Aberdeen Standard Investments has written to UK companies in which it has an active shareholding.

Dear Chair, CEO and CFO,
It is during these difficult times that the role, values and social purpose of companies come into sharp focus.

As an active investor Standard Life Aberdeen is fully committed to supporting the corporate sector and the wider economy during this unprecedented period of upheaval. While current market turmoil has had a negative impact on the value of many businesses and constrained their ability to operate normally, our intention is to work with the companies in which we invest to ensure their long-term future rather than place inappropriate short-term demands on them.

As always we will seek to balance our economic role with our duty to invest responsibly on behalf of our clients and customers who entrust us with their long-term savings. We therefore fully endorse the letter issued recently by the Investment Association (IA) to the Chairs of FTSE 350 companies.

In addition to supporting the IA’s position we felt it would be helpful to clarify our approach to supporting the corporate sector and, in return, our expectations of companies in areas such as capital raising, dividends and consideration of shareholders and broader stakeholder interests in short-term decision making.

Dividend policy

As an investor we will continue to engage with companies to understand the impact of Covid-19 on their operations and the decisions they will have to take to withstand the current crisis and protect their long-term future. This will inevitably include the payment of dividends. While we would expect companies to do their utmost to retain capital required to meet their future needs, we would also expect that companies who are well placed to maintain their dividend policy will do so.

Capital raising

Many companies dealing with the current crisis will incur costs, particularly as they seek to treat stakeholders with fairness and respect. Taking all possible steps to protect the health and financial security of employees will be vital for companies in these times of stress. Companies also need to work with their suppliers so these enduring relationships are still in place when a degree of normality begins to return.

In circumstances where it becomes necessary for a company, in which we actively invest, to seek further capital we would endeavour to support such an exercise where it is in our clients’ or customers’ best interests. We would expect that such capital raising exercises give full consideration to the interests of existing shareholders.

Integral to our stewardship is our willingness, under exceptional circumstances and when it is in our clients’ interest, to be made insiders for a limited period. While this should only happen with our prior consent it may help us to understand all relevant aspects of a company’s position and to assist in developing support to assist a company through the Covid-19 restrictions. 

In assessing the provision of additional capital  we expect companies to be able to provide a strong business case and detailed analysis of how the planned capital raising will meet the company’s needs for a minimum of 12 months.  This would take account of any reduction of dividend, re-negotiation of debt covenants and the use of emergency support from banks and the government. Arrangements to support companies and the economy will be multi-faceted and require open and transparent engagement of all involved. We stand ready to play a part in this process.  

AGMs & voting

The upcoming AGM season will provide an opportunity for companies to engage transparently with shareholders on their approach to Covid-19. While it will enable shareholders to hold company boards and senior management to account for the decisions they have taken, it will also allow shareholders to show support.

Our approach to voting on AGM resolutions will invariably be based on the prevailing circumstances, including our past history of voting. In cases where we have instructed a vote against a management resolution in the past we are very likely to do so again unless we are persuaded efforts to address our concerns have been impacted by Covid-19 or voting unsupportively would hamper a company’s efforts to overcome the immediate challenges of Covid-19.


A number of companies will be seeking the triennial approval of their remuneration policies which will apply for the next three years. If necessary we will support companies seeking approval of the continuation of their existing policy for a further year to allow the deferral of changes until a more normal business environment exists.

During the next few months there will be many economic, political and social challenges. This will require some difficult decisions, the consequences of which will have long-term consequences, but this does not remove the need for companies to take account of the interests of shareholders and other stakeholders.

By working closely with asset managers and others the UK corporate sector can emerge from the current crisis with an enhanced reputation and recognition of its broader purpose in contributing to sustainable economic growth, creating value and helping to create wider prosperity.

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