Governance issues

The PRI works with investors to address governance issues affecting the companies they invest in, such as tax avoidance, executive pay and corruption. To hear more about our governance issues work, contact us.

Tax avoidance

Why and how to engage on corporate tax responsibility cover

Why and how to engage on corporate tax responsibility

The business case for responsible investors to explore the long-term implications of tax-related risks is multifaceted.

Aggressive tax planning: noticing the signs

Before engaging with companies on their tax practices, investors need to develop a good understanding of the main strategies that can be used by companies to reduce tax payments.

Assessing the risk of profit shifting

How to engage companies on tax-related topics: identifying red flags in your portfolio

A good indicator of potential earnings risk is the difference between the effective tax rate on a company’s income statement and the weighted average of statutory rates based on the firm’s geographic sales mix8. Although the mismatch may be explained by factors unrelated to tax minimisation, such as tax credits, ...

How to engage companies on tax-related topics: questions for management and the board

The list of questions proposed in this section can be used to research the company’s tax profile based on current financial or sustainability reporting.

Engaging on corporate tax responsibility: what's next?

Investors should be asking companies for better disclosure on their tax practices, to further understand if and how companies and their boards identify and respond to taxrelated risks, and government and other stakeholders’ expectations.

Executive pay

Integrating ESG issues into executive pay

How to integrate ESG issues into executive pay

Executive pay remains at the forefront of corporate governance discussions for the investment community.

Integrating ESG issues into executive pay: what's next?

The company dialogue and research highlights that the integration of ESG issues into executive pay is in its infancy and there is considerable scope for investor engagement to improve practice and disclosure across all sectors.

Companies disclosing links between ESG issues and pay

Data from extractives and utilities sector research

The research analysis below summarises the practices of 84 extractive and utility companies included in major stock indices in North America, Europe, and Australia.

ESG issues and executive pay: insights from company dialogue

The investor-company dialogue and research uncovered key additional insights to the recommendations of the 2012 guidance:

ESG issues and executive pay: 2012 investor recommendations

The following tips come from the 2012 project:

Director nominations

Engaging on director nominations

Engaging on director nominations

Director nominations and elections represent some of the most fundamental ownership rights for shareholders – namely the right to appoint and remove members of a company board to represent their interests in promoting long-term value creation.

Companies engaged and company responses during engagement

Director nominations engagement background

After consulting with signatories and acknowledging the critical importance of the nominations process to longterm investor returns, the PRI coordinated a collaborative engagement on the issue.

Proxy access for eligible shareholder nominations of director candidates

Results from US engagement on director nominations

The 13 US companies investors selected for engagement in 2014 ranked in the lower 50% of all S&P100 company performance on nominations processes when assessed against indicators included in the commissioned research.

Companies with combined chair and CEO roles

Results from French engagement on director nominations

As with the US, investors chose to engage with 11 French companies ranked in the lower 50% of all CAC40 company performance based on their nominations process.

Recommendations for engagement on director nominations

As a result of the analysis presented in this report, investors are encouraged to continue discussions with their investee companies on director nominations.


A guide for investors

Engaging on anti-bribery and corruption

The cost of bribery and corruption is immense

Quantitative results of engagement

Achievements of anti-bribery and corruption collaborative engagement

Given the increasing importance of the issue, a group of PRI investors participated in a coordinated engagement on antibribery and corruption between 2013 and 2015.

Control Risks survey of current anti-bribery and corruption measures

Successfully engaging on anti-bribery and corruption: before engagement

Setting clear targets and expectations is very important, as well as recognising when (and when not) to push companies regarding sensitive areas.

Companies that failed to win contracts in circumstances where the competitor may have paid a bribe

Successfully engaging on anti-bribery and corruption: during engagement

Investors found that the results generated from benchmarking companies’ disclosure, as well as working in collaboration with other investors, was helpful in securing meetings and initiative the dialogue with selected companies.