Institutional investors to adopt more responsible attitude to investing in shares
The Bank of Russia has developed the Code of Responsible Investment (the Code) for banks, insurers, management companies, non-governmental pension funds, and other institutional investors working with equity instruments. The regulator recommends that they adhere to a number of principles that will help them increase the return on investment not only through effective management of the securities portfolio but also due to active interaction with issuers.
Currently, institutional investors are insufficiently involved in the corporate governance of joint-stock companies. The Code instructs that they interact with issuers more actively to improve the companies’ long-term development prospects – in particular to help them increase their shareholder value. When investing, institutional investors should pay attention primarily to the companies that have adopted the strategy for increasing the shareholder value. If this document does not exist, investors can exercise their corporate rights to encourage issuers to develop it.
The companies adhering to the Code should publicly report on the implementation of these principles on an annual basis.
Compliance with the principles of the Code will help develop the equity capital market and increase the capitalisation of the Russian stock market.