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BMO Global 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.

Our voting process uses a risk-based approach to achieve high quality voting while delivering comprehensive coverage of a wide portfolio of stocks. We deploy our specialist governance team on the most complex and sensitive cases, and work with our voting service provider to deliver voting on the more simple, routine votes through the careful and consistent application of detailed in-house voting policies.

Voters carry out daily and weekly vote audits to ensure that each step in the voting process is followed and that votes are cast in accordance with our policies. In the case of standard votes, our proxy voting advisor will cast the votes in accordance with the relevant BMO Global Asset Management governance policy with oversight from relevant individuals. 

Exceptions to the policy can be made, as follows:

If an institutional client instructs us to vote differently from our standard approach, we vote their securities as specifically requested and continue to follow our standard approach for our other clients.

In executing votes, where a company puts forward a strong case for not complying with our policy/guidelines, we consider this and adjust our vote if we believe the company is still acting in the best interests of shareholders.

When we become aware of any vote that presents a conflict of interest, we must vote in the best interests of our clients:

  • Voting at a client’s meeting: We could vote at a company meeting where the company is a client of, or has another type of business relationship with, BMO Financial Group. We manage this conflict by treating all our clients equally in our voting activities. We do not alter our position on a vote due to a business relationship that a company may have with BMO Financial Group. Unless an institutional client instructs us otherwise, we apply our CGG to all client portfolios in a manner that considers our clients’ respective investment objectives and best interests.
  • Voting at a BMO meeting (including meetings of investment funds that BMO Global Asset Management manages) or where BMO is a party: We could vote at a company meeting of Bank of Montreal, any of its affiliates, or an investment fund that BMO Global Asset Management manages. We could also vote at a company meeting relating to a corporate action (for example, a merger or acquisition) involving the company (or any of its affiliates) or a member of BMO Financial Group. We manage this conflict by using ISS as our proxy voting administrator, to auto-execute all relevant votes in accordance with the ISS proxy voting policy. ISS executes votes without our further guidance, except where we have specific instructions from a client. This can result, for example, in our votes not supporting specific resolutions at a company meeting of Bank of Montreal. However, for our investment funds that are subject to Canadian securities laws that hold securities of an affiliated investment fund, we will not vote the top fund’s holdings in the underlying fund. We may instead arrange for investors in the top fund to vote the securities of the underlying fund. In light of the cost and complexity in doing so, this is not our typical practice.
  • Voting at a meeting involving a BMO Global Asset Management officer, director or employee: We could vote at a company meeting where an officer, director or employee of BMO Global Asset Management is nominated for election or serves on the board of that company. We manage this conflict by using this and other BMO policies specifically relating to BMO employees with relationships with companies. For example, BMO’s Code of Conduct requires our employees to declare and disclose their outside business interests. In cases where there is a significant conflict, we may determine that it is inappropriate for such employees to direct the voting at meetings of certain companies in which our clients invest. We also manage this conflict the same way as we do for company meetings of Bank of Montreal: we use ISS, as our proxy voting administrator, to auto-execute the vote in accordance with the ISS proxy voting policy, without our further guidance, except where we have specific instructions from a client. 
  • Voting to favour one client over another: We could vote on a matter at a company meeting with a potential voting outcome that would favour one of our clients over another. We manage this conflict by treating all clients equally in our voting activities. Unless an institutional client instructs us otherwise, we apply our corporate governance guidelines to all client portfolios in a manner that considers our clients’ respective investment objectives and best interests. This could result in our voting on a matter the same way or differently for different clients.
  • Voting to favour one portfolio manager over another: We could vote at a company meeting where different BMO Global Asset Management portfolio managers prefer different voting outcomes. We manage this conflict by having an internal consultation process where portfolio managers can advocate for their views through our Proxy Working Group (PWG). Its members are experts in governance and sustainable investment within BMO Global Asset Management. The Global Investment Committee (GIC) oversees the PWG. The PWG and the GIC approve the corporate governance guidelines annually.

This internal consultation process allows divergent views to be considered, but does not occur at the expense of the best interest of our clients. We treat all clients equally in our voting activities. Unless an institutional client instructs us otherwise, we apply our guidelines to all client portfolios in a manner that considers our clients’ respective investment objectives and best interests. This could result in our voting on a matter the same way or differently for different clients.

12.3. Additional information.[Optional]


LEA 13. Percentage of voting recommendations reviewed

13.1. Of the voting recommendations that your service provider made in the reporting year, indicate the percentage reviewed by your organisation, giving reasons.

Percentage of voting recommendations your organisation reviewed

Reasons for review

13.2. Additional information [Optional]


LEA 14. Securities lending programme (Private)


LEA 15. Informing companies of the rationale of abstaining/voting against management (Not Completed)


LEA 16. Informing companies of the rationale of abstaining/voting against management (Not Completed)


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

17.3. Additional information. [Optional]


LEA 18. Proportion of ballot items that were for/against/abstentions (Not Completed)


LEA 19. Proportion of ballot items that were for/against/abstentions (Not Completed)


LEA 20. Shareholder resolutions (Private)


LEA 21. Examples of (proxy) voting activities (Not Completed)


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