We believe judgement is a better guide to voting than a rules-based approach. Our voting policy is based on a parsimonious 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 proxy 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.
Overarching principle: We vote every item on a case-by-case basis and with no pre-defined policy on how to vote certain events or issues.
We aim to: Use the voice that voting gives us ambitiously and positively, and to vote against proposals which in our judgement are likely to undermine positive outcomes.
Our investment philosophy is suggestive of certain points of principle that voting decisions should aim to embody and reinforce. We therefore support proposals that in our judgement are likely to:
- Encourage long-term decision-making
- Promote exceptional company cultures, strong franchises and resilient financials
- Encourage companies to contribute to a more sustainable future.
To bring about a more sustainable future, we support proposals that in our judgement are likely to:
- Promote sustainable development and responsible business practices
- Improve board and staff diversity
- Improve the quality of disclosure and reporting.
Our voting decisions on remuneration awards and policies are based on careful consideration of the following questions:
- Is the remuneration policy reasonable and simple?
- Is remuneration linked to long-term performance and is it helping promote long-term stewardship?
- Is the policy likely to result in excessive pay awards?
Our voting decisions on boards are based on careful consideration of the following questions:
- Does the board discharge its duties in the long-term interests of the company?
- Does the board strive for diversity of experience, skills, thought and opinion?
- Does the board have a functioning process to refresh and renew itself?
We recognise all auditing firms are imperfect, and that replacing one with another will not in and of itself result in a higher standard of auditing. We also recognise that long-term relationships may enable auditing firms to gain a good understanding of how companies operate and how they have evolved. However, we believe the risks of over-familiarity and complacency are significant enough that we vote against the appointment of auditors whose tenure exceeds 10 years of continuous service.
Procedures and process
- For every contentious proposal that comes up for a vote, we aim to engage with the company and seek to better understand the rationale and possible long-term implications of the proposal.
- If we decide to vote against a board recommendation, we explain in simple terms the rationale for our decision. This explanation is published on our website.
- If we decide to vote against a board recommendation, we explain our decision to the company verbally or in writing or both, and we decide any relevant engagement actions we may want to pursue with the company.
- We review our policy guidelines once a year, to stay fresh and to incorporate recent experience.
View our company policies for the Stewart Investors Stewardship and Corporate Engagement Disclosure Statement.
View our list of investment terms to help you understand the terminology within this document.
This material is for general information purposes only. It does not constitute investment or financial advice and does not take into account any specific investment objectives, financial situation or needs. This is not an offer to provide asset management services, is not a recommendation or an offer or solicitation to buy, hold or sell any security or to execute any agreement for portfolio management or investment advisory services and this material has not been prepared in connection with any such offer. Before making any investment decision you should conduct your own due diligence and consider your individual investment needs, objectives and financial situation and read the relevant offering documents for details including the risk factors disclosure. Any person who acts upon, or changes their investment position in reliance on, the information contained in these materials does so entirely at their own risk.
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Past performance is not indicative of future performance. All investment involves risks and the value of investments and the income from them may go down as well as up and you may not get back your original investment. Actual outcomes or results may differ materially from those discussed. Readers must not place undue reliance on forward-looking statements as there is no certainty that conditions current at the time of publication will continue.
References to specific securities (if any) are included for the purpose of illustration only and should not be construed as a recommendation to buy or sell the same. Any securities referenced may or may not form part of the holdings of First Sentier Investors' portfolios at a certain point in time, and the holdings may change over time.
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About First Sentier Investors
References to ‘we’, ‘us’ or ‘our’ are references to First Sentier Investors, a global asset management business which is ultimately owned by Mitsubishi UFJ Financial Group, Inc (MUFG). Our investment team operates under the trading name of Stewart Investors which is part of the First Sentier Investors Group.
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