If you are managing a pooled fund – your voting behaviour is under the spotlight! AMNT’s Red Line Voting is almost here and Trustees now have the power to influence the way you vote on their behalf and recognises their status as ‘asset owners’. Some may disagree about the Red Lines but sufficient on all sides do and the concept is also gaining ground internationally.
Most scheme members - care about how companies treat the environment, care that they look after their staff, care that company boards don’t pay themselves obscene salaries or bonuses for a poor outcomes and care that they act in a socially and globally responsible way. So why shouldn’t Trustees, who are the ‘asset owners’, give clear direction to how fund managers vote at company AGM’s on their behalf.
Trustees have tended to refrain from challenging fund managers about their voting patterns but still expect companies to develop excellent ESG policies. They cannot have it both ways. The power of the vote is a democratic right at the heart of our society so it’s a real lost opportunity if Trustees do not expect and fund managers do not use - voting - to impact corporate behaviour.
Like it or not, we all have a duty to improve ESG outcomes and improved governance could improve returns. Red Line Voting is easy to adopt and gives Trustees what they need to raise expectations of funds to benefit their members.
Pensions Age article for Red Line Voting
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