Thank you for downloading this program. In this edition of the bottom line, Evan Davis and guests discuss the relationship between business leaders and shareholders.

Hello and welcome to the program. Now, arguably, the most important relationship in business is the one between the people who own a company, the shareholders, and the people who run it, the managers. They often

grumble about each other. The managers think the shareholders fail to understand them. The

shareholders often feel ignored. So today we have something of a shareholder special, what makes

a good one or a bad one, and how should company executives get the best of them and give the best to them?

Well, I've three guests representing both sides of the shareholder manager divide. And let's meet them.

And first up, Helena Morrissey, who's the chief executive of Newton Investment Management.

So you represent the shareholders, Helena, to some extent,

for the purposes of this conversation, because you invest money on behalf of clients. How much money?

What sort of clients? Fifty-five billion pounds or thereabouts. And it's a mix of pension funds

and retail clients, mainly in the UK, actually. Right. So they come to you and say,

we've got a pension fund. We don't know what to do with it. You take it and manage it for us. And we're very active investors. So we are trying to deliberately outperform. We're not managing according to an index. We're trying to make money for our clients. I mean, you're not just saying, look, there's the footsy 100, we'll put a bit in everything.

Exactly. Exactly. So we don't have to, importantly, we don't have to invest in every company because of that. We're very selective about which companies we invest in engaging with them as part of the analysis. But if we ultimately don't like what they're doing, then we'll sell or not hold their investments. Right. Now, if I'm a local authority, for example, or I'm a charity and I give you, I don't know, what, 10 million pounds to look after, that would be a reasonable sum, would it? That would be a reasonable sum. That would be good. Who owns the shares? If you invest in shares, who's the owner of those shares? The charity owns the shares. We are an agent working on their behalf. So they have their own little pot, the charity. It's their pot. And so they can say, we don't want to invest in tobacco companies or we don't want to invest in oil companies or whatever, and you would respect their rights to pick and choose. Exactly. So a lot of charities in particular give us their ethical

constraints and we have to invest accordingly. A lot of other clients are very happy for us to

decide and there's a difference between responsible investing when you're trying to deliver

sustainable returns over a long period and ethical investing when you've got the screen of no

tobacco or no pornography, something like that. Or whatever it is. All right. We're also with us is Nigel Wilson, chief executive of the huge

legal and general group based in the UK, operations all over the world. We've heard how much

Helena has under fund management, Nigel, how much do you do?

Because you are a pretty big organisation.

Yeah, we have over £500 billion under management,

of which about two thirds of it is in index funds,

...