ICSA and The Investment Association launch guidance to help firms improve decision making for the benefit of all

London, 26 September 2017 – ICSA: The Governance Institute and The Investment Association have today launched guidance to help company boards ensure they understand and weigh up the interests of their stakeholders when making strategic decisions.

The guidance, which was welcomed by the Government in its recent announcement on corporate governance reform, identifies ten principles to guide the way boards approach these issues. They cover: identifying key stakeholders; the composition of the board and development of directors; the way in which boards receive and process information; designing appropriate engagement mechanisms; and reporting and feedback to shareholders and stakeholders.

Business Minister Margot James said: “We have long been admired as one of the best places in the world to work, invest and do business, and last month’s corporate governance reforms will continue to enhance that reputation.

“A crucial part of those reforms is making sure companies listen to their workers and customers. This new industry-led guidance will help companies to choose how best to ensure those voices are heard in boardrooms up and down the country.

“This is an important piece of work and I would urge companies to draw on this guidance to help ensure their long-term success.”

Chris Cummings, CEO, Investment Association, commented: “Investors want companies to take decisions which will generate the best long-term value to their shareholders. To make such decisions, boards need to hear and take account of the views of their stakeholders. Failure to do so, could impact on the future success of the company.

“The guidance launched today, provides practical steps for UK companies to consider how they ensure their stakeholder voice is represented in the boardroom. It is also outlines how companies report on their stakeholder engagement activities and the impact engagement has had on the board’s decision making.”

Stephen Haddrill, CEO of the Financial Reporting Council said: “Businesses which are successful in the long term support our economy and society by providing employment and contributing to economic growth and prosperity. In doing so, it’s increasingly important that companies’ develop and sustain meaningful relationships with a wider range of stakeholders. This clear and practical guide will be of great help to companies and promote good strategic and governance reporting.”

Simon Osborne, Chief Executive of ICSA: The Governance Institute concluded: “If taken seriously, stakeholder engagement will strengthen the business and promote its long-term success, to the benefit of stakeholders and shareholders alike. Paying lip service to engagement is of limited value to anyone and I would urge the boards of all companies, whether listed or privately owned, to carefully consider the principles laid out in the new guidance.”

The guidance, the ten core principles of which are listed in the below Appendix, is available on the ICSA website at www.icsa.org.uk/stakeholdervoice and on The Investment Association website at www.theinvestmentassociation.org/assets/files/press/2017/2017-09TheStakeholderVoiceinBoardDecisionMaking.pdf

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For further information, please contact:

Maria Brookes, Media Relations Manager, ICSA: The Governance Institute


+44 (0)20 7612 7072

+44 (0)7890 649 143


Linsey White, Head of Media Relations, The Investment Association: Linsey.White@theia.org

T +44 (0)20 7269 4635; M +44 (0)7508 724 022

Helen Ayres, Media Relations Manager, The Investment Association: Helen.Ayres@theia.org

T +44 (0)20 7269 4620; M +44 (0)7508 724 066


Notes to Editors:


  1. ICSA: The Governance Institute is the professional body for governance. We have members in all sectors and are required by our Royal Charter to lead ‘effective governance and efficient administration of commerce, industry and public affairs’. With over 125 years’ experience, we work with regulators and policy makers to champion high standards of governance and provide qualifications, training and guidance.
    Website: www.icsa.org.uk

  2. About the Investment Association:

    The IA champions UK asset management, supporting British savers, investors and businesses.  Our 240 members manage £6.9 trillion of assets and employ 93,500 people across the UK

    Our members manage the pensions of 75% of UK households, provide 60% of capital market financing for UK businesses and fund 40% of initial public offerings of shares.

    Our mission is to make investment better. Better for clients, so they achieve their financial goals. Better for companies, so they get the capital they need to grow. And better for the economy, so everyone prospers.

    Our purpose is to ensure investment managers are in the best possible position to:

    Build people’s resilience to financial adversity
    Help people achieve their financial aspirations
    Enable people to maintain a decent standard of living as they grow older
    Contribute to economic growth through the efficient allocation of capital

    The money our members manage is in a wide variety of investment vehicles including authorised investment funds, pension funds and stocks and shares ISAs.

    The UK is the second largest investment management centre in the world, after the US and manages 37% of all assets managed in Europe.

    Our website includes an area for consumers which explains why it’s important to invest and how you can invest in a fund.

  3. The BEIS response to the corporate governance Green Paper can be found at www.gov.uk/government/consultations/corporate-governance-reform




  1. Boards should identify, and keep under regular review, who they consider their key stakeholders to be and why.
  2. Boards should determine which stakeholders they need to engage with directly, as opposed to relying solely on information from management.
  3. When evaluating their composition and effectiveness, boards should identify what stakeholder expertise is needed in the boardroom and decide whether they have, or would benefit from, directors with directly relevant experience or understanding.  
  4. When recruiting any director, the nomination committee should take the stakeholder perspective into account when deciding on the recruitment process and the selection criteria.
  5. The chairman - supported by the company secretary - should keep under review the adequacy of the training received by all directors on stakeholder-related matters, and the induction received by new directors, particularly those without previous board experience.  
  6. The chairman – supported by the board, management and the company secretary – should determine how best to ensure that the board’s decision-making processes give sufficient consideration to key stakeholders.
  7. Boards should ensure that appropriate engagement with key stakeholders is taking place and that this is kept under regular review.
  8. In designing engagement mechanisms, companies should consider what would be most effective and convenient for the stakeholders, not just the company.
  9. The board should report to its shareholders on how it has taken the impact on key stakeholders into account when making decisions.
  10. The board should provide feedback to those stakeholders with whom it has engaged, which should be tailored to the different stakeholder groups. 

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