AMNT blasts managers’ ‘blanket refusal’ to accept scheme voting policies

This may even prevent trustees from complying with new investment regulations coming into force later this year, the organisation said.

In a letter to Christopher Woolard, board member and director of strategy and competition at the FCA, the AMNT urged the regulator to investigate this market failure.

Founding co-chair Janice Turner and campaign manager Leanne Clements backed their complaint with new research of 42 fund managers, which showed only a few had best-practice voting policies on climate change, gender and ethnic diversity.

All but the largest pension schemes are facing an almost blanket refusal by fund managers to accept their voting policies in pooled funds

Janice Turner, Association of Member Nominated Trustees

Not all fund managers even provided full disclosure, but of the 38 who did, more than half did not have a climate change-related voting policy or guideline in their voting policy, while in excess of 30 per cent of fund managers made no reference to gender diversity on boards.

Nearly 75 per cent of fund managers made no specific mention of ethnicity with regard to board diversity, and few fund managers (approximately 25 per cent of those that published their policy) had a voting guideline on tackling excessive total remuneration.

Minister steps in

Commenting on the findings, Guy Opperman, minister for pensions and financial inclusion, said: “It’s utterly unacceptable that most pension fund managers don’t have published policies and practices to combat climate change, and public commitments to tackle excessive pay and promote gender and ethnic diversity are all too rare.

“Being vague or secretive with the trustees and savers they represent is out of order. These obstructive fund managers need to take action now as effective and responsible shareholders.”

Ms Turner added: “All but the largest pension schemes are facing an almost blanket refusal by fund managers to accept their voting policies in pooled funds. This means that the fund managers’ own policies are the basis on which our shareholder votes are cast at corporate AGMs.”

She concluded: “As things stand, asset owners investing in pooled funds cannot set their own policy, and cannot rely on fund managers to reflect it in their policies either. There is no market in voting policies; we have no choice.”

The AMNT recommends that the minimum standards regarding voting policies and practices should at least include:

• Provision for acceptance of client voting policies to allow them to fulfil their regulatory obligations including within pooled funds.

• Public disclosure of all voting policies and guidelines.

• Public disclosure of voting records in a manner that is easy for asset owners to interpret and also accessible.

• Increased transparency and accountability with regard to the content of their voting policies in one place.

• Improved comprehensive (rather than case study-based) stewardship reporting at client/mandate and company level.