What most concerns investors? What do investors expect of corporate directors? How do investors view the current quality of corporate disclosures? We asked investors about these issues, and the message received is clear: Investors want to know more about the risks that companies have identified, and how they are managing them. And investors are looking for more information.
Investors are looking at risks differently than in the past. The financial crisis that affected capital markets across the globe demonstrated that companies–and even whole economies–can be rocked to their core when the connections between lending practices, securitization programs, and capital and funding levels are not clearly understood and monitored.
Investors today are expecting that those who manage the businesses that rely on their capital will exercise greater care over this expanded concept of "risk." Of course, investors also seek steady returns, so risks cannot be eliminated. But this is when disclosure–information that provides necessary nourishment to an efficient market–becomes so important.
Methodology and demographics: This survey was conducted among institutional investors in the summer of 2013. The investors who participated in our survey represent over $2 trillion in assets under management. Forty percent of respondents were government pension funds and about 17% were investment or asset managers; the remaining represent a variety of other types of organizations. The large representation among government pension plans must be considered in interpreting the results. Government pension plans may manage their asset internally, but most use registered investment advisors to manage at least a portion of their US equity. Government pension plans also tend to be more engaged in corporate governance and proxy voting matters than some other types of investment organizations.
Source: PwC's 2013 Investor Survey, September 2013