We firmly believe the actions of companies and their executives affect the long-term interests and value for shareholders.
Voting rights are also part of shareholder value and we therefore aim to vote on all resolutions at annual and extraordinary general meetings held by companies in which we invest. This includes all companies in the S&P/ASX300 index and the MSCI Developed World ex-Australia Equity Index.
Our Corporate Governance Policy sets out our position on corporate governance issues such as proxy voting and engagement, as well as environmental and social issues. This Policy has been approved by both our Corporate Governance Committee and the Vinva Board of Directors. Our policy is designed to ensure that we vote proxies in the best interest of our clients. We take into account guidelines and standards of various groups, including the Australian Stock Exchange, the Australian Council of Superannuation Investors, the UK Corporate Governance Code and the ICGN Global Stewardship Principles. Our Policy will be reviewed regularly to ensure it remains relevant.
We use our best efforts to exercise our voting rights, however, in some circumstances it may be impractical or impossible for us to vote. For example, in international markets where share blocking applies we typically will not vote due to liquidity constraints. We will also not vote when manual voting via fax is required.Research and implementation
We receive proxy voting research reports for each meeting from Ownership Matters and CGI Glass Lewis for Australian meetings and Institutional Shareholder Services (ISS) globally. The implementation of voting is outsourced to ISS. Using ISS’ proxy voting solution allows Vinva to control our voting policy and final vote decisions while outsourcing the processing and management aspects of the process to a reliable partner. They receive clients’ proxy ballots, work with custodians, execute votes on clients’ behalf, maintain voting records and provide reporting to deliver a complete end-to-end solution.ENVIRONMENTAL AND SOCIAL ISSUES
Vinva considers the financial and economic implications of environmental and social issues and their impact on companies’ operational efficiency and financial performance. We systematically incorporate these factors into our investment process, collecting proprietary data on a number of environmental, social, governance and workplace factors (ESGW).
In the past there has generally been a stronger economic link between governance and future company performance. In relation to governance, we assess stocks based on multiple factors including board quality and experience, board independence, independence of the audit and remuneration committees, the quality of risk management systems, the quality of management and compensation policies.
Numeric ESGW scores for every stock are recorded in our production database on a daily basis and a full history of these scores is retained. We also collect data on other relevant ESGW issues as they arise over time. For example, in the past we have measured the potential impact on earnings around the introduction of an emissions trading scheme, the performance of firms around workplace safety issues and the level of employee turnover and engagement at different firms. ESGW factors can be used as either exposure controls or alpha factors in our investment process.
As a fiduciary to our clients, it is our responsibility to examine economically important ESGW issues. ESGW factors are treated no differently to any other investment insight, in that if there is a clear economic reason enabling them to forecast returns, and the market is not correctly pricing the factor, then we will add it to our suite of investment signals.
From a proxy voting perspective, the overall principle for voting on environmental and social proposals focuses on how the proposal may enhance or protect shareholder value in either the short-term or long-term.
We would encourage companies to consider whether they have a material exposure to climate change risk by reference to the recommendations of the Financial Stability Board’s Task Force on Climate- related Financial Disclosures (TCFD) and, if they do, to consider making the disclosures recommended by the TCFD.
A comprehensive record of voting will be provided on a quarterly and annual basis for pooled fund and individual mandates where we are requested to vote on behalf of clients. This report includes every resolution voted and records our reasoning for any vote AGAINST management. A more detailed proxy voting report (including analysis and outcomes of voting and any company engagement) will be provided half yearly. Aggregate voting statistics will be disclosed annually on our website as required by the Financial Services Council.
In addition to voting, Vinva will normally enter into dialogue with a company if we have concerns in relation to corporate governance, environmental and social issues. Engagement may be in the form of correspondence, phone calls or meetings.If you have any questions regarding this Policy or handling of information, please contact us as follows: