Voting is integral to stewardship because it allows shareholders to hold company boards and management to account for their performance. When we vote against (or withhold support for) company proposals or vote in favour of shareholder proposals, we do so to signal our concerns about corporate governance and environmental or social behaviours.
Our clients and the public are increasingly focused on investor votes and their outcomes to ensure that asset managers are delivering on their stewardship responsibilities. Reporting on votes is therefore key for everyone involved.
With this in mind, the UK Financial Conduct Authority (FCA) has published Vote reporting: A Consultation and Discussion Paper from the Vote Reporting Group and invited responses.
The Vote Reporting Group was set up in November 2022 to develop proposals to enhance vote reporting by asset managers operating in the UK. It includes members of the investment community, investor associations and proxy service providers. The FCA acted as the secretariat of the group and is coordinating the consultation process, which closes on 21 September 2023.
Sarasin & Partners LLP’s submission to the consultation can be found here.
We support the Vote Reporting Group’s objective of creating a consolidated and uniform vote reporting template that all asset managers could use. We also support its key proposals, including:
- Single-level classification of resolutions.
- Additional classification of rationales and ranking of rationales as primary or secondary.
- Rules governing when rationales should be disclosed. We suggest they should be provided when investors vote against management proposals or vote on shareholder proposals.
- Linking voting to ongoing engagements on relevant matters, but avoiding excessive detail, such as whether an engagement was collaborative and the communication level. We believe this information should be reported separately.
- Leaving ‘significant votes’ undefined because it is unclear what criteria could be used to define them.
- Quarterly vote reporting.
- The establishment of a public registry of votes under an independent body.
We also believe that proxy voting service providers will need to align their platforms and reporting with any final proposals to enable investors to deliver the required information.
Important information
If you are a private investor, you should not act or rely on this document but should contact your professional adviser.
This document has been approved by Sarasin & Partners LLP of Juxon House, 100 St Paul’s Churchyard, London, EC4M 8BU, a limited liability partnership registered in England & Wales with registered number OC329859 which is authorised and regulated by the Financial Conduct Authority with firm reference number 475111.
It has been prepared solely for information purposes and is not a solicitation, or an offer to buy or sell any security. The information on which the document is based has been obtained from sources that we believe to be reliable, and in good faith, but we have not independently verified such information and no representation or warranty, express or implied, is made as to their accuracy. All expressions of opinion are subject to change without notice.
Please note that the prices of shares and the income from them can fall as well as rise and you may not get back the amount originally invested. This can be as a result of market movements and also of variations in the exchange rates between currencies. Past performance is not a reliable guide to future returns and may not be repeated.
Neither Sarasin & Partners LLP nor any other member of the J. Safra Sarasin Holding Ltd group accepts any liability or responsibility whatsoever for any consequential loss of any kind arising out of the use of this document or any part of its contents. The use of this document should not be regarded as a substitute for the exercise by the recipient of his or her own judgement. Sarasin & Partners LLP and/or any person connected with it may act upon or make use of the material referred to herein and/or any of the information upon which it is based, prior to publication of this document.
© 2023 Sarasin & Partners LLP – all rights reserved. This document can only be distributed or reproduced with permission from Sarasin & Partners LLP.