Governance

Arrow is committed to achieving our purpose of building better financial futures and to meeting our stakeholders’ expectations on environmental, social and governance issues. We will deliver on these commitments by being a responsible business and investor and by embedding and maintaining the highest standards of business conduct and risk management. 

Responsible investment

As part of Arrow’s transformational journey into a vertically integrated European asset manager, we have continued to focus on further integrating core ESG principles in a systematic manner into all aspects of our Fund and Investment Management business. As part of our commitment to being a responsible investor, we work across functions to assess key ESG considerations as applicable to each Investment opportunity. From the initial stages of a deal we carry out a risk assessment as to whether risks related to the transaction including environmental, social and governance, and any other factors that are consistent with the risk appetite and core ESG principles of Arrow and its investors. Identifying and assessing these considerations, and maintaining transparency, is a core part of our long-term view on delivering value and return to our investors. As we continue to build our business, a key focus will be to continue to embed robust and transparent processes to assess ESG considerations in a manner that is consistent with the evolving vision of the firm. As part of Arrow, AGG Capital Management Limited (AGGCM), the investment manager of the thirdparty discretionary fund management business within Arrow including as investment manager of Arrow Credit Opportunities Scsp SICAV-RAIF and related funds, is committed to delivering a responsible and sustainable approach to investing in line with its purpose of building better financial futures. The alignment between our internal approach and the 6 key principles of the UN’s Principles for Responsible Investment (PRI) mean we were delighted to be accepted as a signatory to the PRI in Q4-21 and look forward to continuing our evolution within this community.

Business conduct and risk

Our regulators, customers, employees, suppliers, investors and shareholders expect Arrow to uphold the highest standards of business conduct and risk management. We are committed to meeting and, wherever possible exceeding these expectations and we have developed a robust governance framework which is reviewed on an ongoing basis to suit the size, scale and nature of our business as well as address developing risks. We seek to achieve the highest standards in conduct and risk management, much of which is already part of our values and governance model as a regulated financial services group and aligns well with our core expertise in areas such as the fair treatment of customers.

Board sponsorship and oversight

In the first quarter of 2021, a board sustainability committee, comprising all of Arrow’s non-executive directors and the Chair, was established to oversee the delivery of the Group’s sustainability agenda and to review, challenge and support the Group’s approach and progress against agreed sustainability initiatives. The board sustainability committee reported to the Arrow Global Group PLC board on the Group’s sustainability work and progress on a quarterly basis. The board sustainability committee was supported in its role by the executive sustainability committee which drove the delivery of Arrow’s environmental, social and governance initiatives and the director of sustainability who is responsible for managing the delivery of our ESG commitments. A dedicated section of our corporate website was launched to highlight our ESG initiatives and our key performance metrics. Following completion of the acquisition of Arrow Global by TDR, the business has updated our governance approach to reflect the new business structure, evolving the previous structure for 2022 to maintain a senior leadership focus via our Sustainability and ESG Forum who will support the relevant boards in determining and delivering Arrow’s ongoing ESG strategy and commitments.

Group values

Our shared values play an active role in life at Arrow and help us act in an ethical and responsible way. They are Arrow’s North Star and coupled with our culture, they guide the organisation towards achieving its purpose and serving our customers and clients in the best way possible. Launched in 2016, our values are fully embedded across the Group and help us reward the behaviours that will make us more sustainable and more successful.

Whistleblowing

Arrow aims to maintain the highest standards of openness, integrity and accountability in its work. All employees or consultants who work for or with Arrow are encouraged to be vigilant for signs of wrongdoing or criminal activity by individuals or organisations working with Arrow, and are encouraged to report such behaviour using our dedicated anonymous whistleblowing reporting line, which is managed by independent ethics and compliance specialist, Navex Global.

Financial crime

Arrow is committed, in the jurisdictions in which it operates, to the prevention of financial crime such as money laundering, the funding of terrorist activity, bribery and corruption, prevention of sanctions breaches, fraud and market abuse. Through risk-based internal procedures, policies and systems and controls, we strive to ensure that high standards of financial crime prevention and awareness are maintained by all employees and consultants, whether under a contract of employment or otherwise. Our procedures include the screening of new and existing customers against sanctions and PEP watchlists and monitoring existing customers through a daily monitoring regime, which ensures timely and immediate reports of any potential instances. These activities are supported by annual financial crime training, which is mandatory across the Arrow Group for all new and existing employees.

Human rights and modern slavery

Arrow operates in accordance with all relevant laws and regulations, including those relating to human rights, which are specially addressed through a range of colleague-facing polices with oversight by the Group chief people officer and senior management in each jurisdiction. In addition, each year the board reviews and approves the Group’s Modern Slavery Act (MSA) Statement. The existing MSA Statement was approved in May 2020. The board considers that the actions being taken by the Group to identify and/or address any potential modern slavery or human trafficking within its supply chain continue to be appropriate.

It is pleased to report that the assessments undertaken in respect of the Group’s supply chain to date have not identified any modern slavery or human trafficking activity. The company statement on Modern Slavery can be found here: 

The company statement on Modern Slavery can be found here.

Data privacy and security

Cyber threats facing industry and supply chains are continuing to grow and evolve at a rapid rate, even more so during COVID-19. Arrow manages this growing threat by having a robust information security framework aligned to the international standard for information security – ISO 27001, which is commensurate with a group of our size and the highly regulated sector in which we operate.

Tax transparency

The board and senior management are committed to managing its tax affairs in a responsible and transparent manner, to comply with relevant legislation and minimise risk whilst ensuring efficient utilisation of legitimate reliefs and incentives. This objective is aligned to the broader vision and values of the Group. The Group’s effective tax rate is reflective of the profit mix and tax rates in the jurisdictions in which it operates. The Group publishes its tax strategy on its website, which clearly sets out the aim of managing its tax affairs in a responsible and transparent manner, meeting all reporting and notification obligations and working closely with the tax authorities in the countries in which it is a taxpayer. The tax strategy can be found here.
 

KPIs