IIML Section 172 statement
Under section 414 of the UK 2006 Companies Act (the “Act”), the Company is required to include a section 172 statement, describing how the directors have had due regard to those matters set out in section 172 of the Act during the period in question. In addressing these matters, we would like to expand on the following:
Our Mission Statement
Insight's mission is to offer investors a different approach to achieving their investment goals; one that prioritises the certainty of meeting their chosen objectives in contrast to the traditional focus on maximising return and minimising volatility. We believe that our emphasis on certainty, a dimension largely neglected by the industry, provides investors with an improved investment experience, resulting in a more secure retirement or more confidence in their ability to acquire specific assets in the future. Furthermore, we tailor portfolios directly to clients' desired outcome rather than investing in generic products that benefit the manager more than the investor, further enhancing the chances of success.
We are committed to prioritising our clients' interests above all else in the conduct of our business and to delivering high quality investment solutions and service. Our business model rests on a simple equation: high quality leads to client advocacy which translates into business success. We, therefore, focus our efforts on delivering quality and are always prepared to forego business opportunities that conflict or weaken our ability to do so.
Focusing only on what we are good at rather than being everything for everyone is a key requirement for achieving that, so is working in partnership with our clients and their advisors. This allows us to better understand their needs and provide them with the tools and professional education they need for their investment journey. We also pledge to engage with relevant official and regulatory bodies to represent their interest and help find solutions that balance their benefits with those of society at large.
Aligning all stakeholders' interests is essential for the long-term success of any organisation. We align the interests of our clients and shareholders by taking a long-term view of the success of the business, allowing us to focus our energies on delivering to our clients. A significant portion of our staff's compensation is deferred and held in company shares. By giving our employees an economic stake in the business we help align their interest with those of the other stakeholders.
As responsible stewards of society’s savings, we also view the communities in which we operate as stakeholders in our business. As such, we seek an alignment that goes well beyond regulatory requirements. Focusing on environmental, social, and governance factors (ESG) forms part of that alignment. ESG factors have been embedded in our investment processes for a very long time and in our business practices for the last few years.
None of this would be possible without the ability to attract and motivate the right employees. We do not believe that any gender, race, or group of any kind has a monopoly on the talent that we need to succeed. We also believe that diverse groups make more informed and balanced decisions. We are therefore committed to looking for talent everywhere and ensuring that every individual has the opportunity and support to succeed at Insight.
We strive to create an ego free and collaborative environment where everyone is held accountable, but success is shared collectively. An environment where employees can speak up to share their views or challenge others’ views. We encourage continuous improvement at the individual level as well as the business level and make it a point to learn from our mistakes. Much of this boils down to putting the principle of "doing the right thing" at the heart of all our decisions.
The examples provided below show positive outcomes following consideration by the Insight Board of matters set out in section 172 of the Act during 2021.
Business relationships with key stakeholders
Insight considers clients to be the most important stakeholder and we prioritise client interests at all times. In an environment where the needs of clients are rapidly evolving, Insight aims to achieve a deep understanding of clients’ needs and considers client engagement as a key element of promoting the long-term success of the Company. As part of its duty to promote the success of the business, the Board continually monitors the overall investment performance of the business.
The Company continues to receive a range of industry recognitions from the Greenwich Associates following feedbacks from investors and consultants alike on matters such as services and investment quality. The global communications firm, Edelman, also listed Insight as the number one brand in institutional investment management in its recently published 2021 Asset Management Brand Index.
These acknowledgements show that Insight continues to remain relevant to investors and consultants and they also demonstrate that the firm manages the expectations of clients, one of its key stakeholder group, consistently. The Board is kept informed of these achievements and continue to constructively challenge the business to maintain high client advocacy.
Another critical stakeholder is, of course, Insight’s employees. New joiners continue to receive induction training which provides an opportunity to meet the CEO and the Head of Human Resources. This introduction typically takes place shortly after joining Insight and gives new joiners the opportunity to review how Insight does things as well as make suggestions on how things could be improved.
Insight is a strong believer in employee development. The Company delivers a range of training programmes designed to encourage employee and manager development at all levels. The aim is to design an environment that provides the opportunity for employees to hone their skills and expertise and develop within the business.
There are a clear set of values embedded within Insight’s culture. These include:
- Client Focus: The Company aims to provide an environment for employees that encourages and promotes a culture of innovation, collaboration, diversity and inclusion. These we believe will be of material benefit for clients in the long run.
- Accountability: We foster a strong culture of ownership, providing our staff autonomy and trust from the start, allowing them to make their own decisions that impact our business.
- Teamwork: We create a culture of camaraderie and trust within the business. We focus on getting the right people with the right expertise and combining them in diverse teams to work together and deliver results.
- Cognitive Agility: Staff are encouraged to be inquisitive by nature, skilled in analysing information, forming an opinion as well as taking the initiative to act.
- Continuous Improvement: We maintain a questioning attitude and are not afraid to speak up and challenge conventional thinking or the status quo.
As well as the cultural environment, focus is also placed on the physical environment of staff. To this end, Insight had taken the opportunity during the midst of the pandemic to redesign its office spaces so as to create a more collaborative and inclusive environment to help re-enforce key values such as teamwork and collaboration. The renovation also included wide-spread availability of height adjustable desks in an effort to further improve productivity and staff wellbeing.
With regards to staff engagement, Insight conducts a comprehensive employee engagement survey bi-annually. The most recent engagement was done in Q4 2021 where 83% of staff took the time to provide their feedback against 6 broad engagement categories relating to Strategy, Leadership & Trust; Company Culture; Management Quality; Inclusion & Voice; Wellbeing and Career Development. The survey results showed that:
- 80% of employees are highly engaged at Insight, with 82% agreeing or strongly agreeing that they are proud to work for the Company.
- 85% of colleagues agree or strongly agree that Insight sets high standards for performance.
- 85% of colleagues also agree or strongly agree that their managers create an environment where they can comfortably share concerns or issues.
While there remain areas where the Company would like to improve on (for example around career development and diversity), overall engagement remains strong and aligned with other high performing UK companies. The results from the survey will be shared with the Insight Board so that the Board’s views and recommendations can be taken into account when deciding next steps.
Diversity, Equity & Inclusion (DEI)
The Board recognises that diversity of thought, talent and experience is critical to the long-term success of the business, industry and society.
In 2021 a DEI Committee was established to drive the Company’s diversity and inclusion strategy. Insight is in the process of extending its DEI initiatives to meet ambitious targets around gender balance. The Company is also seeking to ensure that the demographics of the regions in which it operates are mirrored in local offices.
All employees have access to and are encouraged to participate in employee resource groups mobilised around shared characteristics, interests or experiences. Recruitment partners are also challenged to produce balanced shortlists to address the issue of underrepresented groups.
Insight is a member of the Diversity Project and also undertake a number of initiatives aimed to enhance diversity and inclusion. The Board is kept informed of the Company’s efforts in addressing DEI issues and is keen to monitor Insight’s progress in this key area of business.
Impact on the Community and Environment
Insight has a Corporate Social and Responsibility programme which focuses on three key pillars:
- Our markets: We seek to protect clients’ interests and operate our business with integrity and resilience.
- Our people: We seek to encourage effective leadership, wellbeing, diversity and inclusion for our staff.
- Our world: We seek to invest and act responsibly to protect the wider world and to support the communities that we operate in.
Insight is also committed to contributing to a sustainable world where people succeed and economies thrive. We do this by constantly assessing the interests of the universe of the Company’s existing and potential stakeholders and contemplating how bests their interests can be managed.
A transformation of our Queen Victoria Street office has been underway throughout 2021 and at every stage of the rebuild, the environmental impact has been high on the agenda. The Leadership in Energy and Environmental Design (LEED) standard has been used to help evaluate the building’s energy efficiency levels.
High Standards of Business Conduct
Insight has an unwavering commitment to stewardship
We believe effective stewardship includes taking clients’ needs into account and working for the benefit of all stakeholders. Given Insight’s business focus on risk management (LDI) and Fixed Income, for clients with very long-term investment horizons, our activity looks different when compared to the activity of many of our peers, which focus largely on equities. We aim for transparency across all our activities and collaborate with stakeholders where we believe we can maximise the impact of our engagement.
The Insight Responsibility Oversight Committee (IROC)
IROC is the key internal group with oversight and accountability for all ESG related activities and engagement within Insight, including, but not necessarily limited to, global responsible investment and corporate sustainability activities, and their application across all business lines and investment activities. The purpose of IROC is to set the strategic priorities and apply appropriate oversight to ensure that responsible investment and CSR performances align with Insight’s organisational objectives. IROC’s focus includes oversight and accountability for climate strategy and policy, as well as overseeing investment and operational activities. Additionally, IROC oversees a range of sub-governance groups focused on different aspects of our commitment to responsible investment on behalf of our clients. IROC and its sub-governance groups are focused on achieving the best outcomes for clients and other stakeholder groups.
Regulatory Bodies & Suppliers
The Directors recognise that as part of the objective to promote the long-term success of the business, maintaining a high standard of business conduct when dealing with stakeholders such as regulatory bodies and vendors is vital. Insight’s interactions with these stakeholders throughout 2021 are set out below.
Insight regularly collaborates with regulators and other market participants in order to contribute to fair, transparent and robust markets. The Board believes that effective communications with bodies such as the Financial Conduct Authority (FCA), the Bank of England as well as the UK Treasury helps to deepen the understanding of systemic risks. This, in turn, allows the Company to take appropriate actions to address such risks in meaningful ways.
Examples of issues that Insight has engaged on during the period include the impact of the pandemic, LIBOR transition, Climate Change, Operational Resilience as well as a range of other pertinent issues. In terms of our ambition to promote well-functioning markets, we believe our engagement on these issues has led to notable change and had clear, measurable impacts. The Company welcomes ongoing collaboration with regulatory bodies such as the FCA in order to contribute to an effective and resilient market environment. Local offices across the globe are also expected to maintain meaningful discussions with local regulators and trade bodies. This helps to observe best practices and get a fuller understanding of what is expected from stakeholders that come in the form of regulators and trade bodies.
The Company supports industry initiatives and seek to develop relationships that allow for a platform to be established where the views and interests of clients can be heard and understood, especially during proposed reforms.
Service providers enable Insight to be an effective steward of its clients’ investments. Insight has a formal Global Outsourcing and Vendor Management Policy which outlines the procedures regarding third-party management with the objective of having a consistent risk-based approach in line with BNY Mellon’s Third-Party Governance framework.
Insight’s Global Outsourcing and Vendor Management Policy captures ESG criteria and operates within BNY Mellon’s Supplier Code of Conduct. It describes the Company’s commitments regarding issues such as social responsibility, health and safety, human rights, ethics and responsible business practices. Existing vendors that do not meet the required standards are investigated by the Company’s designated forum and could eventually be replaced. Insight also has procedures and processes in place to monitor the performance of suppliers over time and the Company expects suppliers to have good governance and controls in place to combat risks such as cyber-attacks.
The Vendor Management Steering Committee is the key committee for third-party governance. The Committee meets at least 10 times per year and voting members include members of the EMC. Insight also maintains clear communication channels with its critical vendors so that issues can be identified and resolved as quickly as possible.
During the period the Board considered and agreed to the transition of four business units from Insight’s ultimate parent entity, BNY Mellon. The acquirer of the business units was Insight North America LLC (“INA”) – a recognised sister entity within the BNY Mellon group that endorses the Insight brand and shares the same management as Insight’s European business. The units transitioned into INA included Taxable Fixed Income, Municipal Bonds, Efficient Beta and Stable Value. Transitioning the four business units was deemed to be in line with key business strategies to grow Insight’s global presence and to enhance the Company’s capability in finding financial solutions in an ever-changing environment. The Board considered the expectations of key stakeholders in making this decision. Such stakeholders included, but were not limited to, Insight’s existing clients, new clients from the Mellon units, new and existing employees, regulators as well as suppliers.
Emphasis from the board during the decision-making process included Insight’s ability to meet the expectations from these stakeholders and effectively manage their respective interests. To date, INA continues to make good progress with regards to the integration of the four Mellon units and experiences favourable client retention rates, while feedback from consultants also remain positive.
Acting fairly between members of the company in a Shareholder relationship
Insight is a wholly owned subsidiary within the BNY Mellon group governed by its Board. The Company maintains an open relationship with BNY Mellon, where ideas and strategic objectives are exchanged and shared, ensuring the Board members remain aligned with the strategic objectives and corporate values of its shareholder whenever appropriate. Across all decisions, the Insight Board is fully committed at the same time to ensuring due regard to the interest of other stakeholders as described above.