it is our duty on behalf of our clients to vote their proxy, or advise on the exercising of proxy votes, when the investments in their portfolios are entitled to do so. Ellerston’s policy is to always vote in the best interests of the client’s investments in the portfolios that we manage on their behalf. All voting decisions and rationales, where required, are tracked by our back office to ensure that we have voted on all resolutions. If we have erroneously failed to vote, we are required to report, investigate and follow up in accordance with the Ellerston Capital Breaches and Incidents Policy.
The Ellerston Proxy Voting Policy is publically available at the following link:
This policy sets out our approach to proxy voting in the context of corporate governance principles, the investment management process and client service responsibilities, the key aspects beign as follows:
The Chief Investment Officer (CIO) is responsible for the implementation of this Policy.
The Head of ESG will oversee voting, the documentation of voting decisions and the annual publication of the proxy voting records for the prior financial year.
This policy is reviewed as part of the annual review of the Ellerston Responsible Investment Policy.
As a Responsible Investor, we believe that Environmental, Social and Governance (ESG) issues can impact the value of entities in which we invest. We are committed to incorporate ESG standards into our voting criteria to act in the long-term interests of our clients taking into account, but not limited to, the guidelines below:
- Act in the long-term interests of shareholders.
- Protect shareholders’ rights.
- Ensure independent, diverse and efficient governance structures (Boards of Directors, Advisory Boards etc.).
- Align incentive structures with long-term interests of stakeholders.
- Disclose accurate, adequate, and timely information.
- Ensure good environmental and social performance.
Voting decisions (or recommendations) reflect the following opinion:
For: The proposed resolution reflects good practice and is in the shareholders’ long-term interest
Abstain: The proposed resolution raises issues of concern for shareholders or lacks sufficient information
Against: The proposed resolution is not acceptable and is not in the shareholders’ long-term interest
In the event that we vote on a resolution in opposition to the management recommendation, we will attempt to engage with the Company ahead of the shareholder meeting in order to communicate our voting intention and explain our rational for opposing the management recommendation.
Proxy Voting Process
Ellerston receives notices of shareholder meetings from its portfolio companies through its custodians or the companies themselves. Our analysts and portfolio managers will form a view on the items to be voted upon with the voting decisions being made on a case-by-case basis based on the guidelines above.
Where Ellerston has discretion under its agreement with the client, as a general rule, Ellerston will not seek direction from the client prior to it exercising a vote or initiating relevant company engagement to address individual issues. However, Ellerston may from time-to-time consult with clients on particular issues. Clients may require our proxy voting to follow the recommendations of third party Proxy Advisors, or may direct Ellerston to vote on specific issues, and we will implement that direction to the extent we are able to do so.
It may be the case that we attend shareholder meetings and vote our clients proxies in person.
Disclosure and Transparency
Consistent with our commitment and responsibilities related to PRI and, where relevant, product certification bodies such as the Responsible Investment Association of Australasia (RIAA), our policy is to provide full transparency on our proxy voting on an annual basis.
No later than three months after the close of each financial year, Ellerston will publish on its website a summary of its proxy voting activities for the previous financial year providing the details below:
- The name of the entity and the country in which it is listed
- The Stock Exchange code of the relevant interests or securities
- The meeting date and meeting type
- A brief identification of the matter or matters (proposals) to be voted on at the meeting
- Whether the matter or matters voted on were proposed by the issuer, its management or another person or company
- The Management recommendation
- Whether Ellerston voted, or advised, on the matter or matters
- How Ellerston voted, or advised, on the matter or matters
- In the case of a decision to vote against any matter, a record reflecting the reason for that decision