In the framework of ESG integration criteria in our voting policy, we pay particularly attention on environmental, social and governance issues. Therefore we use the services of ISS ("Institutional Shareholder Services"), specialised in this area which conducts analysis and we follow their ISR's policy recommendations.
Our policy is in line with the principles established by the AFG ("Recommendations on Corporate Governance" by the French Association of Asset Management) on topics such as the separation of functions between the Chairman and the Chief Executive Officer, sufficient proportion of independent directors at the Board of Directors, existence of specialised committees (audit, earnings, etc.), non-accumulation of mandates, transparency of managers' remuneration, etc.
In accordance with the regulation, we establish an annual report detailing the conditions of the votes and the details of each decision is available to the shareholders. When portfolio management is delegated to another management company, the company must exercise its proper shareholders' voting rights policy and debrief us about its voting decisions.
Our voting policy covers Eurozone and applies to companies with market capitalization above to 350 million €.
Therefore, the actual perimeter of our voting policy is:
- Euro equities invested through investment vehicles managed by Rothschild Asset Management.
In order to ensure consistency with our ESG policy, we may use our voting rights for all other European equities held in our portfolios.
Furthermore, we reserve the right to exercise our voting rights in case of extraordinary events like:
- Defensive capital increase if the company is subject to a takeover bid.
- Investment manager’s decision.
- Client’s request – if the request is made in order to address an ESG need.
The rest of the world, Unites-States and Japan, and few European countries such as Denmark and Portugal are not included in our voting policy perimeter due to expensive costs linked to the necessary knowledge and analysis, and the execution process of voting rights in those countries.
We do not exercise voting rights if:
- Securities’ immobilization periods could interfere with day-to-day funds’ management and harm our clients’ interests
- Resolutions and recommendations are not transmitted and submitted in time for review to the investment management team
- Exercising our voting rights is too complex (access to information)
- A dedicated fund’s investor shares with us, the investment management company, its voting instructions for a particular universe
In order to detect, prevent and manage potential situations of conflict of interest that could impact investment management team’s free will, the Group has undertaken serious actions, such as:
- Chinese walls – between asset management and corporate investment activities
- Code of Conduct – established by our group’s Head of Compliance
- Declaration to the Head of Compliance – an internal procedure in order to protect our investment management team from any kind of pressure that could emerge from our investment bank
Any potential conflict of interest would be submitted to the Head of Compliance.