Page 30 - DIY Investor Magazine Issue 24
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                   an enormous missed opportunity if companies did not use this crisis to reset their relationship with wider societyBoards have to explain how they have taken employees, suppliers, customers, the environment, the communities in which they operate and society in general into account in the decisions they have made. If ever there has been a catalyst to kick-start this re- thinking, it is the Covid-19 crisis.
We have seen numerous examples of companies working much harder to support their customers and employees through this crisis, alongside their suppliers and communities. Management teams have offered pay cuts and abandoned their bonuses.
But companies are aware that if they participate in Government schemes to help them, through business rate holidays or contributing to furloughed workers pay, the Government will feel a right to influence future decisions – on dividends or executive pay, most
obviously – as a quid pro quo for support now.
Some companies shun Government help for this reason, but this misses the bigger picture.
It would be an enormous missed opportunity if companies did not use this crisis to reset their relationship with wider society. Public mistrust of business is sky high. Embracing the spirit of the new Code’s emphasis on treating all stakeholders fairly is the only way in which confidence in corporate behaviour and integrity can be rebuilt.
Lower leverage, lower returns on equity, lower dividends. Lower executive remuneration.
But a more stable economy, a less crisis-prone equity market and a more equitable society, working better together for our mutual benefit.
Bring it on.
Past performance is not a guide to future performance and may not be repeated. Investment involves risk. The performance data does not take account of the commissions and costs incurred on the issue and redemption of shares. The value of investments and the income from them may go down as well as up and investors may not get back any of the amount originally invested. Because of this, an investor is not certain to make a profit on an investment and may lose money. Exchange rate changes may cause the value of overseas investments to rise or fall.
This communication is issued by Merian Global Investors (UK) Limited (“Merian Global Investors”), Millennium Bridge House, 2 Lambeth Hill, London, United Kingdom, EC4P 4WR. Merian Global Investors is registered in England and Wales (number: 02949554) and is authorised and regulated by the Financial Conduct Authority (FRN: 171847). This communication is for information purposes only. Nothing in this communication constitutes financial, professional or investment advice or a personal recommendation. This communication should not be construed as a solicitation or an offer to buy or sell any securities or related financial instruments in any jurisdiction. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein, nor is it intended to be a complete statement or summary of the securities, markets or developments referred to in the document. Any opinions expressed in this document are subject to change without notice and may differ or be contrary to opinions expressed by other business areas or companies within the same group as Merian Global Investors as a result of using different assumptions and criteria. In Hong Kong this communication is issued by Merian Global Investors (Asia Pacific) Limited. Merian Global Investors (Asia Pacific) Limited is licensed to carry out Type 1 and Type 4 regulated activities in Hong Kong. This communication has not been reviewed by the Securities and Futures Commission in Hong Kong. In Singapore this document is issued by Merian Global Investors (Singapore) Pte Limited, which is not licensed or regulated by the Monetary Authority of Singapore (“MAS”) in Singapore. Merian Global Investors (Singapore) Pte Limited is affiliated with Merian Global Investors. Merian Global Investors is not licensed or regulated by the MAS. This document has not been reviewed by the MAS. In Switzerland this communication is issued by Merian Global Investors (Schweiz) GmbH, Schützengasse 4, 8001 Zürich, Switzerland. MGI 04/20/0015
First appeared in Financial News on 13 April 2020
DIY Investor Magazine | Apr 2020 30

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