The culture and success of the music industry are founded on relationships. We are very much part of this and we welcome it. We have various groups of stakeholders with whom we have close and direct relationships fundamental to our existence, they include our shareholders, our service providers, our Advisory Board, the songwriting community and the publishers, administrators and PROs. There are many others who we recognise as well, even though we may not interact with them directly – prime amongst these are the millions who listen to music. Our Investment Adviser is at the heart of our engagement work and is responsible for the day-to-day interactions with all of our stakeholders.
Hipgnosis places great importance on its relationships with its Shareholders, as they provide us with the resources to make the acquisitions necessary to build our portfolio and so support songwriters and performers. We undertake both direct and indirect engagement activities with this group. This is covered in more detail in the Corporate Governance Statement of our Annual Report.
Following the acquisition of Hipgnosis Songs Group, Hipgnosis now has 35 employees. None of the employees are classified as Senior Executives as they do not report directly to the Board of the Company. Whilst they are indeed employees of the Group, at the time of the acquisition of HSG, the Board delegated responsibility for HSG’s employees to the Investment Adviser, consistent with their policies, procedures, and knowledge of the rights administration industry.
Additionally, we operate through, and work closely with, a number of third-party service providers, including the Investment Adviser, Administrator, Company Secretary, corporate brokers, lawyers and our other professional advisers. The quality and timeliness of their service provision is critical to the success of the Company, as is their adherence to best practice ESG requirements. The Group’s ESG policies are shared with our suppliers.
We are very pleased that everyone involved with the Company worked so well and seamlessly throughout the COVID-19 pandemic. Our Investment Adviser has re-opened its offices and has made returning to the office optional, for the time being.
The Investment Adviser manages the vital input of our Advisory Board. Our Investment Adviser also enables us to engage with the writers and composers of song Catalogues acquired to update them on management activity around the Catalogues, explore creative projects, create new interpolations and discuss new commercial opportunities. An example of this is placing songwriters, who are featured in the Hipgnosis portfolio, in the recording studio together to collaborate and create new compositions.
The Investment Adviser also has regular communication with publishers and Administrators (such as Kobalt) and the PROs (such as ASCAP) who administer the payment of royalties due to a songwriter or recording artist in respect of a Song, either directly from the end user or from royalty collection agents, in order to assess that the royalties paid through are accurate and delivered in a timely manner.
The Investment Adviser has procedures in place that enable them to identify any under/over payments of revenue and work quickly to resolve this with the Publishers, Collection societies and PROs. There have been multiple occasions where we have returned millions of Dollars back to our Stakeholders.