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Morphic Asset Management

PRI reporting framework 2019

You are in Direct - Listed Equity Active Ownership » (Proxy) voting and shareholder resolutions

(Proxy) voting and shareholder resolutions

LEA 12. Typical approach to (proxy) voting decisions

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

Approach

Based on

12.2. 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.

As a responsible investor, we believe that Environmental, Social and Governance (ESG) issues impact the value and reputation of entities in which we invest. We are committed to incorporate ESG standards into our voting criteria to act in the long-term interests of our clients as per our guidelines below:

  1. Act in the long-term interests of shareholders.
  2. Protect shareholders’ rights.
  3. Ensure independent, diverse and efficient board structure.
  4. Align incentive structures with long-term interests of stakeholders.
  5. Disclose accurate, adequate, and timely information.
  6. Ensure good environmental and social performance.

Voting decisions are based on the following considerations:

  • For: The proposed resolution reflects good practice and is in the shareholders’ long-term interest
  • Abstain: The proposal raises issues of concern for shareholders or lacks sufficient information
  • Against: The proposal is not acceptable and is not in the shareholders’ long-term interest

Voting & Decision Making Process

Morphic receives notices of general meetings from its portfolio companies through its custodians or the companies themselves.

Voting decisions are made by the Investment Team on a case by case basis based on the guidelines above. The joint CIO's have the final say on any voting decision.

All of our products have the same concentrated portfolio and therefore we have a relatively small number of voting decisions to take on an annual basis. There will be no exception to the application of the above policy. There will be no exceptions to the application of the above policy.

 

12.3. Additional information.[Optional]


LEA 13. Percentage of voting recommendations reviewed (Not Applicable)


LEA 14. Securities lending programme (Private)


LEA 15. Informing companies of the rationale of abstaining/voting against management

15.1. Indicate the proportion of votes where you or the service providers acting on your behalf have raised concerns with companies ahead of voting.

15.2. Indicate the reasons for raising your concerns with these companies ahead of voting.

15.3. Additional information. [Optional]

These issues are identified and communicated to the company's on a case-by-case basis.


LEA 16. Informing companies of the rationale of abstaining/voting against management

16.1. Indicate the proportion of votes participated in within the reporting year in which, you and/or the service provider(s) acting on your behalf, have communicated to companies the rationale for abstaining or voting against management recommendations.

16.2. Indicate the reasons your organisation would communicate to companies, the rationale for abstaining or voting against management recommendations.

16.3. In cases where your organisation does communicate the rationale for the abstention or the vote against management recommendations, indicate whether this rationale is made public.

16.4. Additional information. [Optional]

For the reporting period 2018 our voting decisions have been published publicly on a selective basis. Going forward all voting decisions will be published publicly on an annual basis provided that public disclosure does not compramise an ongoing engagement (e.g. collaborative engagement such as Climate Action 100+) where contributing investors will tend to agree a plan of action which may be compromised by public disclosure.


LEA 17. Percentage of (proxy) votes cast

17.1. 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%)

97 %

Specify the basis on which this percentage is calculated

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

17.3. Additional information. [Optional]

In one instance we were unable to vote because insufficient notice of the meeting was given such that our custodian could not recall securities on loan sufficiently quick enough.


LEA 18. Proportion of ballot items that were for/against/abstentions

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

18.2. 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
99 %
Against (opposing) management recommendations
1 %
Abstentions
0 %
100%

18.3. In cases where your organisation voted against management recommendations, indicate the percentage of companies you have engaged.

100

18.4. Additional information. [Optional]


LEA 19. Proportion of ballot items that were for/against/abstentions

19.1. Indicate whether your organisation has a formal escalation strategy following unsuccessful voting.

19.2. Indicate the escalation strategies used at your organisation following abstentions and/or votes against management.

19.3. Additional information. [Optional]


LEA 20. Shareholder resolutions (Private)


LEA 21. Examples of (proxy) voting activities (Private)


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