Future Leaders Blog

The ICGN Future Leaders Committee aims to integrate the perspectives of early career professionals into ICGN’s policy work. Following its appointment in January 2025, the Committee decided to focus on three key themes: Capital markets competitiveness, Executive remuneration and Board effectiveness. Its members have produced videos and articles to share their insights and stimulate debate on important corporate governance issues. The views expressed are those of the individual members of the Future Leaders Committee and do not necessarily reflect the positions of the ICGN Secretariat or its members. 

How can robust legal protections for shareholders strengthen competitiveness by assuring investors that they have recourse against corporate misconduct?

David Haughan, Investment Officer, Woodsford

Robust legal protections for shareholders play a vital role in strengthening the competitiveness of the listing venue and wider capital markets in a number of ways. First, they give investors’ confidence that the market is comprised of well-run companies that believe they can comply with legal requirements. Second, they support investors’ ability to engage with companies effectively, as the right to legal recourse means that there is an ultimate form of escalated engagement if all other engagement fails. Third, they ensure that investors’ capital is protected when an egregious corporate governance failure occurs. 

  1. Legal protections as a signal of market integrity 

When shareholders have a right to legal recourse against companies, this creates a credible deterrent against corporate wrongdoing. This deterrent sends a powerful signal that participants in that market are held to high standards and accept accountability. This lowers the risk premium associated with an investment in this market and means that investors should be more willing to commit their capital. 

  1. Legal protections as a stewardship tool 

From a stewardship perspective, the right to legal recourse underpins the stewardship ecosystem because it means that litigation can be used as a tool of last resort when all other forms of engagement have failed. When a serious corporate governance failure has occurred  and other remedies have been exhausted, investors have enforceable rights to bring companies and directors to justice and uphold market discipline. This reinforces the effectiveness of all other shareholder engagement. 

  1. Legal protections as a capital recovery mechanism 

Accessible shareholder rights to recourse also mean that, where a company has misled the market, committed fraud, or failed to uphold corporate governance standards, investor capital is protected. This means that investors can invest with confidence that it will be possible to recover their capital through legal recourse if necessary.

Will Farrell

Federated Hermes
Assistant Manager, EOS
London

Will co-leads the climate change theme at EOS, the stewardship arm of Federated Hermes Limited, where his coverage includes companies in Europe and Australia, primarily financial services, energy, chemicals, and materials. Prior to joining EOS, Will worked in the energy and infrastructure investment banking team at Macquarie Capital, where he specialised in renewable energy. Before that, Will held a number of roles across the UK climate policy space, including as a parliamentary researcher for Rt. Hon. Chris Skidmore MP on climate and energy issues, and as a climate and economic policy analyst at a diplomatic institute. He was appointed as a voluntary adviser to Rt. Hon. Alok Sharma MP, President of COP26, on preparations for COP26 after co-founding a Westminster climate policy group in 2019, which engaged MPs and Members of the House of Lords to advocate for more ambition on climate action in public policy. Will has a Bachelor’s degree (1st Class Honours) in Economics from the London School of Economics and Political Science.