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French asset managers up corporate governance stance, says AFG-ASFFI

Investment managers in France are showing more interest in voting at the annual meetings of companies they invest in, according to a survey by the French asset management associations AFG-ASFFI.

The survey showed that two-thirds (64%) of investment managers in the SBF 120 said they had participated in annual meetings last year, compared with 12% in 1999. More than half (51 %) said they had voted against one or several resolutions. And two thirds (66%) of fund managers said they told their subscribers how they had voted in the annual report of their fund.

AFG said the findings contradict the accepted idea that investment managers do not bother to vote at annual meetings. “For many years our profession has made the exercise of the right to vote an imperative of good management. To manage well is also to vote well,” said Alain Leclair, president of AFG-ASFFI.

The AFG recommends the exercise of the voting rights in its professional code of conduct set up in 1997. The same code recommends that funds inform the holders of UCITS in the annual report of the fund.

The AFG-ASFFI warned that not enough managers are telling their investors how they voted in their annual reports. Public disclosure became a legal obligation in June this year.

The AFG-ASSFI findings have been disputed by Apogé, the social responsibility (SR) specialist which is part of CCF and HSBC. It says there is a “divergence” between the funds’ responses to the AFG-ASFFI survey and their actual voting policies as described in their annual reports.

“Our research allows us to establish that voting principles or voting
policies are not available on the web. But the truth is that it is very difficult to know exactly the conditions of the exercise of the vote,” said Vincent Auriac, director of investment funds at Apogé.

“We know that a small numbers of fund managers do vote but they give no
transparency to their acts, that is, information to the holders who pay
management fees. Surprisingly, the SR funds are no more involved in voting
than the others, something the holders probably do not imagine when they
subscribe.”

Earlier this year Apogé looked at the voting policies of eight ethical managers set out in their funds’ annual reports. Only one investment fund fully disclosed its voting behaviour, in accordance with the AFG-ASFFI code of practice.

The Apogé study concluded: “On average, the funds ethical show no more interest than other managers in corporate governance, which is one of the three pillars of sustainable development.”



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