Our clients take an interest in how we vote at shareholder meetings. They are keen we make the most of this important shareholder right.
Earlier this year, we started selectively pre-announcing our voting intentions ahead of annual general meetings. As companies become larger and the stakes that investors hold become relatively smaller, investors are seeking additional routes to actively enhance their influence over themes that are important to them.
Allianz Global Investors votes at the meetings of thousands of investee companies but we have recognised that stewardship gaps can occur even as we take the exercising of our voting rights seriously.
Since our discussions with investee companies are typically private, our expectations can be shared only on an individual basis – hardly an efficient approach if we identify a common issue across a sector or group of companies.
Usually, investors can exert influence with meaningful stakes, but as companies have become increasingly large, we may be one of many small shareholders. Disseminating our view publicly before the vote occurs allows us to add more to the discussion.
All our votes are made public shortly after meetings have taken place. To do so ahead of meetings is, however, a different thing.
Because an effective pre-announcement is an intensive task, we have selected key thematic areas of focus for specific companies, including workers’ rights, emissions reduction targets, coal and biodiversity.
These are core themes for many companies. By pre-announcing our voting intentions, we can alert other management teams to our expectations.
There are limitations
While we believe that exercising voting rights can drive improvements in sustainability standards, clearly shareholders can vote only on the resolutions that are on the meeting agenda.
In addition, in many markets shareholder resolutions are advisory, and boards may decide not to implement resolutions – even if supported by the majority of shareholders. This means we may have to add pre-announcement of other types of resolutions, for example management resolutions on director elections.
We are working to further optimise the ways we use our voting influence. As themes evolve and investor preferences develop, our suite of approaches for stewardship will expand.
As we come out of this year’s voting season and digest new developments, we will review options including pre-announcements of other types of resolutions. And we may file our own shareholder resolutions in future.
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