JPMAM retains ISS as its voting agent to implement the JPMorgan Asset Management voting policy, and uses research from ISS and Glass Lewis as an input in evaluating how a proxy should be voted. We have the ability to 'tag' certain votes in the ISS system, to allow them to be subject to extra scrutiny, for example if engagement is ongoing, or if the company has been flagged as an 'ESG outlier', or if an analyst or portfolio manager has requested it be reviewed in more detail. Certain votes or issues are flagged as 'refer' items, to allow extra scrutiny, for example mergers or acquisitions, or major disposals, or where we are considering a vote against management. A decision to vote against management or abstain, or to override the recommendations of our voting agent or our proxy voting policy, is always documented, along with a rationale for that decision. Depending on the market, except where a holding is de minimis, we endeavour to inform the company of our decision in advance, in order to give them the opportunity to discuss the issues with us prior to voting.
A decision to review a vote can be triggered by a pre-determined set of parameters requested from JPMAM from our service provider (size of holding, vote against management, or M&A or capital raising), or concerns from the analyst or portfolio manager, or where a company has been identified as an 'ESG outlier' or lagging its peers, or has been unresponsive in our request to engage. A decision to override our proxy voting policy, is documented, along with a rationale for that decision.
Overall responsibility for the formulation of voting policy rests with the applicable Proxy Committee or a Proxy Voting Working Group, whose role is to review JPMAM's corporate governance policy and practice in respect of investee companies, and to provide an escalation point for voting and corporate governance issues. The Committee is composed of senior analysts, portfolio managers and corporate governance specialists. Our proxy voting activity in the US and EMEA is audited by our independent auditor as part of the ISAE 3402 review, and oversight of our broader engagement process is also verified in accordance with AAF 01/06 as part of the monitoring stipulated by our UK investment trusts.