The Future Fund has made two hires which should dramatically increase its ability to encourage good corporate governance.
The $58 billion fund has appointed Gordon Hagart to lead its approach to environmental, social and governance risk management, while Rebecca Farrell will develop and implement a proxy voting policy for the Fund, which will see it bring its exercise of voting rights in Australia in-house.
Hagart will focus on influencing Future Fund investee companies to appropriately manage their environmental, social and governance (ESG) risks to protect shareholder value. He will also work with the broader investment team to identify relevant investment opportunities, particularly on environmental grounds. Hagart will start in October, reporting to general manager Paul Costello with a ‘dotted line’ to chief investment officer David Neal.
Hagart joins the Future Fund from consultancy onValues, a Switzerland-based firm that combines traditional investment analysis with knowledge of environmental, social and governance drivers. His career history includes the role of programme manager with the United Nations Environment Programme Finance Initiative (UNEP FI), where his responsibilities included the United Nations Principles for Responsible Investment, a fact which yesterday prompted some observers to speculate the Future Fund may soon become a signatory.
Meanwhile, Rebecca Farrell’s efforts to develop and implement a proxy voting policy for the Future Fund commence immediately. Farrell was most recently a partner corporate governance with Clarendon Lawyers, was previously a senior associate with Freehills in its corporate governance advisory team and has also worked as a transactional lawyer in Melbourne and New York.
“She has advised corporations and boards on shareholder rights, remuneration, accounting and corporate disclosure, board composition and structures, directors’ duties and capital management initiatives,” a spokesperson said.
The Future Fund has to date left proxy voting up to its funds managers (except for its Telstra shares), after first ensuring each manager’s governance outlook aligned with its own. Farrell will help in-source the voting decisions on Australian holdings, but the spokesperson said any Future Fund decision on hiring an external proxy voting advisor for offshore holdings was some way down the track.
Meanwhile, the Future Fund began searching yesterday for three new staff, two of them reporting to investment operations manager Campbell McCulloch.
One role will be responsible for mandate compliance across the Fund’s public and private market investments (over five years experience required, preferably some offshore), while another will be a performance analyst responsible for the accuracy of the portfolio performance and information delivery between the Fund, its custodian Northern Trust, and all external third party investment managers.