Voting

We believe judgement is a better guide to voting than a rules-based approach. Our voting policy is based on a frugal set of principles and key considerations that in our judgement are likely to be applicable to all companies in the vast majority of circumstances. However, we consider each voting exercise a bespoke process that should take into account the specific context, circumstances, dynamics and development of each company. 

We believe an overly-specific and overly-prescriptive approach to voting has drawbacks. First, it limits our ability to base our decisions on principles we cherish and to apply these principles to the circumstances of each company. Second, it overlooks that voting is often binary and blunt; it may only be possible to cast a single vote on matters that are often multi-faceted. Over-specifying requirements on each aspect of a remuneration policy is unnecessarily elaborate when we ultimately have to decide what our position is on balance.

If our engagement is effective there should be no need to vote against proposals, but we won’t vote in favour of things we disagree with if there is no commitment to change. In that sense a contrary vote is part of our wider engagement process, and we will follow up with companies to explain our reasoning in a more nuanced way than is possible through a binary yes/no ballot.

The types of issues we vote against most often include overly complex management remuneration packages, a reduction of minority shareholder rights, and director appointments where we don’t think the candidate has the right character or skills.