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BNP Paribas Asset Management

PRI reporting framework 2020

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(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 that your agreed-upon voting policy is adhered to, giving details of your approach when exceptions to the policy are made.

GOVERNANCE AND VOTING PRINCIPLES

We believe that good corporate governance provides a good foundation framework to ensure that a corporation is managed in the long-term interest of its shareholders. Therefore BNP Paribas AM expects all corporations in which it invests to comply with high corporate governance standards.

Voting at annual general meetings is a key component of the ongoing dialogue with companies in which we invest on behalf of our clients and forms an integral part of BNP Paribas AM's investment process. We are committed to ensure the consistent exercising of voting rights associated with shares held in Undertakings for the Collective Investment of Transferable Securities (UCITS), Alternative Investment Funds (AIF), foreign investment funds and investment mandates, where proxy voting has been delegated to us.

Our document "Governance and voting policy" explains what we expect of public companies and how we carry out our ownership responsibilities.

The policy outlines our key governance and voting principles, describes our proxy voting process, and sets out guidelines that highlight, for each item, both best practices and any issues that may trigger an "oppose" or "abstain" vote.

In applying our voting guidelines, we take into account specific circumstances as they relate to individual companies. Our policy and guidelines are reviewed annually in order to reflect the evolution of corporate governance codes and market practices

 

 

12.3. Additional information.[Optional]

Our policy and guidelines are reviewed annually in order to reflect the evolution of corporate governance codes and market practices. The main amendments to our policy for 2019 were:

• Incorporation of components related to the Global Sustainability Strategy (GSS), in terms of engagement as well as voting policy;

• Introduction of rules regarding gender diversity at board level: vote against the entire board in absence of any female board member;

• Reinforcement of our commitment to good governance by opposing Chief Executive Officers also serving as Chair. Combined roles can be accepted only in temporary situations (less than 2 years) and for family-controlled companies in case of a Chair/CEO independent from the controlling family;

• Application of a higher standards for board election in North America by requiring 2/3 of board independence and full independence on key committees.

• Alignment of the voting policy on compensation in North America with the European approach especially by systematically requiring performance conditions to long-term incentive plans.


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 participated in within the reporting year in which where you or the service providers acting on your behalf 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 where you, and/or the service provider(s) acting on your behalf, communicated the rationale to companies for abstaining or voting against management recommendations. Indicate this as a percentage out of all eligible votes.

16.2. Indicate the reasons why 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 abstaining or voting against management recommendations, indicate whether this rationale is made public.

16.4. Additional information. [Optional]


LEA 17. Percentage of (proxy) votes cast

17.1. For listed equities in which you 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%)

90 %

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]

We do not vote on 100% of our holdings as it would imply:

  • An increase in the costs of proxy voting for clients; and
  • A need to outsource a greater added-value part of the voting activity, which would reduce the qualitative and committed aspects of our voting process.

Our voting scope covers companies for which our aggregated holding positions meet at least one of the three following conditions:

  • Represents 90% of  our aggregated stock positions
  • Represents 0,1% or more of the company’s market capitalization 
  • Ad hoc demand or local market regulations

The choices of the shares for which we exercise voting rights aim at both concentrating our efforts on positions held in a wide proportion of our assets under management, and participating in shareholders' meetings of companies in which our collective investment schemes hold a significant part of the capital.


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

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

18.2. Of the voting instructions that you and/or third parties on your behalf have issued, indicate the proportion of ballot items that were:

Voting instructions
Breakdown as percentage of votes cast
For (supporting) management recommendations
72.2 %
Against (opposing) management recommendations
24.1 %
Abstentions
3.7 %
100%

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

9

18.4. Additional information. [Optional]

Dialogues with companies can be opened at our own initiative or on the request of the issuer, and are concentrated on our main positions in terms of assets or where we hold a significant portion of the share capital.

We cannot engage with all companies in which we voted against an item due to our strict policy that is reflected with a high level of dissent: Under our voting scope, we voted at a total of 1,758 general meetings and we voted against or abstain for at least one item at 1,408 general meetings (i.e. 80%) which is a high number of oppositions compared to peers.

In 2019, we engaged with up to 9% of companies in which we could have expressed an opposition on at least one agenda item.

These dialogues are systematically conducted with companies held by our active managers and included in the main French index (CAC 40) or if we are one of the largest shareholders. Outside of this group, dialogues are mainly focused on AGMs that represent important governance or financial stakes.

 


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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