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Coronation Fund Managers

PRI reporting framework 2020

You are in Direct - Listed Equity Active Ownership » (Proxy) voting and shareholder resolutions

(Proxy) voting and shareholder resolutions

LEA 12. Typical approach to (proxy) voting decisions

12.1. Indicate how you typically make your (proxy) voting decisions.

Approach

Based on

12.2. Provide an overview of how you ensure that your agreed-upon voting policy is adhered to, giving details of your approach when exceptions to the policy are made.

Coronation considers and votes on all proxies for all companies in which we hold shares on behalf of our clients. Unless explicitly requested to do so by our segregated clients, we do not outsource any aspect of our proxy voting to third party advisors or service providers.

Except in certain exceptional circumstances, Coronation’s votes, on behalf of its clients, are not committed in advance and unconditionally to third parties and are not placed in voting pools that bind the clients to predetermined voting positions or obliges clients to follow the “common” consensus in voting.

Coronation’s voting process is as follows:

  • The AGM or General Meeting Notice is received by our Implementation Team: Resolution details are captured into the voting system and allocated to the relevant research analyst. Research analyst reviews required resolutions and performs appropriate analysis and engagement to finalize conclusions on voting. Adequate research is critical to ensure Coronation is adequately informed when examining resolutions.
  • The research analyst will engage with the senior members of the team at this stage, as required, and, if necessary, we will engage with the relevant company senior executives to understand the motivation for resolutions or more detail on specific resolutions.
  • Votes are recorded on the system which generates a report to the Chief Investment Officer and heads of research. At this stage, clients that wish to vote their own shares or have special interests are advised of our recommendation.
  • Investee company is informed of any “No” votes and abstentions. In instances where Coronation decides to vote against management or abstain, the decision will be communicated to the management of the investee company together with an explanation for our decision with a view to persuading management, wherever possible, to withdraw or redraft the resolution. Abstentions should be avoided where possible as it is effectively a spoilt vote. We will only abstain where insufficient evidence or work is available to justify a conclusive yes or no vote.
  • Unusual or contentious issues or proposals not considered to be in the interests of shareholders, as well as any resolutions an analyst proposes to vote “Against” or “Abstain”, must be discussed with the Chief Investment Officer and other senior investment managers well in advance of voting. In addition, as a secondary check, if an analyst captures one or more votes of “Against” or “Abstain” in our in-house system prior to voting, the heads of research are notified by a system-generated email. 
  • The voting record is published on our company website, including the particular resolutions tabled at investee company shareholder meetings, our voting action and the outcome of the resolution. The record will also be provided directly to clients upon request.  

12.3. Additional information.[Optional]


LEA 13. Percentage of voting recommendations reviewed (Not Applicable)


LEA 14. Securities lending programme (Private)


LEA 15. Informing companies of the rationale of abstaining/voting against management

15.1. Indicate the proportion of votes participated in within the reporting year in which where you or the service providers acting on your behalf raised concerns with companies ahead of voting.

15.2. Indicate the reasons for raising your concerns with these companies ahead of voting.

Explain

          Coronation seeks to actively engage with company management and Boards on any issues which we believe compromise the long-term returns, sustainability of the business, rights of minority shareholders or the company’s role as a responsible corporate citizen. Our overriding principle is that constructive pre-emptive engagement and resolution is preferable to formulaic voting at general meetings without such prior engagement.
        

15.3. Additional information. [Optional]

Coronation aims to vote for all resolutions whenever possible, therefore whenever we will be voting against a resolution or abstain from voting we try to engage with the company beforehand to see if we can resolve our differences. When we vote against or abstain from voting a particular resolution, the vote should be followed up by a letter or telephone call to management explaining the reasons for doing so.


LEA 16. Informing companies of the rationale of abstaining/voting against management

16.1. Indicate the proportion of votes where you, and/or the service provider(s) acting on your behalf, communicated the rationale to companies for abstaining or voting against management recommendations. Indicate this as a percentage out of all eligible votes.

16.3. In cases where your organisation does communicate the rationale for abstaining or voting against management recommendations, indicate whether this rationale is made public.

16.4. Additional information. [Optional]

Coronation aims to vote for all resolutions whenever possible, therefore whenever we will be voting against a resolution or abstain from voting we try to engage with the company beforehand to see if we can resolve our differences. When we vote against or abstain from voting a particular resolution, the vote should be followed up by a letter or telephone call to management explaining the reasons for doing so.


LEA 17. Percentage of (proxy) votes cast

17.1. For listed equities in which you or your service provider have the mandate to issue (proxy) voting instructions, indicate the percentage of votes cast during the reporting year.

Votes cast (to the nearest 1%)

99 %

Specify the basis on which this percentage is calculated

17.2. Explain your reason(s) for not voting on certain holdings

We did not receive the ballots and have taken this up with the custodian concerned.

17.3. Additional information. [Optional]

Effective 3 August 2017 we vote on all resolutions and no longer have a minimum shareholding requirement for our South African listed companies.

 


LEA 18. Proportion of ballot items that were for/against/abstentions

18.1. Indicate whether you track the voting instructions that you or your service provider on your behalf have issued.

18.2. Of the voting instructions that you and/or third parties on your behalf have issued, indicate the proportion of ballot items that were:

Voting instructions
Breakdown as percentage of votes cast
For (supporting) management recommendations
89.0 %
Against (opposing) management recommendations
10.2 %
Abstentions
0.8 %
100%

18.3. In cases where your organisation voted against management recommendations, indicate the percentage of companies which you have engaged.

100

18.4. Additional information. [Optional]


LEA 19. Proportion of ballot items that were for/against/abstentions

19.1. Indicate whether your organisation has a formal escalation strategy following unsuccessful voting.

19.2. Indicate the escalation strategies used at your organisation following abstentions and/or votes against management.

19.3. Additional information. [Optional]

When there are specific concerns, our first approach is to engage with management to deal with the respective issues. If this fails to deliver the appropriate action, we then escalate the issue to the Board. Where appropriate, we also engage with like minded shareholders to drive a more successful and coherent engagement with the company. If these actions still do not result in the desired outcome, we will take the appropriate steps at either the annual general meeting or call a special meeting to highlight our grievances and make necessary recommendations. If our best efforts are unsuccessful, then we will re-assess our investment case and valuation and take the appropriate investment action in our portfolios.

We will therefore consistently engage on a number of ESG issues throughout the year, not only at the time of particular corporate events, so that the company has sufficient time to address such concerns before any formal voting occurs. Our overriding principle is that constructive pre-emptive engagement and rectification is a far preferable outcome for all stakeholders than formulaic voting at general meetings.

As an active shareholder and through the process of engagement we believe that we can raise the overall awareness levels of companies to the importance of ESG reporting. This is to the benefit of all stakeholders. It also aids and assists the voting process as information required to justify voting decisions will be easily accessible for all shareholders. Where companies we engage with fail to improve their standard of disclosure, or adequately address the concerns we have raised, we will exercise our rights of ownership at the Annual General Meeting (AGM) in an appropriate manner to drive the required change.


LEA 20. Shareholder resolutions (Private)


LEA 21. Examples of (proxy) voting activities (Private)


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