Nigel Wildman discusses new guidelines aimed to help trustees stay ahead of the investment game.

Now I'm not talking about putting a plastic bottle in the wrong recycling bin, or writing a misjudged post on social media and regretting the backlash. Nobody does that, do they?

Modern life is full of acceptable norms that at some point or other we all fall foul of, even though we try to do our very best.

Just when you thought that as a trustee you had all the bases covered, there is this big thing lurking over the horizon called ESG.

Now that's not a friendly giant like the BFG, that you can lament to your children before they slumber off into dreamland, no, this is exactly what is says: Environmental, Social and corporate Governance, or to put it another way, 'Responsible Investing'.

Not only do we now have to consider whether we are invested in the right mix of assets and how much risk we are taking for the likely rewards, we are now 'responsible' if those companies do not observe g ood stewardship and do not operate in a responsible way, risking pension schemes losing money in both the short and long term.

For example, companies that are involved in dubious practices or not treating their employees well have suffered reputational damage, consumer boycotts and/or industrial action.

Others have broken the law and have been ordered to pay vast fines. These include financial irregularities, health and safety breaches that have caused terrible loss of life, or accidents that have caused large-scale environmental damage.

But what has this got to do with me you ask? Trustees appoint fund managers who select stocks in the UK market so we are 'at a distance' from the activities of the companies. Unfortunately, how wrong you are.

Andrew Warwick-Thomson, Executive Director for Regulatory Policy at The Pension Regulator was quoted recently in the press urging trustees and asset managers who think these things don't matter 'to wake up and smell the coffee' and avoid complacency. Okay! As a trustee he has my attention here.

The fact is that shareholders have voting rights, if you hold a stock you can vote to influence how that company operates and ultimately reduce the risk of that investment.

If you invest in funds then you can go to your fund manager and indicate how you would like them to vote for you. Historically this has been the preserve of large schemes and small schemes did not get much of a look in as fund managers could not cope with so many requests.

The Association of Member Nominated Trustees (AMNT) has solved this problem by coming up with a handy set of 'Red Lines' – a generic set of guidelines that schemes of any size can instruct fund managers to use to vote on their behalf.

Therefore, no matter if you are a large or small scheme you have a mechanism now to instruct your fund managers on how you wish to vote on companies listed on the UK stock exchange.

So, like your children after their bedtime story you can sleep easy, well easier maybe, because after all you are a trustee always thinking about what the next big thing is that's lurking over the horizon.

If you are interested in learning more head to redlinevoting@amnt.org.

Written by Nigel Wildman, Associate Commitee Member, AMNT.