Engagement Process
GO’s approach to the companies with which it engages is to establish constructive and supportive working relationships with the management teams and boards. In conducting a engagement, GO concentrates on board-level issues because of the direct accountability of the board to share-holders. GO is very clear that shareholders cannot and must not try to run the company themselves.The purpose of the engagement is to ensure that the board accepts that the company’s performance could be improved and that it takes steps to remedy whatever is holding the business back. The GO team includes experienced business professionals from a broad range of disciplines who bring that expertise to the engagement.This helps keep discussions focussed on business issues and performance.
Engagements take time. Accordingly, GO does not expect investee companies to instigate short-term, cosmetic changes that increase the share price at the expense of the ability to generate returns in the long-term. Indeed, GO’s clients are institutional long-term equity investors who would not support such an approach. GO expects its engagements to result in fundamental change that helps companies create value into the future.
Throughout the engagement process, GO aims to be supportive, providing input to the board and management as requested and when we believe it might be helpful, or when implementation of the change programme seems to have stalled.
GO makes a considerable effort to communicate with other shareholders in a company. As a minority shareholder itself, GO needs the support of other shareholders, as well as the board, to act as a catalyst for change. Such communication helps GO better understand the perspective of other investors and ensures that they properly understand GO’s proposals and intentions. In our experience, press coverage seldom advances an engagement. Accordingly, GO prefers to keep discussions with companies (and other shareholders) private.