ESG, Stakeholder Engagement and More with Kosmas Papadopoulos
As the latest addition to our Corporate Governance & Activism practice, Kosmas Papadopoulos brings with him extensive experience as a former executive director at ISS. He joins Senior Managing Director and practice lead Rodolfo Araujo in the firm’s offerings to engage stakeholders and respond to a wide range of investor concerns. We recently sat down with Kosmas to better understand his background and what he sees around the corner in the world of corporate governance and ESG, and more importantly, how the two may affect a corporation’s relationship with key stakeholders.
Welcome to FTI, Kosmas! What led you to this particular role at FTI?
I started my career in corporate governance working at ISS right after graduate school. My educational background is in economics, which I got as a bachelor’s degree from Grinnell College, Iowa. After that, I earned a master’s from Georgetown University in International Relations, primarily focusing on International Economics and International Business. That’s where I first encountered the concept that corporate governance can have a broader impact on the economy.
For the majority of my time at ISS, I worked in the Custom Research group, where I helped institutional investors develop their own voting guidelines and corporate governance programs. I helped them study the market, benchmark companies to various standards and practices, and then help them formulate and implement those guidelines.
In my last two years at ISS, I served as Managing Editor and Head of Thought Leadership. I created and managed corporate governance content as well as environmental and social issues and how they can affect investments.
For those unfamiliar with corporate governance and activism, can you explain, especially pertaining to what you do at FTI?
At FTI we help companies with their corporate governance so they are better able to engage and have the full support of their shareholder base. Corporate governance is a system of checks and balances that helps maintain the interests of management, shareholders, and the board of directors, among other key stakeholders. Corporate governance is meant to serve as insurance for investors to protect shareholder value in the long term.
What kind of issues do you and your colleagues help clients with? Why do people come to you?
We help boards engage with their shareholder base on a wide range of topics, so that they may build trust with investors and minimize shareholder dissent while pursuing their strategic initiatives.
These efforts may range from reviewing a company’s corporate governance practices to addressing potential shareholder concerns about environmental and social issues and helping the company defend itself in a proxy contest scenario.
What are good indications that a client, in any given sector, may require your expertise?
It could be argued that every client could benefit from our expertise, if not for activism issues, certainly for issues of corporate governance. Our expertise really lies in having worked in this space with all involved stakeholders for many years. We have a certain level of familiarity with the way of thinking of many of the key players – companies, asset managers, asset owners, and proxy advisors – around various issues.
This concept is imperative for every company, big or small. And not just in the US, either. Activism and corporate governance have gained prominence both in developed markets and emerging markets over the past decade.
ESG is a popular acronym getting a lot of buzz right now. In your opinion, what can companies do to make sure they’re staying ahead of any ESG-related issues?
Environmental and social risks are ultimately both matters of good governance. The types of practices we see emerging include better monitoring and more proactive management of these issues to prevent potential controversies or incidents and to improve overall company performance on these factors.
ESG is also not just about risks. There are many examples of companies taking positive action. For example, many firms take proactive steps to cultivate an inclusive and diverse environment in the workforce, while others may take advantage of business opportunities related to the transition to a low-carbon economy.
In the long term, it makes good business sense to be proactive on ESG issues. By enhancing and improving corporate governance, we are helping to protect a company’s interests in the long-term. Improving governance at individual firms may also help address systemic risk and improve governance in the market as a whole.
What are some other important trends that you’re noticing in the space?
We are certainly seeing all types of activism on the rise, both economic activism, like hedge funds, as well as other types. The level of engagement by mainstream investors is also higher than it has ever been, and investors are more willing to bring corporate governance topics to the table and proactively engage in them.
You’re known to be a bit of a data and research aficionado. Tell me how you use data and research to help clients.
There is a growing amount of data available on these issues and we are able to use the data to tell a story, whether it’s benchmarking companies with respect to their peers or looking at trends among investors in their voting patterns or correlations between different governance practices and company outcomes. We may also use data to look at how governance factors may impact performance and other aspects of a company’s story.
What are you excited to be able to deliver on for your clients in the activism practice?
I’m excited to use my understanding of the subject matter and my background in the industry for over a decade to help deliver continued value to our clients. I also look forward to using my knowledge and expertise to help find the right solutions for our clients and identify various ways to help them engage with their shareholders.