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Vontobel Holding AG

PRI reporting framework 2017

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(Proxy) voting and shareholder resolutions

Overview

LEA 17. Voting policy & approach

New selection options have been added to this indicator. Please review your prefilled responses carefully.

17.1. Indicate whether your organisation has a formal voting policy.

17.2. Indicate what your voting policy covers:

17.4. Provide a brief overview of your organization’s approach to (proxy) voting.

From our policy: The fund management company (FMC) exercises the membership and creditors' rights associated with the investments of the sub funds it manages independently and exclusively in the interest of investors. The FMC will, upon request, provide investors with information on the exercise of membership and creditors' rights.

Re. filing: Engagement measures are usually only considered in a fund where the voting rights are actively exercised. The FMC or the voting rights advisor shall draft a written engagement recommendation which sets out the reasons why this is in the interest of the investors.

This recommendation must be in line with the written voting rights or engagement policy of the FMC or the voting rights advisor. The voting rights or engagement policy must be approved by the Executive Management of Vontobel Fonds Services AG (Management Company for CH Fonds). If the FMC/voting rights advisor presents the engagement measures to the company orally, he must be advised of the limits of his representation. If the engagement recommendation of the FMC/voting rights advisor is not followed, he and the promoter, if one is provided for, shall be informed immediately. In these cases, no engagement is undertaken.

17.5. Provide an overview of how you ensure your voting policy is adhered to, giving details of your approach when exceptions to the policy are made (if applicable).

Ethos is our proxy advisor for the Ethos and Raiffeisen funds. HEOS is our proxy advisor for all Vontobel sustainable funds and selected thematic funds.

Securities lending is not part of the above-mentioned voting policy but governed by internal procedures.

More information about Hermes EOS:

Hermes EOS undertakes intelligent voting on our behalf according to our own proxy voting policy. This means that all proxies are voted in line with the individual circumstances of the company and the vote, rather than using a box-ticking approach or as a compliance driven activity. The vote is viewed as an annual governance health check and voting work is strongly linked with corporate engagement. The vote is not perceived as an end in itself but rather as a mechanism which precipitates further change where required. Hermes EOS files shareholder proposals in markets where it is relevant to do so, typically in Germany and the US, either as lead filer or as co-filer alongside other investors. Consistent with its intelligent voting approach, this typically forms part of a wider engagement with the company and is used as a tool for leverage in its dialogue with management. Where, in accordance with its policies, Hermes EOS has executed a vote against management on large holdings or otherwise high-profile companies, it seeks to follow up with the company either in writing to explain the reasons giving rise to a vote against and the steps that it would like to see the company take to rectify the issue. As necessary, Hermes EOS will look to engage with the company before the meeting to ensure that the issue giving rise to the vote against is addressed so that it can vote in line with management’s recommendation, a vote ‘for’ management ‘by exception,’ in subsequent years. It may look to vote against management in a number of different scenarios. While it is difficult to provide a general description, typically this will be where a vote with management would not serve the best long-term interests of shareholders. This may be either in terms of remuneration or where there are insufficient skills on the board to take the company forward.
There may also be specific instances where a vote in favour of management would be actively detrimental to the company, for example in the case of a merger or acquisition. Hermes EOS rarely abstains on votes. In the very rare instances that it does consider abstaining, this may be because it is unable to vote with management – typically due to inadequate information being provided – but where a vote against management may appear unduly harsh. Hermes EOS always seeks to obtain the required information to make an informed voting decision but this may not always be possible.


Process

LEA 18. Typical approach to (proxy) voting decisions

18.1. Indicate how you typically make your (proxy) voting decisions.

Approach

Based on

18.2. Additional information.[Optional]

For HEOS and Ethos, we apply the service provider voting policy which we have signed off on. The fund management company receives research from HEOS and Ethos and is able to intervene and vote differently, in the event that it is appropriate to do so.

Hermes EOS provides us with voting recommendations based on our voting policy which are input on the voting platform prior to the vote deadline. The voting recommendations are then cast as voting instructions if there is no further intervention, except in the case of shareblocking votes.


LEA 19. Percentage of voting recommendations reviewed (Not Applicable)


LEA 20. Confirmation of votes (Private)


LEA 21. Securities lending programme (Private)


LEA 22. Informing companies of the rationale of abstaining/voting against management

New selection options have been added to this indicator. Please review your prefilled responses carefully.

22.1. Indicate whether you or the service providers acting on your behalf raise any concerns with companies ahead of voting

22.2. Indicate whether you and/or the service provider(s) acting on your behalf, communicate the rationale to companies, when , you abstain or vote against management recommendations.

22.3. Additional information. [Optional]

We choose service providers with high quality standards. They usually lead the dialogue with companies where they recommend voting against management recommendations.


Outputs and outcomes

LEA 23. Percentage of (proxy) votes cast

23.1. For listed equities where you and/or your service provider have the mandate to issue (proxy) voting instructions, indicate the percentage of votes cast during the reporting year.

Votes cast (to the nearest 1%)

100 %

Specify the basis on which this percentage is calculated

23.2. Explain your reason(s) for not voting certain holdings

          technical reasons
        

23.3. Additional information. [Optional]

Our service provider Hermes EOS submits vote recommendations on all ballots available to vote in the portfolios for which we have subscribed to their proxy voting service.


LEA 24. Proportion of ballot items that were for/against/abstentions

24.1. Indicate if you track the voting instructions that you and/or your service provider on your behalf have issued.

24.2. Of the voting instructions that you and/or third parties on your behalf issued, indicate the proportion of ballot items that were:

Voting instructions
Breakdown as percentage of votes cast
For (supporting) management recommendations
91 %
Against (opposing) management recommendations
9 %
Abstentions
0 %
100%

24.3. Describe the actions you take after voting against management recommendations.

          See LEA 24.4 for more Information.
        

24.4. Additional information. [Optional]

Hermes EOS undertakes intelligent voting on our behalf according to our own proxy voting policy. This means that all proxies are voted in line with the individual circumstances of the company and the vote, rather than using a box-ticking approach or as a compliance driven activity. The vote is viewed as an annual governance health check and voting work is strongly linked with corporate engagement. The vote is not perceived as an end in itself but rather as a mechanism which precipitates further change where required. Hermes EOS files shareholder proposals in markets where it is relevant to do so, typically in Germany and the US, either as lead filer or as co-filer alongside other investors. Consistent with its intelligent voting approach, this typically forms part of a wider engagement with the company and is used as a tool for leverage in its dialogue with management. Where, in accordance with its policies, Hermes EOS has executed a vote against management on large holdings or otherwise high-profile companies, it seeks to follow up with the company either in writing to explain the reasons giving rise to a vote against and the steps that it would like to see the company take to rectify the issue. As necessary, Hermes EOS will look to engage with the company before the meeting to ensure that the issue giving rise to the vote against is addressed so that it can vote in line with management’s recommendation, a vote ‘for’ management ‘by exception,’ in subsequent years. It may look to vote against management in a number of different scenarios. While it is difficult to provide a general description, typically this will be where a vote with management would not serve the best long-term interests of shareholders. This may be either in terms of remuneration or where there are insufficient skills on the board to take the company forward.
There may also be specific instances where a vote in favour of management would be actively detrimental to the company, for example in the case of a merger or acquisition. Hermes EOS rarely abstains on votes. In the very rare instances that it does consider abstaining, this may be because it is unable to vote with management – typically due to inadequate information being provided – but where a vote against management may appear unduly harsh. Hermes EOS always seeks to obtain the required information to make an informed voting decision but this may not always be possible.


LEA 25. Shareholder resolutions (Private)


LEA 26. Examples of (proxy) voting activities (Private)


Communication

LEA 27. Disclosing voting activities

27.1. Indicate if your organisation proactively discloses information on your voting activities.

27.2. Indicate if the information disclosed to the public is the same as that disclosed to clients/beneficiaries.

27.3. Indicate the voting information your organisation proactively discloses to the public and/or to clients/beneficiaries.

Indicate how much of your voting record you disclose

Indicate what level of explanation you provide

27.4. Indicate how frequently you typically report voting information.

27.8. Additional information. [Optional]

Our Sustainable Investing Boutique discloses information on voting activities to clients / beneficiaries only.


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