ABSTRACT
Investor activism has fast become accepted as a tool for safeguarding, if not improving, investment returns over the longer term. From the perspective of a pension fund that has a diversified portfolio and whose members have a wide range of political and ethical beliefs, engagement is most useful when it meets fundamental principles. Standing in the way of these principles being better known and more widely practised are few challenges. This chapter provides a 'critical perspective' on how the challenges could be overcome. Engagement is, in some ways, a new instrument in the investment management toolkit. The lead for engagement activities in the UK has traditionally come from commercial service providers with a specialist interest in engagement. Activism tends to focus on a sub-set of companies.
