The manager of the NOK10.2tn (€936bn) Government Pension Fund Global (GPFG) has announced that in the interest of openness, from today onwards it will publish its rationale a day after voting against an investee company’s board.
However, Norges Bank Investment Management (NBIM) also lamented the lack of any uniform shareholder voting framework across markets, having gathered data from 66 markets in order to analyse processes.
Carine Smith Ihenacho, chief corporate governance officer at the sovereign wealth fund’s (SWF) Oslo-based manager, said: “We wish to be transparent with companies and the market so they can better understand our voting.”
The fund’s starting point was to support boards, she said.
“Therefore, it is particularly relevant for companies and the general public to understand why we in some cases vote against the board,” Smith Ihenacho said.
These explanations would be published one day after any shareholder meeting where NBIM had opposed a company board, said the central bank subsidiary, which already provides the rationales for some of its voting decisions on its website.
NBIM said its public voting guidelines formed the basis for its decisions on how to vote, and that it was publishing four position papers today that clarified its views on the issues of board independence; multiple share classes; shareholder rights in equity issuances, and related-party transactions.
The manager has also put out an “asset manager perspective” paper today on the voting process, including elements of what it considers to be an efficient voting process and how it believes key stakeholders could contribute to necessary improvements.
Smith Ihenacho said that as a global investor, the SWF depended on an efficient voting process.
“We see that in several markets, there are still manual voting processes, several layers of intermediaries, and a lack of electronic solutions,” she said
“We depend on issuers, investors, business participants and regulators cooperating to make relevant information available, propose improvements, develop good electronic voting solutions, and modernise frameworks,” she said.
The analysis in its paper on voting processes had taken in data from 66 markets, NBIM said, adding that findings confirmed the lack of a uniform framework across markets.
Few markets had end-to-end electronic voting systems or vote confirmations, it said.