our firm, and has specific policies with regards to conflicts of interest as outlined on the website.

SIL takes its fiduciary duties to clients very seriously, and we apply a consistent and transparent approach to the management of conflicts of interest.

It is SIL’s policy to avoid conflicts of interest wherever possible. In the event that a conflict arises it will be disclosed to our clients in most cases and a course of action will be agreed with the client.

Identified conflicts are managed on a case by case basis by the Risk and Compliance Committee which includes CEO and COO as well as the compliance department staff. The identified conflict will be discussed and a final engagement and voting decision will be made ensuring that they serve the interests of SIL client’s as a whole.

Where clients’ interests vary across investments and differing portfolio management styles, the investment guidelines and restrictions will be given due consideration with the objective of treating customers fairly being at the centre of any consideration and ultimate allocation decision. Similarly where a conflict arises with regards to voting between SIL and a client, a decision will be made on the basis of protecting the best interests of the client, using the principles of Treating Customers Fairly.
Situations where conflicts of interest could arise:

Situations where conflicts of interest could arise:

  • the interests of SIL conflicts with those of a client;
  • the interests of one SIL’s client conflict with those of another client of SIL;
  • when SIL has obtained restricted information relating to a client, a potential client, a former client or to publicly traded securities which would be of value to another part of SIL or to other clients of SIL;
  • the interests of any employee or director of SIL conflicts with the interests of a client of SIL or the interests of SIL itself.

Conflicts of interest form part of the inductions process and we undertake ad hoc Compliance internal communications to ensure all employees are aware of and understand their conflicts of interest responsibilities.

We also undertake an annual review of the conflicts register, where potential conflicts are discussed with each employee.

A copy of Slater Investments’s full Conflicts of Interest Policy is available here.

Principle 3 – How we monitor our investee companies

The Investment Team monitors the share price of investee companies on daily basis. In addition the Team monitors all market announcements including daily market news, Annual Reports, other circulars and general meeting resolutions. The team’s research methodology focuses mainly on the following areas: price momentum, value and long-term growth and positive newsflow. The result of this monitoring process is brought to the attention of the Investment Committee allowing discussion of corporate governance issues. Prior to investing in a new company, the Investment Team meets with management of the company. Additionally, following Company results, the Team meets with management or the Investor Relations department of larger companies and more often if necessary.

The decision as to whether we should become insiders is taken on a case by case basis. The point of contact would be the fund manager or senior analyst responsible for the research on that given stock.  We have to have a clear idea of when we will be released from being insiders and when the information will be made public.

We maintain a register of all inside information and decide who and when received the inside information.

Principle 4 – Our guidelines on how and when we would escalate our stewardship activities

The Risk and Compliance Committee monitors the corporate governance of investee companies.

The Committee determines whether or not action needs to be taken:

  • If the company’s strategy has changed
  • If the company’s strategy is not working
  • Remuneration and corporate structure

Annual and interim accounts are analysed by the Investment Team and any points of concern are brought to the attention of the Fund Manager and/or the Risk and Compliance Committee.

Meetings are scheduled with the management of investee companies at least twice a year following preliminary and interim announcements. Should there be any areas of concern we would schedule further meetings with the company and the company’s advisors. If we believe that company’s strategy has changed or is not working and it will negatively affect the company’s long-term investment potential, the Fund Manager will usually sell the holding from their portfolios.

In exceptional circumstances, where disposing of the security is not in the best interest of our clients we are prepared to intervene.

There are a number of factors that would be taken into account when considering intervention, for instance:

  • current strategy of the firm
  • circumstances in which the issue has arisen
  • best practice standards and the regulation
  • the reasoning and explanations provided by the company client’s portfolio strategies

The form of intervention will be determined on a case by case basis and it may include:

  • increased frequency of meetings with the company’s management team
  • discussions with the company’s corporate advisers
  • meetings with chairman or senior non-executive director
  • proposing solutions to the issue or as a last resort proposing changes to the board members
  • voting against board proposals at the annual general meetings
  • requisitioning an emergency general meeting and seeking support from other shareholders
  • making public statements should we believe that it is necessary to protect interest and value for our clients.

We believe that public intervention is a last resort and we prefer to resolve the matter privately with the company rather than publicly.

Principle 5 – Our willingness to act collectively with other investors

SIL’s primary duty to its clients is to act in their best financial interests. We protect our clients’ interests by effectively monitoring companies, meeting with management and having a proactive approach to voting. SIL is currently a member of UN PRI. SIL will engage and collaborate with other institutional investors if it believes that this will lead to a more positive outcome.

In deciding whether or not to act collectively with other investors, we take into account a range of factors. For instance:

  • whether or not collective engagement is likely to be more effective than independent involvement
  • what our holding in a given security is
  • the extent to which the objectives of the other investors are aligned with our own
  • SIL’s conflict of interest policy as well as regulatory requirements, such as market abuse and insider dealing

SIL may consider joining collaboration with other investors in the following circumstances: issues with company leadership, concern over company’s strategy, apprehension over remuneration policy, concerns over decisions relating to acquisitions, during times of significant corporate or economic stress. The above examples do not form a comprehensive list but a broad framework.

Should you wish to contact us regarding collective engagement please email the Operations Department (

Principle 6 – Our policy on voting and disclosing voting activity

Generally, SIL has a policy to vote by proxy at all general and extraordinary meetings of companies where it is invested. Where the matter is particularly contentious, SIL’s representative may be present. It does not delegate voting to any third party.

The matters to be voted on are assessed internally for each meeting. There may be times when SIL will vote against resolutions.

SIL will usually vote in favour of company management except in cases where it feels that a company is not acting in the best interests of its shareholders. In these cases, SIL will vote against resolutions.

SIL does not support Director’s service contracts longer than one year. Non-Executive Directors’ service contracts should be terminated with no more than one month’s notice.

SIL will only offer support to Non-Executive Directors (NEDs) who hold a maximum of three NED positions. In the case of a NED holding an Executive level position, the maximum reduces to two. SIL will vote against any resolution to appoint a Non-Executive Directors who holds a number of positions above this maximum.”

SIL encourages executive remuneration policies that align directors’ and shareholders’ interests. We pay particular attention to schemes that create excessive equity dilution.

Remuneration reporting has run wild and needs to be hacked back to its essentials. A shorter report will be more easily understood, more transparent and will hopefully leave less scope for multiple, overlapping schemes. Therefore SIL will vote against remuneration reports which are longer than two pages.

SIL will vote against any new scheme involving nil cost options.

SIL reserve the right to vote against unresponsive members of remuneration committees being re-elected to the board.

SIL pays particular attention to acquisitions and disposals. We are prepared to vote against value destructive acquisitions or disposals if necessary.

SIL does not support the funding of political parties or organisations.

SIL as a rule votes against the disapplication of pre-emptive rights, however we are prepared to support it should we can see a logical reason for it.

There are times when engagement with management fails and at this stage it would normally be SIL’s policy to sell the investment. However SIL is prepared to intervene actively by changing management either through the Chairman or the Senior Non-Executive Director or as a last resort by calling an EGM. The latter is likely to happen only in extreme cases. See Principle 4 for more details.

We disclose our quarterly voting summary on our website, which can easily be found in the Footer. Additionally, our clients’ quarterly reports include a list of every resolution and how we have voted.

Currently no stock lending is undertaken, which means that all shares are available for voting.

We do not have specific policies for informing companies in advance of our voting intentions but will do so if we feel this is the best action to undertake.

Principle 7 – How we report on stewardship and voting activities

SIL reports on quarterly basis on voting and engagement activity. We publish a summary of quarterly voting on our website, which can easily be found in the Footer.  We also report to our clients on every resolution that we have voted on. We would also include a note in the quarterly client report should SIL engage in an intervention.

We keep a record of each resolution and how we have voted. We also record reasons behind voting against our general guidelines. How we vote is audited internally and assessed in a report signed off by the board to ensure that we are voting in accordance with our voting policies. If we vote against our policy we always document the reason why.

We don’t currently seek independent assurance on our application of Principles 1, 2, 4, 6 and 7 and related guidance of the UK Stewardship Code as we don’t consider it necessary, the existing reporting system is satisfactory to our clients.  However, SIL has an assurance report on internal controls from the auditors which is available on request.