Ep 2: Paul Hewitt from Minerva Analytics on active ownership

Welcome to the second episode of the GSI Podcast, which looks at the issue of active ownership. Joining Robin Powell on this episode is Paul Hewitt from Minerva Analytics. Minerva is a Solactive company and is a financial technology firm specialising in proxy voting, and Paul has some very interesting things to say Here are the relevant time codes in case there's a specific issue you would like to hear Paul Hewitt's views on: 1.23 Why is this issue so important to you? And how did you get involved in this work? 1.59 When did you first realise that ordinary investors can actually make a positive difference in the way that companies conduct themselves? 3.14 It’s hard to say whether your personal intervention had any impact, but how did it make you feel to learn that Chesnara’s board had made that change? 4.17 It’s an important principle for Minerva, isn’t it, that every vote counts. Tell us about the company and the services you provide. 6.11 The whole ESG issue is very subjective. We all have our own priorities, whether it’s climate change, social issues or whatever. How does Minerva allow for these differences? 8.08 How comprehensive is the scope of what you cover? Do you focus mainly on environmental sustainability? Or are the S and G in ESG just as important? 9.29 Executive remuneration is a key ESG issue at the moment. I understand that part of Minerva’s philosophy is is that you actually don't mind approving higher remuneration for company executives who are “doing the right thing”. Is that correct? 11.26 The proxy voting sector is growing quite fast in response to the current popularity of sustainable investing. Who are your main competitors? And how do the services you offer at Minerva differ from those of your competitors? 14.15 This is a relatively new sector, but you as a company have been around for quite a long time. Tell me about that and how the landscape has changed since you first came on the scene. 18.50 There's been much discussion about the really big asset managers, like Vanguard and BlackRock, which own massive chunks of publicly listed companies. Why should small asset managers care about proxy voting given that they're likely to be too small to have a huge impact? 17.00 How compatible is active ownership with the systematic investment approach favoured by firms like GSI? 19.53 As a firm you focus on 200 names, or holdings, for each client, rather than try to look at all of them. Why that number? 21.23 How does Minerva come up with proxy voting recommendations? And give an example of a recent recommendation you’ve made. 23.31 The work that you at Minerva do is obviously very data-driven. How can you tell if the data supplied by companies is of good enough quality? 26.08 Thankfully, there's more and more emphasis now on transparency in the asset management industry, and it's something that end investors are increasingly demanding. How do you keep track of voting transparency and reporting? 27.48 How do you see the proxy voting sector developing over the next 30 years, because it is a very fast-changing area, isn’t it? 29.48 What would you say to an institutional investor or a trustee, or the owner of a financial advice business, who is trying to choose a suitable ESG asset manager? Why is it important to choose one that has a proxy voting solution like Minerva? +++ Music used: Inspired by Kevin MacLeod Link: https://incompetech.filmmusic.io/song/3918-inspired License: https://filmmusic.io/standard-license