PLSA publishes Stewardship and Voting Guidelines for 2024

The Pensions and Lifetime Savings Association (PLSA) has published its Stewardship & Voting Guidelines 2024, which set out the PLSA’s views and voting recommendations on key issues.

Key new issues covered in the 2024 guidelines include:

Cybersecurity – the guidelines note that both the shift to remote working and the geopolitical situation have increased cybersecurity risks and say that companies should reflect this in their policies and procedures. There are voting recommendations for investors where companies make poor disclosures on cybersecurity risks in their annual report or where these risks are not adequately managed;
AI – a new section on AI says that companies should monitor their use of AI and adopt frameworks for its acceptable use. Investors should consider voting against the re-election of a director if there is evidence of “egregious conduct” attributable to them in relation to the development or deployment of AI;
ESG – new guidance has been included on social factors, which are an increasingly important aspect of environmental, social and governance (ESG) issues for investors. The guidelines state that, as there is no universally adopted framework on social factors, investors should only vote against a company on social issues where all other avenues for engagement have been exhausted. Biodiversity is also included in the guidelines as an area where companies should be taking action to monitor and measure their impact; and
Dual class share structures – the PLSA has observed an increase in the use of dual class shares structures. The guidelines state that companies should remove these structures as soon as possible post-IPO and that investors should consider voting against the Governance Committee chair (or equivalent) where companies have these structures without a sunset clause of seven years or less post-IPO.

The guidelines have also been updated to reflect the 2024 UK Corporate Governance Code.

The PLSA has also published a summary of the guidelines and its voting recommendations.

Published 23 February, 2024