December 2022
The roundtable discussion brought together investment professionals and consultants, exploring voting policies, emerging thematic engagements, and efficient stewardship practices. UBP, ShareAction, Schroders and Close Brothers Group were among the leading organisations in attendance.
Navigating the Fine Line
Balancing Representation of Underlying Investors’ Views in Voting Decisions
- Exploring the use of fintech platforms for analysing and gathering investor sentiments
The group expressed concerns about the high costs and practicality of these tools, particularly for managers with strict voting policies. There was also concern expressed about voting on behalf of the underlying owner and confusion over which shares are being represented. In one of the speakers’ remarks, he mentioned that communicating all viewpoints can be difficult when there are large differences of opinion among the shareholders. - Practicality and transparency are key
The optimal approach for ensuring informed investment decisions is to furnish investors with information regarding the fund’s policies and strategies. Should they approve, their proxy vote can be cast on their behalf. Conversely, if they do not approve, it is advisable to counsel them that the fund may not align with their investment objectives. Ultimately, the choice of where to invest and what objectives to pursue lies with the individual investor. By actively engaging with them and facilitating a decision-making process, the agency can demonstrate the presence of a deliberate choice. - Streamlining the proxy voting process
Additionally, a speaker emphasised using a proxy voting agency by smaller asset management teams with a large number of holdings to streamline the processes. They also emphasised the importance of finding a balance between considering all perspectives and maintaining efficiency in the process.
Thematic engagement and collaboration on key issues
ESG issues are dynamic and reflect evolving societal expectations of corporate sustainability. Institutional investors may encounter risks and opportunities related to specific themes through their investments. Focusing on a chosen theme through thematic engagement enables more effective engagement and drives a specific desired result which is material.
Read the full summary to delve further into this insightful discussion.
