Press release: Bringing shareholder voting into the 21st Century

Bringing shareholder voting into the 21st Century: An examination of the barriers to effective stewardship and how to overcome them.

Pensions Minister endorses AMNT report recommendations and agrees to set up working group on barriers to trustee voting: “I am determined we are going to bring about real change on this issue”.

  • AMNTs continuing Red Lines Voting campaign leads to the creation of an industry working group, led by the Department for Work and Pensions, to develop solutions to overcome the barriers to trustee voting.
  • The working group should address the overly complex and archaic voting infrastructure; underinvestment in the stewardship function in fund management; and transparency of voting policies and outcomes.
  • The recommendations are contained in a new  AMNT report which evaluates barriers preventing different client voting policies from being implemented by fund managers in pooled funds
  • It concludes that while barriers do exist they are not insurmountable; it is mainly down to fund manager unwillingness to implement client policies
  • AMNT urges trustees to develop ESG policies and use them as a benchmark to hold fund managers to account
  •  Investment consultants should hold fund managers to account for their unwillingness to accept client voting policies.  This could include downgrading the fund manager.

The report, authored by Professor Iain Clacher and published today, reaches three main conclusions:

First, the barriers presented to split voting in pooled funds are not insurmountable, especially as some fund managers have already been doing this for some clients. Put simply, asset owners' policies could be implemented by fund managers if there was the will to do so.

Second, whilst a lack of will represents a key driver for inertia in addressing the issue, long-term underinvestment in the voting system means that it is no longer fit for purpose. The voting system needs urgent reform. There needs to be a simplification of the voting chain and investment in technology to enable the effective stewardship of pension fund investments for the long run.

Third, asset owners need to be more proactive in their stewardship approach, but they cannot do so without the support of their fund managers and investment consultants. So far, this has been sadly lacking.

Key short-term recommendations include advising asset owners to develop their own voting polices on ESG issues they deem to be financially material, as well as benchmark their fund managers’ voting policies against their own, and hold them to account for it accordingly.   If their investment consultants do not support them in this endeavour, they should consider changing advisors. 

And finally, fund managers should at a minimum report against client voting policies on a comply or explain basis, so that asset owners can make more informed decisions regarding the degree of alignment between themselves and their fund managers.  Scheme specific reporting requirements will be central in achieving this.


“Fund managers whose policy falls far short of what is needed have refused to accept their clients’ policies, and failed to align their own with that of their clients. There is now a clash between the asset owners and the fund managers over who should direct the voting policy of the investments. This is an untenable situation that requires immediate attention especially given the new, greater regulatory obligations placed upon trustees.  Power needs to shift from fund managers to pension funds, and I am confident that the proposed working group can help to make this a reality”.

Janice Turner, founding co-chair of the Association of Member Nominated Trustees (AMNT)

“We are pleased that the Minister for Pensions and Financial Inclusion has supported our report and its recommendation to create an industry working group. His commitment to address the issue of trustee voting will create the impetus that the industry needs to develop real solutions to this problem. Fund managers may currently be struggling to meet the demand on client reporting requirements given increased regulatory requirements.  We hope that this report, along with this increased demand, will be the wake up call the industry needs to realise that their business models must change, - and investment must be made - in order to accommodate this new reality.  Innovation in this area is sorely needed”.  

Leanne Clements, campaign manager for Red Line Voting


Click here to access and download AMNT's full report.

Click here to access and download this press release.

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