Its ‘Shareholder Priorities for 2023’ publication outlines the key areas managers want companies to consider as drivers of long-term value.

The two issues, alongside others, have topped investors’ areas for engagement for a number of years, with the expectations on companies continuing to evolve as progress is made, the IA said.

The current challenging economic environment means that now more than ever there is a need for high-quality and diverse boards while during the AGM season, investment managers will be looking for companies to explain how climate change will impact them and how they are mitigating the risks.

The report suggests investors have recognised that good progress has been made by companies, although there is still room for improvement.

Andrew Ninian, director for stewardship, risk and tax at the IA, said: “Investment managers want to work together with companies to see them succeed and deliver long-term value to their shareholders, which ultimately benefits pensioners and households across the UK.” He said that is particularly important in the current economic environment given the challenges that UK companies are facing.

“Strong engagement and an open dialogue between investors and firms is crucial.”

He said that executive pay will also stay firmly in the spotlight in this year’s AGM season, as the cost-of-living crisis continues to bite.

Mr Ninian said: “Investors will look to companies to show restraint on pay for their top leadership team and ask that it reflects the wider stakeholder experience, including the lowest paid employees and vulnerable customers.”

The Shareholder Priorities report builds on the Principles of Remuneration report, published by the IA in November 2022.

That outlined investment managers’ expectations on company executive pay and pensions. This year, investors have called for restraint to be shown on executive pay in light of the cost-of-living crisis.

You can read the Shareholder Priorities for 2023 report here