Stewardship: Managers urged to give asset owners more say over votes

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Pension schemes should be better able to influence companies through shareholder voting, the government-convened Occupational Pensions Stewardship Council has said in a new report summarising responses from 44 asset managers. 
 
Voting by asset owners is still a contentious issue particularly in pooled funds. While some managers have launched programmes to address this, including DWS in collaboration with AMX, Northern Trust and Minerva Analytics, and BlackRock, many fund managers decide themselves how to vote at company annual general meetings, often arguing that a single vote cannot be derived from the views of all their clients. 
 
The new report, authored by provider Scottish Widows, calls for asset managers to start being more transparent with asset owners on their voting and to find ways to better represent asset owners’ preferences. It found asset managers are open to working with asset owners on their approach and includes several examples of best practice that already exists. 
 
The report uses findings by some members of the OPSC – among them master trust Nest, Brunel Pension Partnership, the BT Pension Scheme and other private sector and local authority schemes – who last year wrote to 44 asset managers to determine the current and future appetite for disclosing and discussing voting intentions and client-led voting. The report summarises and analyses the responses, providing a snapshot of developments in the industry in this area.  

Just nine managers looking into client-led voting 

 
Currently nine of the 44 asset managers are actively looking into client-led voting and 11 said they would consider it along with industry developments in this area, the group found. It also considers the ‘expression of wish’ concept for pooled funds, which was included in recommendations from the Taskforce of Pension Scheme Voting Implementation in September 2021, another government-convened group. 
 
Pensions minister Guy Opperman said the OPSC has shown what can be done when asset owners collaborate on stewardship in the interest of pension savers. 
  
"I firmly believe the days of trustees leaving everything to asset managers without scrutiny must come to an end. We need to do more to improve pension schemes’ and asset managers’ stewardship, encouraging engagement with companies to ensure they are fit for purpose in the 21st century,” he added.  
  
Maria Nazarova-Doyle, head of pension investments and responsible investments at Scottish Widows, who was also a member of TPSVI, said more influence on voting should be available not only to large schemes with segregated mandates but to all asset owners who want to exercise their views on behalf of their beneficiaries.  
 
“This does not mean schemes should be voting on every single issue but can take a form of voting guidelines that are accepted by asset managers as expression of wish, or in fact offered as a policy choice by asset managers to their clients so that they can select a voting policy that best fits their needs,” she said, suggesting that funds that are more transparent on voting would start to gain more business. 
  
The group wrote to the following asset managers:  

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