Rask - CEO Rachel Waterhouse on the importance of advocacy
The conversation covers various aspects of corporate governance and the role of the Australian Shareholders' Association (ASA). Rachel, a guest on the podcast, shares her experiences and insights into the ASA's advocacy for retail investors, emphasizing the importance of corporate governance and education. She discusses the ASA's efforts in Parliament to oppose certain superannuation reforms and highlights the significance of retail investors having a voice in corporate governance through proxies. Rachel also shares personal anecdotes about her investment mistakes and the lessons learned, emphasizing the importance of early and informed investing. The discussion touches on the impact of passive investing on corporate governance and the potential for technology and AI to enhance the ASA's monitoring capabilities. Rachel also talks about the importance of purpose-led leadership and the ASA's future focus on expanding access to CEOs and chairs for retail shareholders.
Key Points:
- ASA advocates for retail investors, focusing on corporate governance and education.
- Rachel emphasizes learning from investment mistakes and the importance of early investing.
- The ASA opposes taxing unrealized gains and advocates for retail investors in Parliament.
- Passive investing impacts corporate governance; ASA seeks to enhance retail investor voice.
- ASA plans to use AI for better company monitoring and expand access to corporate leaders.
Details:
1. 🔍 Welcome & Podcast Introduction
- The podcast provides only general financial information and is not tailored to individual circumstances.
- Listeners are advised to consult with their financial planners for personalized advice.
- A financial services guide is available for more detailed information.
- It is important for listeners to understand the limitations of the podcast content and seek professional guidance when needed.
2. 💬 Icebreaker Questions & Personal Insights
- Michael Kemp is identified as the best finance presenter due to his ability to break down investing myths in an engaging manner; he is an ASA education partner and a notable conference speaker.
- An unsuccessful investment in a pharmaceutical company highlighted the importance of knowing when to walk away; the speaker learned this through a conversation with a member, leading to a strategic reallocation of funds.
- The speaker emphasizes teaching children to invest in companies based on passion and understanding of numbers, encouraging a balance of enthusiasm and analytical skills.
3. 📚 Family Influence & Investment Lessons
- Parents, both teachers, instilled a strong passion for learning and the importance of savings, primarily investing in their home over stocks.
- Family dinners often included discussions on news topics, sparking an early interest in understanding and analyzing current events.
- Parents encouraged critical evaluation of news from multiple perspectives, promoting a habit of scrutinizing investment opportunities similarly.
- The influence of family discussions led to developing a keen interest in how global events impact financial markets, fostering a strategic approach to investing.
4. 🚀 Career Path & ASA Leadership
- The speaker transitioned from financial services to associations, working with AICD and the Governance Institute, and pursued every available course to enhance skills in associations and governance.
- Obtained the CEO role at ASA, despite never having held a CEO position before, illustrating a strategic career move and proactive skill development.
- ASA represents investors at AGMs, provides education, and advocacy, focusing on governance and investor support.
- The speaker has been with ASA for three and a half years, indicating a period of strategic leadership and potential organizational change.
- ASA has existed for over 60 years, emphasizing its long-standing influence in governance and investment communities.
- During the speaker's tenure, ASA focused on expanding educational programs and enhancing investor engagement strategies.
5. ⚖️ ASA's Advocacy & Role in 2024
- ASA is focused on helping retail investors by advocating for them and providing training opportunities.
- ASA is actively exploring ways to enhance its services in response to evolving investment processes.
- Recently, ASA engaged in advocacy against superannuation reform that involves taxing unrealized gains, which they believe is unfavorable for investors.
- ASA's advocacy efforts include representing member concerns and attempting to influence legislation related to investment and superannuation.
- The organization hopes to prevent the passage of the said legislation in 2024 and aims to continue its advocacy efforts into the next year.
- ASA plans to expand its training programs to better equip retail investors with the necessary skills and knowledge.
- The organization is strategizing to adapt its services to meet the changing landscape of investment processes, ensuring continued relevance and support for its members.
6. 🗳 Empowering Shareholders & Proxy Voting
- ASA annually sets policy priorities based on member surveys, ensuring focus on relevant retail shareholder issues.
- Feedback from members is actively solicited throughout the year to identify advocacy priorities.
- There is a need to balance retail shareholders' desire for investment opportunities with regulatory protection requirements.
- ASA offers a standing proxy option that allows shareholders to delegate their voting power, enhancing ASA's influence in shareholder meetings.
- Australia's 7.7 million retail shareholders can strengthen their impact through effective proxy voting facilitated by ASA.
- To delegate voting, shareholders can complete a registry form or use an online portal, simplifying the process.
7. 📈 Passive Investing & Governance Impact
- The rapid growth of passive investing, notably via ETFs, affects corporate governance because individual investors in these funds do not directly participate in voting on company matters.
- There is a pressing need for ETFs to enable investors to express their views and influence governance, especially as passive funds continue to attract significant capital.
- Without direct voting rights, investors might find a disconnect between their interests and company decisions, which is increasingly problematic with the expansion of passive investing.
- Advocates like Tobias Carlisle emphasize the importance of enhancing investor involvement in governance, even when engaging through passive investment vehicles.
8. 🛠 Volunteer Opportunities & Community Involvement
- The organization benefits significantly from approximately 200 volunteers, enhancing its capability and profile.
- Technological integration, particularly AI, is being explored to improve efficiency in company monitoring and allow for a broader scope.
- There is a focus on increasing direct engagement with CEOs and chairs through events like ASA Engage, expanding beyond Sydney and Melbourne to include places like Queensland.
- AI is intended to assist rather than replace human monitors, facilitating more efficient discussions and analysis.
- Volunteer roles are diverse, allowing individuals to engage without the pressure of public speaking, through report writing or monitoring tasks.
- Volunteering offers personal development opportunities by learning more about investing and participating in AGMs, even for those approaching retirement.
- Programs are in place to buddy new volunteers with experienced monitors to ease them into roles.
- Volunteers can monitor companies they do not own, providing flexibility and broader engagement options.
- Volunteering can enhance exposure to company management for individuals already interested in specific companies.
9. 🌟 Purpose-Driven Leadership & Team Dynamics
9.1. Strategic Vision in Purpose-Driven Leadership
9.2. Operational Tasks and Team Dynamics
10. ⏳ Investing Advice & Final Reflections
- A staff survey indicates high engagement with mission and purpose, reflecting a strong organizational culture focused on collective success and collaboration. This culture can influence investment decisions by fostering a mindset oriented towards long-term success and collective benefits.
- There is an emphasis on starting to invest early to leverage the benefits of compounding; advice includes starting investments in your 20s to maximize the potential for growth over a 45-year period until retirement.
- Investment strategies should prioritize long-term benefits over short-term desires, such as luxury goods, to achieve substantial life goals. This approach aligns with the organizational culture of prioritizing collective success and long-term outcomes.
- Compounding is highlighted as a critical factor in building wealth, serving as a reminder of the importance of time in investment growth. This principle is akin to the cumulative positive effects seen in strong organizational cultures over time.