Any change we encourage companies to make through the exercise of voting rights or related engagement is intended to improve a company's long-term performance. Accordingly our voting decisions (i) favour proposals that in our view tend to maximise clients' long-term shareholder value; and (ii) are not influenced by conflicts of interest. These principles reflect our belief that sound corporate governance and effective management of social and environmental risks create a framework within which a company can be run in the interests of its shareholders.
As an overriding principle we have regard to the two main global governance standards (G20/OECD Principles of Corporate Governance (2015) and ICGN Global Corporate Governance Principles (2017)) when determining how to vote.
The G20/OECD Principles cover six main areas:
- Ensuring the basis for an effective corporate governance framework
- The rights and equitable treatment of shareholders and key ownership functions
- Institutional investors, stock markets, and other intermediaries
- The role of stakeholders in corporate governance
- Disclosure and transparency
- The responsibilities of the board Lombard Odier Investment Managers
The ICGN Principles cover eight main areas:
- Board role and responsibilities
- Leadership and independence
- Composition and appointment
- Corporate culture
- Risk oversight
- Reporting and audit
- Shareholder rights
We also use Institutional Shareholders Services (Europe) S.A. ("ISS") to provide operational, record-keeping, research and reporting services. ISS prepares written analysis and recommendation of each proxy vote, based on our custom voting guidelines.
Our voting falls into five broad categories (it being understood that in practice certain topics may not fall into any of those categories and will be dependent on the view of either the stewardship or portfolio management teams).
- Routine matters: Unless we determine otherwise in any particular case, the routine matters below are voted in accordance with our guiding principles, as determined by best market practices (audit, income distribution, amendment to Articles of Association, capital related resolutions, etc.)
- Predefined matters: Certain pre-identified matters will be voted on in accordance with predefined guidelines that we have notified to the Proxy Voting Service.
- Voting against a Company's Board: Certain Board-related topics, listed below, will be referred to the relevant portfolio management and stewardship team when the proposals are not aligned with our guiding principles (fixing the number of Directors and/or Auditors, eliminating Cumulative Voting, approving discharge of Management and Supervisory Board, electing Directors)
- Material events: Material events, including those below, will be systematically referred to the relevant portfolio management team for a voting decision: (merger agreement, reorganization/restructuring plan, joint venture agreement, plan of liquidation, spin-off agreement)
- Sustainability topics: Sustainability related topics, including those below, will be systematically referred to our Stewardship team for a voting decision: robust oversight structures around ESG issues, climate-related risks and opportunities (including: taking action to address climate change and to establish environmental/social issue board committee, genetically modified organisms (GMO), weapons related, and M&A activity when it involves sustainability issues)
In addition to the above five broad categories, certain matters will be referred to our Stewardship team when the Proxy Voting Service recommend to vote differently to our guiding principles. When we have an Active Engagement with a company, the vote will require input from the Head of Stewardship.
In line with our strong commitment to stewardship and transparency, from Q2 2020 we will disclose retrospectively our voting records on our website.
This information is reflective of our asset management activities.