Our active ownership practices are governed by our stewardship policy and our Ownership policy & proxy voting guidelines. We also have a ‘how we engage’ document that provides further information on our engagement processes.
We believe that we should always act in our client’s best interest and, as such, engagement is used by the investment teams to reduce risk and add value. It naturally follows that we should use all rights available to us as shareholders to preserve and grow our client’s assets, including engagement with the companies in which we invest. Ninety One is, therefore, intent on playing a role in ensuring that the boards of those companies focus on the creation and preservation of sustainable value. This approach requires interaction between Ninety One (analyst, portfolio manager or ESG team) and company boards, particularly with the chairperson, the lead independent directors and company secretaries to support the ongoing objective of higher levels of accountability, transparency and sustainable performance.
Engagement is a process of diplomacy and research – more of an art than a science. There is no single approach that will fit all cases. We engage to improve transparency of information, accountability of boards and to preserve and encourage the creation of sustainable value.
Our engagements are categorised into strategic, collaborative, theme-based and proxy voting. The second quarter of the year is allocated predominantly to proxy voting engagements, while other engagements take place throughout the year, led by the ESG team and members of the investment team as required. All engagements are supported by appropriate analysts, portfolio managers and the ESG team.
Please see our ‘How we engage’ document that can be found on our website via the following URL:
We vote at shareholder meetings throughout the world as a matter of policy and principle. We believe that once we become investors, i.e. owners of a company, we assume a stewardship duty and have the responsibility to support or sanction.
Our ‘Ownership Principles and Proxy Voting guidelines’ establish our voting and engagement approach which will apply across all of our equity holdings. It is a comprehensive policy and not only informs how we vote with respect to all resolutions, but also informs both clients and investee companies on the position that we are likely to take with respect to the issues that are placed before us for approval.
We understand that some clients may have their own policies, which may differ from our policy. For clients invested in segregated portfolios we are able to put mechanisms in place to ensure adherence to client specific voting guidelines.
We consider the governance of a company, and by extension, its practical proxy voting application, through the lenses of four pillars. We have identified them as key for the successful running of companies, because they ensure the preservation and growth of the assets entrusted to us by our clients over the long term. They are:
(1) leadership and strategic governance (directors and the board);
(2) alignment with the long-term (remuneration and sustainability);
(3) protecting clients’ capital (share capital management);
(4) disclosure and transparency.
We use an external proxy research and vote execution service provided by Institutional Shareholder Services (ISS). ISS provide us with a service through which they deliver both their benchmark research and Ninety One’s custom policy research. The research is then discussed between the ESG team and the investment team ahead of the deadline, where the ESG team seeks to flag any issues and provide further insight. Where our policy and internal consideration determines that a dissenting vote is to be cast on a resolution or where we feel that we do not have sufficient information to cast an informed vote, we will often engage and raise our concerns with the company ahead of the voting deadline. This allows sufficient time to highlight and discuss concerns and to make amendments, when appropriate, to the voting decision. Once a unanimous decision is made, we submit our vote directly onto the ISS online voting platform. As standard, ISS receives the instructions from Ninety One and processes these with the different local sub custodians.
All voting decisions are logged via our research management system, Tamale. We record all communication, any engagement activity and the voting decision (including rationales for dissenting votes). All investment specialists have access to this information.
The proxy voting process is overseen by the Investment Governance Committee (IGC).