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Liontrust Investment Partners LLP

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

          The majority of our holdings adopt our in-house voting policy, with the exception of one investment team that adopt ISS recommended guidelines in 2 areas.
        

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 proxy voting policies apply to segregated clients who have delegated responsibility for voting on their holdings to Liontrust.  The primary purpose of an Investment Company is to create sustainable value for its shareowners. Our proxy voting policies are based on best practice globally. Our policies are updated at least annually, taking into account emerging issues and trends, the evolution of market standards, and regulatory changes. These policies considers market-specific recommended best practices, transparency, and disclosure when addressing issues such as board structure, director accountability, corporate governance standards, executive compensation, shareholder rights, corporate transactions, and social/environmental issues. We assess voting matters on a case-by-case basis, taking into account a company's circumstances but are guided by our over-arching principles on good corporate governance. We recognise that regulatory frameworks vary across markets and that corporate governance practices vary internationally and so will normally vote on specific issues in line with the proxy guidelines for the relevant market.

Where a proposal is inconsistent with our principles and guidelines, we will consider voting against the proposal.

  • Investment managers are responsible for disclosing any potential conflicts of interest relating to a proxy vote.
  • The Governance & Stewardship Manager is responsible for vote execution.
  • ISS is responsible for casting these votes in line with Liontrust's specific instructions.
  • The Governance & Stewardship Manager is responsible for ensuring that full and adequate records of proxy voting are retained, including the investment manager's rationale for voting. 

 

12.3. Additional information.[Optional]

Liontrust operate a global voting policy currently covering 34 markets, which guides our voting decisions across funds. 

We take a proportional approach to governance expectations and therefore we have put in place guidelines broken down by geographic region and market cap size. We recognise that a major global oil company should be held to a different standard to a small emerging market company although all companies are encouraged to follow the highest standards. Liontrust custom voting policies incorporate the following markets: 

United Kingdom (FTSE 350)  & Ireland (ISEQ20) - https://www.liontrust.co.uk/handlers/DownloadDocumentsHandler.lion?itemids=32aaacd1-cb0e-4266-a7c1-e385ce7aecbb 

Europe excl. UK & Ireland - https://www.liontrust.co.uk/handlers/DownloadDocumentsHandler.lion?itemids=cde9c087-1b3a-4c6c-b748-5c1d6c3f1b4e 

United States & Canada - https://www.liontrust.co.uk/handlers/DownloadDocumentsHandler.lion?itemids=ebbc2b0a-f306-495a-9ab3-3ff7a47a7f31

Rest of the World [Australia, Brazil, Cayman Islands, Hong Kong, India, Indonesia, Israel, Japan, Korea, Latin America, Malaysia, New Zealand, Philippines, Russia, Singapore, South Africa, South America, Taiwan, Thailand] and Emerging markets - https://www.liontrust.co.uk/handlers/DownloadDocumentsHandler.lion?itemids=f8b27ee6-062a-48b5-bebd-527459f1bec3  

Exceptions apply for small global capitalised companies including FTSE Small Cap and below/FTSE AIM and one of our investment teams who vote in line with the relevant ISS benchmark policy in 2 areas due to predominately being exposed to smaller companies. However, appropriate alerts are applied to notify all teams if there is a Special/Court meeting to ensure that all teams are consulted on the following proposals if there is a vote referring to:

Mergers & Acquisitions, 
Related Party Transactions, 
Mandatory Takeover Bid Waivers, 
Reincorporation Proposals, 
Shareholder Proposals, 
Other non-routine items/controversial items. 

Liontrust Corporate Governance & Proxy Voting Framework is available on our website at https://www.liontrust.co.uk/handlers/DownloadDocumentsHandler.lion?itemids=339d5a28-b280-4b79-bd1e-af2f7113d1c4 

 


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]

The Governance & Stewardship Manager reviews the majority of voting recommendations for all the reasons selected above. The Sustainable Investment team review vote recommendations for all their holdings. All investment teams review recommendations in relation to mergers & acquisitions; related party transactions; mandatory takeover bid waivers; reincorporation proposals; shareholder proposals and other non-routine items/controversial items. 

 


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]


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]

Liontrust publish quarterly reports for all holdings on our website.   

Q1, 2018 records are available at https://www.liontrust.co.uk/handlers/DownloadDocumentsHandler.lion?itemids=c0179d27-ea53-477e-9a82-c1bd8cca53e6

Q2, 2018 records are available at https://www.liontrust.co.uk/handlers/DownloadDocumentsHandler.lion?itemids=3c50a208-6a7b-4cd3-b2ab-737284eb9eaa

Q3, 2018 records are available at https://www.liontrust.co.uk/handlers/DownloadDocumentsHandler.lion?itemids=1a2d9d96-061b-4baa-bd81-d872cccacb88

Q4, 2018 records are available at https://www.liontrust.co.uk/handlers/DownloadDocumentsHandler.lion?itemids=e6da1399-047e-412c-8402-90284e713d33 

The Sustainable Investment team communicate with the majority of companies on how they vote, other investment teams and the Governance & Stewardship Manager communicate directly with companies on an ad-hoc basis  on the rationale for the abstention or the vote against management recommendations. 


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%)

98 %

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 2018, we voted at 594 AGMs/EGMs. 


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


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]

Where we believe that shareholder value is threatened or is not being realised, we will request that the board takes appropriate action. In most cases, a private dialogue with executive management, non-executive directors and company advisers is our preferred way to protect our clients' interests. We will also engage with the chairman of the board or the senior independent director where appropriate. If we receive an unsatisfactory response, we will assess to what extent this affects the overall investment decision. To protect our clients' assets, we would then look at options that might include publicly opposing management who refuse to act on our concerns or reducing our exposure or potential divestment.  


LEA 20. Shareholder resolutions (Private)


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


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