BOARD ALERT: THE T. ROWE PRICE PHILOSOPHY ON ENGAGEMENT & ACTIVISM

The rules of engagement between issuers and institutional investors are evolving rapidly. Familiarizing oneself with the engagement philosophies of major investors has become an important ingredient to effective board communication with shareholders. “Inside America’s Boardrooms” takes a look at one investor with a particularly interesting organizational structure, one that empowers the portfolio manager and takes an integrated approach to investment and proxy-voting decisions.

In this episode of Boardroom Resources’ webshow, regular guest host Doug Chia, Executive Director of The Conference Board Governance Center, sits down with William Ultan, Managing Director of Corporate Governance for Morrow Sodali, to dissect various aspects of T. Rowe Price’s Investment Philosophy on Shareholder Activism. As Chia explains, the T. Rowe Price philosophy addresses the criticism that many asset managers are siloed with little collaboration between investment and proxy-voting decision makers.

“For directors, I think it’s extremely important to appreciate that not all institutional investors are the same, whether you’re talking about passive or active," said William Ultan. "For most institutions, you have parallel paths from a communication standpoint: you have the investment-personnel path (portfolio managers & analysts) and then you have the governance path. But for some, and perhaps for an increasing number of institutions, those paths do intersect, and T. Rowe is a good example of that."

In this episode, Chia and Ultan also discuss T. Rowe Price’s unique approach to activist campaigns, where the investors insist on meeting with both sides before making a voting decision in a formal proxy contest.