It is one of the oldest complaints in the world of regulators, standard-setters and investors.  The investment community, it is always said, doesn’t engage as fully as regulators and standard-setters would like in the process of creating and refining the rules and codes which aim to give investors the security and confidence they crave.  Up in lights on the opening page of the Financial Reporting Council’s website is a mission statement: ‘The FRC is the UK’s independent regulator responsible for promoting high level corporate governance and reporting to foster investment’.

And Stephen Haddrill, the FRC’s CEO, reiterated this at its annual open meeting in mid-September.  Amongst the FRC’s three key principles, he said, was ‘promoting effective consultation with stakeholders, especially investors, (an area where we have not always been able to tease out an investor view as effectively as we would like), so we are seeking to build bridges to the investor community even more strongly’.

And this, as he pointed out, is where Angus Bogle comes in.  In mid-July he was appointed Director of Investor Engagement at the FRC.  And in mid-September he rolled up his sleeves and started the process of, as he puts it, ‘getting the FRC closer to the investment community’.

He is well placed.  He has been in financial services for the last 25 years on both buy and sell-side, latterly as head of equities at Fidelity International. ‘I understand investors and what makes them tick’ was how he summed it up.

And he doesn’t underestimate the task. ‘It is important the FRC gets close to investors, and vice versa, to get their voices heard’, he says. ‘I need to get everyone throughout the organisations to understand what the FRC does and play a part.  Our role is to look after investors and it is very important for them to get engaged.  Without that we will develop our policies not exactly in a vacuum but certainly in an area of reduced air’.

And he wants to extend the breadth of the connections.  ‘Our links with big institutions are already good’, he says, ‘but the coordination could be better’. And another issue is the tendency for an understanding of what regulators are doing to be kept in a relatively isolated silo in the investment institution.  ‘If I am a busy portfolio manager in a big institution I will probably have someone who deals with “this sort of stuff” on behalf of the organisation’, he says, ‘and they will attend the relevant investor bodies, like CRUF, the corporate reporting user’s forum, for example’.

Bogle’s worry is that information and the exchange of views within the industry probably tends to remain within that small department rather than becoming common knowledge across the firm.  ‘The crucial thing’, he says, ‘is to ensure there is a strong link between that person and the people at the coalface.  And there needs to be more drive from the top of the organisation’.  It all needs to be more connected.  ‘If the motivation when something new comes in is that it is passed to “the person who deals with this” then we are missing out’, he says. ‘So we need to talk to the people at the coalface, the analysts, the portfolio managers and so on, and get the communication across’.

The other downside of the process of engagement being often seen as the role of only one person in the investment organisation is the wasteful repetition of effort.  Bogle gives an example.  ‘I had one investor say to me: “I take an interest but I need other people in the organisation to share the burden. The IASB phones up wanting views on a particular issue.  The FASB then do the same and then the FRC calls up.  I am giving more or less the same answer to each. And then the results of those consultations don’t seem to go anywhere and it all takes time.  And if we engage and spend that time we want to see an effect and see it reach a conclusion”’, says Bogle.

So investors can be frustrated by the process.  And they also feel that they are under time pressure.  ‘They are’, says Bogle, ‘extremely busy people trying to work out what the drivers of a share price are and what is going to get them to outperform’.

It is the old difficulty of people in the investment world understanding the issues but feeling that they are too busy to engage with them.  ‘Most of them have developed a sense of how good corporate governance and really good stewardship is very important’, he says.  ‘But at the same time they are concentrating on running after the next nugget.  So some rely more on the accounts and audit to ensure that the corporate governance is good rather than spending time engaging directly with management’.

What Bogle wants is both wider engagement and specific engagement.  ‘We want a greater degree of the investment community to engage with us’, he says, ‘so it is not just the loudest voices’.

One way of getting closer is the FRC’s Financial Reporting Lab which brings companies and investors together in an unofficial space to try and produce solutions to problems they are encountering.  ‘The Lab’, as Bogle puts it, ‘is where companies and investors meet and chuck ideas about.  We are incredibly grateful to those people who are happy and willing to give us input’.

Another is a more traditional method.  ‘I will be burning shoe leather’, he says, ‘to see the top-level contacts and gaining familiarity with the people we need to see in organisations and investor bodies.  It is important for me to understand the framework in which the FRC works, particularly in Europe’.

This brings up another strand.  The world is changing.  The recent figures released by the Office of National Statistics show that, in terms of value, overseas ownership of shares on the UK stock market has now risen to 53%, over half the market.  This changes the game.  ‘The UK shareholder base is very different to what it was 15 years ago’, says Bogle. ‘The UK investment community has always been seen as the people to engage with.  Plainly that is now not the whole picture.  If 53% of the market is owned by the rest of the world that is a big number and so we need to engage with foreign investors as well’.

It is a changing world and Bogle, through his work, will want to change it further.  ‘It is not just about corporate governance and stewardship’, he says. ‘It’s about getting people across the investment spectrum to care about what the FRC is doing and to get the whole investment base to understand.’