- Scope of our voting activities
As a responsible investor, Edmond de Rothschild Asset Management (France) takes its shareholder duties seriously. Voting at shareholder meetings is a key moment for taking part in companies’ decision-making.
Edmond de Rothschild Asset Management (France) has pledged to vote uniformly at shareholder meetings of all companies in which it holds shares and where the participation of Edmond de Rothschild Asset Management (France) represents more than 0.01% of the company’s capital, regardless of the nationality of issuing companies, as long as the issuer provides sufficient information and as long as its custodians are able to take its votes into account.
- Objectives of our voting activity
These principles befit the wealth-management focus with which Edmond de Rothschild Asset Management (France) manages its portfolios, its determination to safeguard fund-holder interests, and its constant quest for performance, with a view to long-term value creation.
- Correlation between our voting activities and, engagement and investment activities
Fund managers meet with company officers on a regular basis to discuss strategic, financial and extra-financial themes with them. These meetings are also an opportunity for fund managers to bring up shareholder meeting resolutions, in order to move the company towards better practices.
Edmond de Rothschild Asset Management (France)’s investment decisions are closely linked to the company’s long term prospects and require:
• the aim to deliver long-term value;
• deep understanding of economic and financial issues;
• concern for good governance;
• the development of a sound and stimulating work environment;
• efforts to reduce environmental footprint;
• equitable relations with stakeholders (e.g., clients, suppliers, civil partnership, etc.);
• management of sustainable development risks and opportunities.
To lead its voting rights activities, Edmond de Rothschild Asset Management (France) has set up an in-house Voting and Engagement Committee composed of the CEO, the Chief Investment Officer, Heads of the asset management expertise, the Chief Compliance and Internal Controls Officer, an SRI team manager, a middle office representative. The purpose of this committee, which meets at least twice a year, is to ensure adherence to the voting policy and to make changes in that policy, based on the resolutions that are submitted. At last, the voting statistics are also disclosed during the meetings.
- Differenciation of our voting approach between markets
Edmond de Rothschild Asset Management (France) has not set geographical limits for taking part in votes. The reason for this is that even when it holds only a small portion of total shares, voting allows Edmond de Rothschild Asset Management (France) to express its point of view and to show companies its commitment to impeccable corporate governance and, where applicable, to better practices on environmental, social and stakeholder issues.
The special case of lock-ups: A number of issuers in countries such as Switzerland, Norway, Morocco and Luxembourg block transactions on shares when the shareholder wishes to vote. The duration of this lock-up varies widely and depends on the issuer, depositary and sub-depositary and can last up to 10 days. Edmond de Rothschild Asset Management (France) votes at least 75% of its total position at shareholder meetings affected by such lock-ups, thus leaving the fund manager some room for manoeuvre.
Influence of local regulatory or other requirements on our voting approach: Edmond de Rothschild Asset Management (France) adapts its criteria to each country’s circumstances. In accordance with Article 314-100 of the General Rules of the French Financial Markets Authority, Edmond de Rothschild Asset Management (France) has set out within its voting policy how it exercises the voting rights embedded in shares held in all its portfolios.
Finally, note that Edmond de Rothschild Asset Management (France) adapts its criteria to each country’s circumstances. With this in mind, the percentage of independent directors required shall be lower for controlled companies. In accordance with Article 314-100 of the General Rules of the French Financial Markets Authority, Edmond de Rothschild Asset Management (France) has set out below how it exercises the voting rights embedded in shares held in all its portfolios.
- Our voting policy principles
To carry out its investment activity in a socially responsible manner, Edmond de Rothschild Asset Management (France) focuses on seven founding principles:
• Respect for shareholder rights and equal treatment of shareholders, as expressed in the principle of “one share, one vote”.
• Accounting integrity and continuity and transparency in reporting, as guaranteed by the independence of the statutory auditors.
• Separation of powers between company managers and members of the board of directors or supervisory board, in their role as supervising bodies.
• Transparency in compensation, through an independent compensations committee and variable compensation linked to specific performance targets.
• Allocation of earnings and use of shareholders’ funds in the interests of shareholders, particularly minority shareholders.
• The company’s strategic development with justified and equitable equity transactions.
• Enhanced management of environmental and social issues in conducting the company’s business and awareness of its responsibilities regarding ESG (Environmental, Social and Governance) risks.
- Our exercise of voting rights and record keeping
Edmond de Rothschild Asset Management (France)’s fund managers are the only persons to decide how to vote, in the sole interests of unit holders in their portfolios.
Managers' votes are electronically archived on the ISS proxy exchange platform. In addition, the votes generated automatically from the ISS’ proxy voting platform are reprocessed by Edmond de Rothschild Asset Management (France)’s teams to obtain coherent statistics with our voting perimeter, in compliance with the statistics required under Article 314-101 of the General Regulation of the French Financial Markets Authority.
For more details, please see the comments in LEA 18.