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Legal & General Investment Management (Holdings)

PRI reporting framework 2018

Export Public Responses

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LEA 16. Typical approach to (proxy) voting decisions

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


Based on

16.2. 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).

To ensure our proxy provider votes in accordance with our position on ESG, we have put in place a minimum standards custom voting policy with specific voting instructions. These instructions apply to all markets globally and seek to uphold what we consider are minimum best practice standards which we believe all companies globally should observe, irrespective of local regulation or practice. For all other issues not covered by our minimum standards, we defer to the decisions to our voting information provider.

In addition, we have also set specific custom voting policies at market level for markets which we adopt a stricter stance on. All our custom voting policies are developed in accordance with our publicly disclosed position on ESG in our Principles document and country specific policies.

Note that we retain the ability in all markets to over-ride the decisions taken by the service provider. This may happen where engagement with a specific company has provided additional information (for example from direct engagement, or explanation in the annual report) that allows us to apply our own voting judgement. For example, it is our policy to oppose the election or re-election of the Board Chair of a FTSE 100 company if they are less than 25% women on the board. We overrode our own policy at eEasyJet’s 2017 AGM in relation to gender diversity on the Board. The company had previously exceeded our 25% target of female representation on the board, however this changed when a non-executive director stepped down from the board four months before the AGM; we therefore took the circumstances into account and decided to support the re-election of the Board Chair.

In addition, LGIM has strict monitoring controls to ensure our votes fully and effectively executed in accordance with our voting policies by our service provider. This includes a regular manual check of the votes input into the platform, and an electronic alert service to inform us of rejected votes which require further action.

We hold quarterly diligence meetings with our voting service provider. Representatives from a range of departments attend these meetings, including the client relationship manager, research manager and custom voting manager. The meetings have a standing agenda, which includes setting out our expectations, an analysis of any issues we have experienced when voting during the previous quarter, and a review of the effectiveness of the monitoring process and voting statistics. The meetings will also review any action points arising from the previous quarterly meeting.

Additionally, on an annual basis the Director of Corporate Governance must certify on LGIM’s internal risk management system that our voting service provider have the capacity and competency to analyse proxy issues and make impartial recommendations.

Our voting process is internally audited and additionally, LGIM obtains a biannual independent assurance of its stewardship and voting processes, in-line with the AAF01/06 framework.

16.3. Additional information.[Optional]

As mentioned in question LEA 15.4, all voting and engagement decisions are made by LGIM and we do not outsource any part of strategic decisions. Our overriding policy is that our voting decisions are based on an independent house view. We cast proxy votes in a manner consistent with the best interests of all our clients. Our use of service provider recommendations is purely to augment our own research and proprietary ESG tools. Note that we use other third-party research to inform our vote decisions  such as broker research and ESG reports. Final decision is made by the corporate governance team.

The corporate governance team operates independently from the investment teams, allowing us to take a long-term view in the interests of all clients. We believe we will achieve our mutual goals most efficiently and effectively by having one strong voice, that represents the interests of all our end clients' assets.

Each member of the team is allocated a specific sector and/or region so that the voting is undertaken by the same individuals who engage with the company. This ensures our stewardship approach flows smoothly throughout the engagement and voting process and engagement is fully integrated into the vote decision process and that we send consistent messaging to companies. Contentious voting issues are overseen at a weekly team meeting, chaired by the Director of Corporate Governance. This provides an opportunity to discuss contentious, non-standard resolutions and potential conflicts.

The corporate governance team works in coordination with investment and client teams. Where different views arise, our conflicts of interests policy may be activated so we can operate independently from portfolio managers. Where necessary, matters arising from this meeting can be escalated to the LGIM CEO and, under the Conflicts of Interest policy (, to LGIM’s non-executive directors. It is important to note that it is extremely rare for the active portfolio managers to disagree with the decisions of the corporate governance team. In over 20 years of experience, it has only occurred in a handful of cases.

LEA 17. Percentage of voting recommendations reviewed (Not Applicable)

LEA 18. Confirmation of votes (Private)

LEA 19. Securities lending programme

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

19.1. Indicate if your organisation has a securities lending programme.

19.3. Indicate how voting is addressed in your securities lending programme.

LEA 20. 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.

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

20.2. 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.

20.3. Additional information. [Optional]

We communicate our votes in advance of shareholder meetings in the following cases only:

  • Escalation of engagement

Where engagement does not produce satisfactory results, we escalate our position and may decide to make our voting decision public prior to the shareholder meeting. We find this is an efficient way for us to draw public attention to our concerns.

  • As part of a specific engagement programme

LGIM’s Climate Impact Pledge is a public engagement programme on climate change. After one year of engagement, if companies fail to meet LGIM’s minimum expectations, for all funds LGIM manages where we are unable to contractually divest, we will vote against the chair of the board of the same companies. We are aiming to make the list of companies public. This will involve disclosing our vote intention for some, if not all of them, prior to their shareholder meeting.

After shareholder meetings, we publicly disclose all our votes for the major markets on our website in our monthly voting reports. These reports also now include our vote rationales for all our votes against management.  This allows companies and other stakeholders to be informed of our voting decisions and the reasons for our votes against.

These reports are available at: