The Fund’s Guidelines have been adopted, not only to provide guidance on voting practices to the Fund, its managers and portfolio companies, but also to guide other corporate engagements and policy initiatives that enhance long term value, and to articulate to the capital markets the Fund’s view on what constitutes best practices in corporate governance and ESG issues. Prior to adoption of these guidelines, the Fund’s Bureau of Corporate Governance conducts a review of the adequacy of the prior version of the Guidelines. This included reviewing a sample of the Fund’s 2018 and 2019 proxy votes; reviewing voting guidelines of its public fund peers; conducting a gap analysis comparing prior adopted Guidelines and ballot items topics from 2018-2019; reviewing the Fund’s voting trends on various ballot item topics; and reviewing relevant trends related to corporate governance, proxy statement disclosures, and shareholder proposals.
The Fund independently votes the proxies of domestic companies in which it holds public equity securities. Voting provides a direct means of influencing a company’s governance, risk management, and is an integral part of the Comptroller’s fiduciary duty to invest prudently and for the exclusive benefit of the System’s members, retirees, and beneficiaries. In the 2019 Proxy Season, the Fund cast 28,322 votes on ballot items at 3,273 domestic company meetings.
Proxy voting decisions are based on these Guidelines and reviews of available information relating to items on the ballot at each portfolio company’s annual and special meetings. The Fund analyzes a variety of materials from publicly available sources, including but not limited to U.S. Securities and Exchange Commission filings, analyst reports, relevant studies and materials from proponents and opponents of shareholder proposals, third-party independent perspectives and studies, and analyses from several corporate governance and ESG service providers. The Fund utilizes a vote management platform to vote its proxies. In accordance with the terms of its asset lending program, the Fund seeks to recall loaned domestic securities in order to facilitate the Fund’s ability to exercise its voting rights.