ICGN Summer Conference: Investor Perspectives

The ICGN conference in Amsterdam convened global institutional investors, asset owners, regulators and advisers. The themes below reflect the investor expectations most relevant to boards and management teams as they shape governance and investor engagement.

1. Director accountability is now the primary lever for investors

Investors increasingly hold individual directors accountable for governance and remuneration issues, instead of simply voting against relevant resolutions (e.g. Say on Pay). Opposition is being directed primarily at chairs of boards and committees, and can span a wide range of issues, from board independence and remuneration all the way to AI and geopolitical risk oversight. This means that directors are expected to deep dive much more into the organization: not just relying on information received, but get on the shop floor to verify it.

Implication for issuers: expect investor dissent to escalate to director votes. Ensure chairs can clearly evidence their oversight, and treat low director support as a strong signal requiring a credible response.

2. Emerging markets are leapfrogging developed ones and seek best practice

Several emerging markets (particularly in Asia) were praised for moving quickly towards best-in-class governance, and regulatory action was considered a key driver of change, as exemplified by Japan. The consistent message was a shift from simple governance compliance and (lots of) disclosure toward governance effectiveness and genuinely insightful information. Investors also want disclosure convergence and protection for shareholder rights, which would give them confidence to invest in new markets.

Implication for issuers: focus reporting on decision-useful insight and demonstrable board effectiveness, not volume of data, and align with recognised global disclosure standards.

3. US–Europe regulatory divergence is widening

Investors highlighted a growing split: the US is seen as rolling back shareholder rights (shareholder proposal exclusions, reincorporation outside of Delaware affecting shareholder protections, and uncertainty over disclosure rules), while Europe continues to add regulation (e.g. SRD III). This fragmentation raises competitiveness questions, mostly for Europe. On the other hand, some investors signalled that there is value in protecting shareholder rights as these safeguard the credibility of capital markets, and that strong governance is fully compatible with strong growth.

Implication for issuers: despite the opportunity for less regulatory and governance constraints, particularly in the US, investors continue to value shareholder rights and clear regulation, and may penalize companies that do not safeguard them.

4. AI governance: closing the gap between expertise and effectiveness

Adoption of AI is outpacing oversight, with investors noting that companies are deploying AI much faster than they are building clear frameworks to oversee it. A key distinction was raised between having AI expertise on the board and integrating it effectively into board proceedings, which highlights the risk of boards appointing token AI experts, but not fully benefitting from their expertise. Investors are engaging meaningfully on how AI is used, its cost, and how it is overseen, and indicated that AI could become a voting topic where controversies arise, or when accountability is unclear.

Implication for issuers: disclose AI oversight frameworks clearly, explain how AI risk is monitored through existing risk management tools, and show effective accountability of the board on AI utilization across the firm.

5. Executive pay should be simpler and performance-linked

Investors view many compensation schemes as overly complex, sometimes by design, and want pay built around a very small number of core metrics of value creation. Complexity was repeatedly linked to weaker trust, and pay issues were often seen as symptoms of deeper governance problems such as suboptimal succession planning. Transparent, simple, and clearly explained pay structures drew the strongest support. Pay competitiveness was another key topic, with arguments in favour of more competitive remuneration, particularly for non-executives. 

Implication for issuers: simplify pay narratives, anchor incentives to clear value drivers, and use proactive engagement to build trust ahead of votes.