Investment stewardship and proxy voting have become increasingly important for investors globally, both as tools for driving governance change, and as indicators of how investment fiduciaries are acting on increasingly relevant sustainability issues. Recent trends point to increasing investor support for resolutions addressing ESG concerns.
Our proxy voting efforts are led by our Stewardship team and executed in close collaboration with our Investment teams. We do not view proxy voting as an administrative requirement of stock ownership—rather we see it as another opportunity to engage with companies on important ESG issues on behalf of our clients. Our proxy voting initiatives have developed into a substantial part of our engagement process, in order to address the importance of supporting ESG-related resolutions. In fact, we have been recognized as one of the firms with the largest year-over-year increase in support of environmental and social proposals, in a Proxy Insight report on the analysis of asset managers with at least $100 billion in assets under management and voting at least 50 proposals each year.
The following examples represent stewardship-led engagements that resulted in positive outcomes on varying ESG issues. These engagements are a collaborative effort between our Stewardship and Investment teams.
Engagement on Governance
Over the course of multiple years, we engaged with an electrical equipment company on multiple
occasions to discuss broad governance issues. We consistently noted that the company had
sub-standard shareholder rights practices, including a supermajority vote requirement to amend
the company’s governing documents and to remove directors, and the inability for shareholders
to call a special meeting. We consider these to be fundamental shareholder rights and repeatedly
encouraged the company to consider changes to its governance structure. The company recently
announced that it would seek shareholder approval to amend its governing documents to
remove the supermajority vote provisions and allow shareholders to call special meetings.
Engagement on Diversity Disclosure
We believe that diversity is a vital component of a company’s long-term, sustainable success. Given the importance of diversity, and in preparation for the 2021 proxy season, we engaged with many companies in 2020 to discuss Diversity & Inclusion initiatives, including general disclosure on these initiatives. We utilized these engagements to encourage the disclosure of workforce diversity metrics consistent with data provided on EEO-1 reports or other comparable data. As part of this process, we engaged with a large manufacturing company, which committed to publishing its EEO-1 data, consistent with our engagement objectives.
Engagement on Gender Pay Gap
We frequently engage on issues of diversity, inclusion, and gender equity. As part of our response to recent shareholder proposals, we engaged with numerous technology and finance companies on the issue of gender equity and, more specifically, the gender pay gap. Throughout these engagements, we expressed our support for increased disclosure of broad diversity and inclusion initiatives. One of the companies involved was a large finance firm, which subsequently committed to increasing disclosure and agreed to disclose gender pay information.