AMG believes that sound corporate citizenship and attention to governance and environmental principles are essential to our success and that of our Affiliates. We are committed to operating with integrity, contributing to the local communities surrounding our global offices, diversity and inclusion, developing our employees, and being thoughtful stewards of natural resources. We are also focused on the security of our data and safeguarding our clients’ privacy. AMG’s Board of Directors provides oversight over these environmental, social, and governance (ESG) issues and is committed to supporting AMG’s efforts to operate as a sound corporate citizen. We believe that a conscientious approach to business strategy, corporate governance, and corporate citizenship creates long-term value.
AMG has adopted best practices in corporate governance:
AMG’s Board of Directors has a highly independent structure, with a strong Independent Lead Director, and all Committees are composed entirely of independent directors (with all Audit Committee members considered to be “audit committee financial experts”). The Board undertakes annual self-evaluations (across the full Board and in each Committee) and individual director assessments. It is actively refreshed to maintain a wide array of qualifications, skills, and attributes. The Board has elected four new Directors since 2012, and appointed new Chairs of all three Committees and a new Independent Lead Director in 2015.
The Company’s amended and restated by-laws provide for majority voting in uncontested director elections. Under the majority voting standard, directors are elected by a majority of the votes cast, which means that the number of shares voted “for” a director must exceed the number of shares voted “against” that director. In a contested election (a situation in which the number of nominees exceeds the number of directors to be elected), the standard for the election of directors will be a plurality of the votes cast. Any director that is not elected must tender his or her offer to resign.
Our Board of Directors is committed to maintaining responsible compensation practices and believes that rewards for our senior leaders should be commensurate with the results they achieve for our stockholders. Our strong governance procedures and practices with respect to employment and compensation include the following:
Governance and Compensation Practices:
What we do:
What we don’t do:
When a new non-executive director joins the Board of Directors, we provide an orientation program that includes personal briefings by senior management on the Company’s operations, strategic plans, financial statements, governance, and key policies and practices. New directors also undergo in-depth training on the work of each committee of the Board. Throughout their tenure on the Board of Directors, each director is expected to maintain the necessary knowledge and information to perform his or her responsibilities as a director. To assist the directors in understanding the Company and its industry and maintaining the level of expertise required for the director, the Company will, from time to time, offer Company-sponsored continuing education programs or presentations, including sessions on select topics during the annual Board of Directors offsite. Additional training is also provided when a director assumes a leadership role, such as becoming the chair of a committee.
AMG maintains a strong corporate culture that promotes the highest standards of ethics and compliance for our business. Our Code of Business Conduct and Ethics sets forth the important principles guiding the conduct of our employees, officers, and directors. The Code governs the management of conflicts of interest and corporate opportunities, prohibits any engagement in unlawful activity in conducting AMG’s business, and requires that all business matters be conducted in accordance with ethical standards and applicable laws. Employees certify, at least annually, that they have read and agree to comply with the Code. Employees are required to report violations of the Code, or of any applicable law, rule or regulation to the Company. Reporting of any actual or suspected code violations, misconduct, or concerns may be done confidentially through an independent, third-party operated “whistleblower” hotline, or to the employee’s manager, Human Resources, or the Chief Administrative Officer. AMG strictly prohibits retaliation in response to such reporting.
AMG takes seriously its responsibility to conduct its business in a manner that avoids conflicts of interest and the potential for improper influence. AMG’s Policy on Political Contributions and Other Restricted Payments requires full compliance in the conduct of AMG’s business with all political contribution, anti-bribery and anti-corruption laws of the jurisdictions in which we and our Affiliates conduct business, including but not limited to the Foreign Corrupt Practices Act, the UK Anti-Bribery Act, and federal and state pay-to-play statutes and regulations. Under the Policy, employees are prohibited from offering any payment, gift or contribution, either directly or through intermediaries, for the purpose of obtaining or retaining business for AMG or our Affiliates, or gaining an advantage in the conduct of any business. Any political contributions by employees to candidates for federal, state, and local office must be pre-approved and reported on a quarterly basis. Employees are required to certify at least annually that they have read and agree to comply with the Policy. To avoid even the appearance of conflict with our Affiliate investment operations, AMG has adopted a strict policy that prohibits employees from trading in their personal accounts in any publicly traded security.
AMG’s Board of Directors has principal responsibility for oversight of our business ethics and risk management process; the majority of Directors have extensive background and experience in risk management. AMG has an internal audit function which reports to the Audit Committee of the Board of Directors on the Company’s position with respect to risk. Executive management reports to the Board quarterly and annually on risk management practices, AMG’s adaptation to the changing risk environment, capital planning, liquidity planning, and market risks. The following documents are available on AMG’s corporate website: Corporate Governance Guidelines; the Code of Business Conduct and Ethics applicable to all directors, officers and employees; the Code of Ethics applicable to our Chief Executive Officer, Chief Financial Officer and other senior financial officers; and the charters for the Audit, Compensation and Nominating and Governance Committees.
For AMG, our employees and our reputation are our most important assets, and attracting and retaining top talent to execute on our business objectives is a fundamental imperative. We have numerous programs to support our employees with respect to their health, family leave, and educational support, and are focused on building employee engagement with communities through corporate citizenship initiatives.
In 2018, AMG launched a series of communications forums to increase the dialogue between senior management and our employees, comprising regular small working group lunches as well as company-wide town halls, which are ongoing in 2019.
We are committed to fostering and promoting an inclusive and globally diverse work environment where all of our employees are valued and appreciated for their contributions; we believe diversity and inclusion result in a highly creative and innovative workforce. AMG has an Equal Employment Opportunity and Anti-Discrimination Policy applicable to all employees that prohibits discrimination based on race, color, national origin, religion, sex, pregnancy or pregnancy-related condition, sexual orientation, gender identity or expression, age, national origin, physical or mental disability, genetic information, ancestry, veteran status, military service, application for military service, marital status, and other legally protected classifications. Our Equal Employment Opportunity and Anti-Discrimination Policy goes hand in hand with our Anti-Harassment Policy, which prohibits sexual harassment or discriminatory harassment of any kind. Our Anti-Harassment Policy details how to report and respond to harassment issues and concerns, and strictly prohibits retaliation against any employee due to reporting harassment. If AMG determines that a violation of the Equal Employment Opportunity and Anti-Discrimination Policy or the Anti-Harassment policy has occurred, appropriate disciplinary action will be taken against the offending party. We are equally committed to operating in a business environment that promotes equal employment opportunity in our hiring practices and in managing all our employees and this is evident in all aspects of our employment practices and policies. Cooperation with these policies is mandatory and relates to all hiring, promotion, and day-to-day activities of AMG.
We have implemented diversity training for employees, and continually seek to further expand the mixture our employee base as our staff around the world contribute their diverse thinking to improve our business and communities. Our executive management team has responsibility for diversity initiatives, and reviews these with our Board of Directors on an annual basis at minimum.
Approximately 25% of AMG’s senior management team is female. In addition, we are highly attentive to Board diversity and refreshment; 25% of our non-executive Directors are female, above average for S&P 500 companies.
Eligible employees are offered a comprehensive and competitive benefits package. Some benefit programs require contributions and others are fully paid by the Company, including but not limited to:
In addition, each employee is required to attend an onboarding session to review benefits, policies, and procedures. AMG strives to provide a safe working environment for its employees, with policies and programs in place to address:
Leadership training and skills development are anchored on a comprehensive performance appraisal process. We believe regular communication between employees and managers fosters a work-based learning environment. AMG encourages its employees to take responsibility for their development, in partnership with their managers, and leverages informal communications alongside annual performance reviews to evaluate employee satisfaction. Employees work with managers to set goals and objectives on an annual basis at minimum.
Through employee engagement in our corporate philanthropic initiatives across our global offices, we are committed to giving back to the communities in which we operate. The AMG Charitable Foundation makes meaningful donations to a variety of exceptional non-profit organizations and community programs, supporting educational, cultural, environmental, health, social, and other charitable purposes in these communities.
In alignment with our corporate values of social responsibility, AMG contributed $20 million in 2018 to advance scientific research in amyotrophic lateral sclerosis (ALS) and develop effective treatments for people with ALS, by helping to establish The Sean M. Healey and AMG Center for ALS at Mass General (“The Healey Center”). AMG’s investment in the Center will help broaden the availability of treatments globally. It is our hope to expand the impact of our philanthropic efforts over time through The AMG Foundation, alongside our employees and partners worldwide.
We take pride in supporting the charitable work and contributions of our employees, many of whom serve on non-profit boards or make significant contributions as volunteers within the communities in which they live and work. Our employees are also generous contributors of their financial resources, including participation in company-wide campaigns to support local charities. AMG has implemented company-supported time off to encourage employees in their charitable endeavors and matches employee donations to eligible non-profit institutions.
AMG has a formal information security program, designed to develop and maintain privacy and data security practices to protect company assets and sensitive third-party information (including personal information). This program is governed by a committee comprising members of senior management, including the Company’s Chief Information Officer, which meets regularly and reports to the Board of Directors at least annually.
AMG recognizes the importance of protecting information assets such as personally identifiable information (PII) of our clients and employees, and has adopted policies, management oversight and accountability structures, and technology processes designed to safeguard this information. All AMG employees attest annually to information security policies, and are required to participate in regular security awareness training to protect themselves and the AMG data to which they have access. These trainings also instruct employees on how to report any potential privacy or data security issues.
AMG’s Information Security organization comprises internal and external resources designed to identify, protect, detect, resolve, and recover from various threats and attacks of malicious actors. AMG leverages 24x7x365 monitoring tools and services to address the confidentiality, integrity and availability of company assets and data. Regular internal and third-party reviews are performed on processes and technologies to validate the effectiveness of privacy and data security controls.
AMG monitors best practices and developments in data privacy and security, including increased scrutiny of third-party service providers with access to sensitive company data. AMG works with key third-party service providers to monitor and support the control environment and breach notification processes. AMG also has its own fully documented proprietary security incident response plan, with defined roles and responsibilities that address notification obligations and procedures in the event of a data breach.
AMG is dedicated to business continuity and resiliency. We have documented strategies, policies and procedures in place to protect employee, business, and client data in the event of an emergency or natural disaster.
At AMG, we are committed to long-term environmental sustainability and reducing our ecological footprint. While we are an investment management company which does not have the direct environmental impact of other industries such as manufacturing, energy or retail businesses, we are committed to using natural resources efficiently and optimizing our energy use. In this regard, we have adopted the following initiatives and programs both to increase environmental awareness among our employee base and reduce our corporate impact on natural resources where possible:
As a firm, we also seek to increase the development and awareness of socially and environmentally responsible procurement, and to align with businesses that not only deliver superior quality goods and services, but also operate in ways that are respectful of the rights of their employees and in ways that preserve natural resources and promote environmental sustainability. To achieve this objective, we have adopted the following principles to guide our procurement activities:
In 2018, AMG completed an inventory of its GhG Emissions with third-party attestation from PwC. In addition, AMG participated in CDP’s annual climate disclosure; further information on AMG’s disclosure may be found on the CDP Website.
One of our principal offices, in Prides Crossing, Massachusetts, is located on 90 acres of land, the vast majority of which is maintained in its natural forested state with many walking trails accessible by the public.
AMG does not directly invest client assets; the investment function sits with our 30+ outstanding Affiliates, which are independent boutique investment management firms with excellent reputations in their areas of specialty. Our Affiliates represent firms of the highest integrity, and today, a substantial majority of our Affiliates demonstrate a commitment to good governance and sustainability by incorporating these factors into their investment processes. Currently, 11 of our Affiliates participate as signatories to the UNPRI, and 5 are signatories to the UK Stewardship Code. AMG Affiliates accounting for approximately 75% of AMG’s AUM in aggregate operate with formal responsible investment policies which consider ESG practices in their investment strategy, management engagement, and proxy voting decisions. We are proud of this record, and continue to work with our Affiliates on best practices in this area.
While our Affiliates retain operational and investment autonomy, and have their own separate policies and procedures relating to environmental and sustainability matters, we take seriously our responsibility to promote the importance of responsible investing and in addition to our ongoing work with Affiliates, incorporate these factors in our assessment process for prospective Affiliates.
AMG has implemented a Sustainability Committee with oversight of policies and operational controls of environmental, health and safety, and social risks, which reports to the Board of Directors at least annually. The cross-functional Committee includes multiple members of the Company’s executive management team.
AMG fosters an open environment for discussing environmental issues, and we encourage our employees to approach members of our Sustainability Committee with any questions, concerns or suggestions regarding our practices and policies, and support dialogue on how AMG can accommodate sustainability issues in a way that is consistent with the goals of our various stakeholders – including AMG’s stockholders, our employees, our Affiliates, and the investors in our Affiliates’ products.
Taxes paid in the United Kingdom, Canada, and Hong Kong account for over 80% of the Current Controlling Interest Foreign Tax Provision as disclosed in our 10-K.
Our United Kingdom Tax Strategy may be found on our Corporate Governance site.