As a signatory-based organisation, we encourage signatories to participate actively in all areas of PRI governance, and there are regular opportunities for all categories of signatory to do so. Signatory rights and the delegation of authority from signatories to the Board attracted significant feedback during the recent governance review consultation. The Articles aim to balance real delegation from signatories to the Board and its fiduciary role, with accountability and effective mechanisms for signatories to escalate critical issues and influence the strategic direction of the PRI. There are multiple mechanisms to encourage structured a dialogue between signatories and the Board at regular intervals to ensure the Board remains accountable to signatories and decision-making remains transparent.
Signatories have the following rights, as outlined in the Articles:
- Rights to approve amendments to the Articles and Principles: The Articles and the Principles may only be amended in accordance with the Act and the approval of a simple majority of the signatories voting on the amendment, including a simple majority of Asset Owner signatories voting on the amendment in an electronic poll.
- Rights to nominate candidates for the elections and elect the PRI Board Directors: Putting forward candidates for election and voting for your preferred candidate is an important signatory right and responsibility. Signatories can put forward eligible candidates for annual, mid-term or extraordinary elections. Asset owners signatories vote for asset owner candidates, investment manager signatories vote for investment manager candidates and professional service provider signatories vote for professional service provider candidates. For more information on the elections see the Election Rules and the 2015 Board election page (to follow).
- Right to confirm the appointment of the Chair: The Directors nominate the independent Chair, but before taking office the appointment and term of office must be confirmed by the approval of a simple majority of signatories, including a simple majority of Asset Owner signatories voting in an electronic poll.
- Right to receive the annual accounts: The PRI must present to signatories at each Signatory General Meeting (SGM) the Company’s latest annual accounts, any required accompanying reports and the auditor’s report. Signatories will have the opportunity to receive the reports and accounts by an electronic poll.
- Right to confirm the appointment of the auditor: When the PRI is required by the UK Companies Act to appoint an auditor the PRI must seek the prior approval of the signatories.
- Right to approve the minutes of an SGM: Signatories will be asked to approve the SGM minutes by electronic vote.
- Right to Formal Consultation: This right is an important mechanism for signatories to provide input and feedback to the PRI Executive on strategically important matters. There will be a formal consultation before the adoption of a three year strategic plan and making any material changes to: the PRI governance structure, including the rules and policies; the Objects and / or Mission; the Principles; and Signatory fee structure. As part of the formal consultation process the PRI must publish a formal consultation document, allow at least a four-week consultation period and provide multiple channels for signatory feedback.
- Right to call for an extraordinary election of Directors: This is the ultimate ‘nuclear option’ for a signatory base dissatisfied with the Board’s performance. If signatories representing at least three (3) per cent of all the Signatories write to the PRI requiring the Company to hold an Extraordinary Election, then the Directors must arrange an electronic poll of all signatories on a binding proposal to compel an extraordinary election of all elected Board Directors. If passed by signatories voting, according to the Articles, the Directors must then arrange an extraordinary election, according to the timetable set out in the Election Rules.
- Right to propose a non-binding resolution: Signatories representing at least three (3) per cent of a category of Signatories can write to the PRI requiring the Company to put a resolution to the vote of Signatories on any matter (except a matter otherwise expressly requiring Signatories’ approval under the Articles). If the resolution is passed by a simple majority of Signatories voting the Board must report, in writing, to the signatories on its deliberations and responding action(s) on a comply or explain basis.
The annual Signatory General Meeting, usually held to coincide with the PRI in Person is an important forum for dialogue between the PRI Board, Signatories and the Executive. The Board has the responsibility to report annually to signatories on the progress in implementing the three-year strategic plan and the SGM is an opportunity to present in person the progress of the Initiative as well as the decisions that the Board, and its committees, have made over the preceding year. Prior to the SGM signatories will also be given the opportunity to propose agenda items for further discussion at the SGM (see the SGM Rules).
For more information on signatory rights and responsibilities see the Articles of Association of PRI Association.