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Australian Council of Superannuation Investors (ACSI)

Service Providers Framework 2020

You are in Active Ownership Services » Voting

Voting

AOS 11. ESG in voting recommendations

11.1. Describe how ESG factors are taken into consideration in voting recommendations.

          Environmental, social and governance factors all underpin ACSI’s proxy voting recommendations. ESG considerations feed into voting recommendations through internal and external research, previous years’ voting outcomes, controversies and through ACSI’s priority issues which include; labour and human rights in supply chains, corporate governance issues, remuneration issues, climate change and board diversity. 

Regarding shareholder resolutions specifically on ESG matters, ACSI will generally favour those proposals that result in the disclosure of information that is useful to shareholders and not overly prejudicial to their commercial interests. A judgment on each proposal will be based on what is in the best interest of shareholders, and a thorough assessment of any potential impacts on the company.
        

11.2. Additional information [OPTIONAL]

          
        

AOS 12. Raising concerns with companies ahead of voting (Private)


AOS 13. Voting against management

13.1. Indicate the proportion of votes where you have communicated the rationale to companies when you, on behalf of your clients, abstain or vote against management proposals.

13.3. Additional information [OPTIONAL]

          ACSI generally meets with the company around the time of their AGM and writes to each company where there was an ‘against’ recommendation expressing the rationale for the vote.

Companies where there are more material concerns become corporate governance engagement priorities and ACSI will continue to hold face-to-face meetings with the company seeking a change to its practices.

ACSI provides a (free) copy of our voting recommendations to all companies on a confidential basis.
        

AOS 14. Monitoring voting outcomes

14.1. Describe how you monitor voting outcomes.

          ACSI monitors the outcomes and keeps a record of all the resolutions for ASX300 companies each year. 

Generally, these outcomes are grouped by key topics or ESG issues, such as remuneration or board diversity, and assessed against ACSI’s objectives in these categories which could include ensuring for example, the alignment of executive and shareholder interests and improving gender diversity on ASX300 boards.
        

14.2. Describe how you typically decide what recommendations for next steps to give to clients.

Depending upon the nature and materiality of an issue and responsiveness of a company to engagement, if required ACSI will recommend next steps to our members and undertake a series of escalation steps before and post-AGM.

Generally, where ACSI recommends a vote in opposition to the board, depending on the materiality, the company may be put onto ACSI's engagement priority list for the following year and we also encourage our membership and other industry participants to take a more pro-active stance.

Other next step that ACSI may recommend include:

  • Further engagement with board members and/or chair
  • Expressing concerns to alternative company representatives (i.e. management, other non-executive directors)
  • Working collectively with asset managers/other asset owners and holding discussions with other equity or bondholders
  • Speaking to regulators, industry bodies and advocating for policy change
  • Legal avenues
  • Public dialogue and media

14.3. Additional information [OPTIONAL]


AOS 15. Mechanisms for clients to review voting recommendations

15.1. Indicate whether you have formal mechanisms in place for clients to review your voting recommendations.

15.2. Describe the formal mechanisms you have in place if clients wish to review your voting recommendation and/or give voting instructions different from your recommendations.

ACSI provides voting recommendations to AVAS subscribers for the ASX300 to review the votes and the rationale behind the vote. ACSI does not vote on behalf of its members and members can choose not to follow them depending on their internal goals. Individual members will often seek further discussion and clarification with ACSI on specific voting recommendations, particularly if they are in receipt of alternative reviews from other proxy voting services or investment managers.

15.3. Additional information [OPTIONAL]


AOS 16. Involvement in projects to improve voting trail and obtaining confirmation

16.1. Describe your involvement in any project to improve the voting trail and/or to obtain vote confirmation for your clients.

ACSI continues to monitor and talk to regulators about improving the voting process and has participated in discussions about administrative complexities, costs, potential failures and improvements that can be made to strengthen the voting trail and vote confirmation.

The evidence base for the advocacy work ACSI does on this topic is a research project in 2012 titled 'Institutional Proxy Voting in Australia'.

Voting by a show of hands is another current focus of ACSI. We are part of the ASX Corporate Governance Council, which recently released new Principles and Recommendations including 6.4: "A listed entity should ensure that all substantive resolutions at a meeting of security holders are divided by a poll rather than by a show of hands." ACSI actively supported this change through our submission and Council membership.

16.2. Additional information [OPTIONAL]


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