A deepening commitment to responsible business was evident in a call towards the end of May with the CEO of Experian, the world leader in the provision of credit data. Despite the closure of many offices, Experian transitioned well to remote working last year. However, so long as regulations allow, management hope that Experian offices will start to re-open this summer. The CEO noted that many staff had expressed a strong wish to get back to the office. As well as gathering feedback on employee views on a return to the office, the CEO also touched on feedback from more general employee engagement surveys that suggest that management’s approach of putting people first, protecting jobs, supporting people with working-from-home technology and strong communication has paid off. A recent employee share scheme is an example of Experian’s visible commitment to its employees.

This year, all staff below the top 800 managers (some 17,000 employees) were awarded a one-off share award totalling approximately US $700 with a 2:1 matching payment if the individual is still employed in three years’ time. As a company that relies on people to ensure its technology remains world-leading and its service remains market-leading, the CEO was evidently pleased to report how well this had been received, not just from a monetary perspective but from a cultural perspective too.

Companies often talk about strong corporate cultures that in turn support and protect responsible business practices and standards in regard to employees, suppliers and wider stakeholders. Through our conversations over the course of the Covid-19 pandemic we have been able to quiz management on how that culture has been put into practice, and whether previous words around culture have actually borne out in reality, when it has mattered.



During a call with Novartis’ Head of Cardiovascular Medicine during May the social complexities facing pharmaceutical companies was touched on specifically affordability as barrier to effective treatment. In discussion around Novartis’ cholesterol lowering therapy, Leqvio, it was noted that there is now 50 years of evidence that sustained LDL cholesterol reduction improves cardiovascular outcomes.

However, in the real world, consistent LDL lowering is not achieved due to adherence, access, and affordability with out of pocket cost having a notable impact on abandonment. Novartis is working in different ways in a number of countries to address this issue. In the UK, Novartis is part of the Accelerated Access Collaboration that brings together industry, government, regulators, patients, and the NHS to remove barriers and accelerate the introduction of ground-breaking innovations.

It is a unique and highly influential group and in this area is working to improve the likely success of the NHS’ long-term plan to reduce the impact of cardiovascular disease which typically causes a quarter of all deaths is the UK and which represents the single biggest area to potentially save lives. As part of the Accelerated Access Collaboration, Novartis is working with NHS digital and GP software providers to identify “at risk” patients with comprehensive engagement and the imminent launch of an education programme for GPs to improve adherence support.

Reckitt Benckiser


A call with the CFO of Reckitt Benckiser in April provided a reassuring business update, as well as an update on the company’s effort to better define, demonstrate and direct its culture. Reckitt’s current CEO joined the company in 2019, with the CFO joining in April 2020 and for both, culture was seen as a largely untapped strength within the company.

Today, Reckitt’s culture and purpose is articulated across four leadership behaviours: Ownership, Creating/Innovation, Deliver on Progress, and Care. The first three date back to the 1990s with ‘Care’ recently added and intended to focus efforts not only in regard to the environment but in regard to all stakeholders. As stated by the CFO on this call, the focus of the company is, and must be, to drive long-term volume growth through innovative products, where sustainability and respect for all stakeholders is considered at every stage from design to manufacture, to distribution to sales.

Whilst it is easy to talk about such a focus, and much more difficult to evidence such efforts, by incorporating ‘Care’ within its core values and purpose, Reckitt is at the very least making itself accountable and this is certainly a subject we will continue to raise with management, thereby building our own view on the company’s rhetoric, practice and success.



In December 2020, we had a governance-focused call with Cognizant’s Chair, Deputy Counsel, Head of Investor Relations, and the non-executive director who acts as Chair of its Compensation Committee. The conversation centred on Cognizant’s board refreshment programme that began in mid-2019. The programme is not yet considered complete but has already brought three new board members, all of whom are women. These appointments have been made in line with a skills matrix, which matches the company strategy and is regularly updated.

The conversation also turned to remuneration and previous conversations between the Walter Scott team and management about incorporating metrics linked to the company’s digital transition into remuneration plans. The Chairman explained that this had been decided against as it became practically, and by definition, very challenging. It was also felt digital success would be adequately captured in the existing revenue and EPS KPIs. In discussing the unavoidably complex decisions around the best way to reward executives, we put forward the downsides to stock-based and deferred compensation plans, but the Chair was clear that given the competition for talent across the technology industry these plans are an assumed part of any package. He also explained that whilst no remuneration plan is perfect, the Compensation Committee is very clear in its aim to attract and retain talent whilst making decisions based on defined policy and not discretion.

As previously, in this now established annual governance-focused call we appreciated the openness of the conversation and felt assured of the company’s current governance, and its approach to often complex decisions such as compensation. This was also another example of greater access to management this year, with restricted travel freeing diaries for calls. Whilst we would always expect a senior board member to be on this annual call, it was pleasing to have the chance to discuss these issues with two board members and a senior member of the legal team.



As we, along with others across Europe and the US, went into lockdown in spring of 2020, there were alarming reports from apparel manufacturers in Bangladesh regarding cancelled orders and the refusal by some international retailers to take delivery of already manufactured clothing, and thereby a refusal to pay for those items.

We know from past work on retail supply chains, including two research trips to Bangladesh, that these factories operate on very slim margins, and that the low pay of employees supports only subsistence living. We recognised that cutting off any means of income placed those factories, and those workers, in a perilous situation.

We have frequently engaged with Inditex on supply chain standards over a number of years. We have come to understand and appreciate the company’s own efforts to ensure acceptable practices and foster long-term relationships that protect those practices as well as the company’s work within several industry initiatives.

In testing times, commitment to mission statements and best practices is truly tested and so we quickly contacted Inditex so that we could understand the steps that the company had taken, or would take, to minimise the impact of Covid-19 lockdowns on vulnerable factory workers in markets such as Bangladesh. In doing so, we were assured that the company had met all its financial commitments and had continued to support its partner factories, whilst also taking a lead in industry-wide initiatives. Inditex will reap the long-term benefits of having done the right thing at this important juncture.



The CEO and CFO of L’Oréal visited Walter Scott’s offices in early March 2020. Whilst the conversation was unsurprisingly focused on the company’s approach, and actions to date, to the growing Covid-19 crisis as well as the company’s longer-term strategic direction and focus, time was also spent discussing sustainability commitments.

Management was keen to remind us that the Chief Corporate Responsibility Officer, Alexandra Palt had been appointed to the company’s Executive Committee last year. That appointment recognised the importance of the role, a key part of which is to keep up the pressure on L’Oréal’s Executive to meet the extensive sustainability targets set out to 2030.

In discussing those commitments, they are justifiably proud of the fact that L’Oréal is the only company to have achieved Triple A scores under CDP for four years. The company proudly dates its sustainability journey back to 2013, whilst also conceding there is much more to do.

For the team at Walter Scott, engagement takes many forms. We regularly speak to individuals within companies charged with implementing, planning or reporting on aspects of sustainability. These conversations are often very useful in understanding targets and initiatives, as well as challenging these commitments where they seem insufficiently demanding or opaque in terms of a quantifiable result. But, in a far more general sense, the importance attached to these issues by the most senior management is also noteworthy as we judge a company’s commitment to sustainability. Of course, most CEOs and CFOs will have a well-rehearsed script, but meetings such as this one with L’Oréal give us the opportunity to probe those soundbites. Some management teams might have tried to steer the conversation clear of sustainability, but in this case, we were reassured by the time taken, and more importantly the tone and conviction of the discussions.

Engagement for Change

An engagement for change typically involves a series of one-to-one meetings and correspondence where we seek influence with a defined objective. An engagement for change will often relate to sustainability issues and our tailored approach enables us to focus on the issues or concerns material to each company. Given the rigour of our analysis before making an initial investment, we find the need for engagements for change relatively limited when compared to engagements for information.