The Superannuation Trust of Australia caused a stir in January when it decided to provide a report to members summarising its record of voting with respect to publicly-listed companies in which it holds shares.
The resulting reportage of the STA move prompted the Investment and Financial Services Association to respond, denying suggestions in some publications, that fund managers aren’t being sufficiently proactive in voting their shares in company ballots.
IFSA deputy chief executive, Jo-Anne Bloch says the record of Australian fund managers has in fact been strong.
She says a survey of IFSA members shows that fund managers voted on 92 per cent of all company resolutions between July 2002 and July 2003 and that many funds have detailed their voting activity on web sites and elsewhere.
The STA’s chief executive Mark Delaney, in outlining his fund’s decision, says it is vital that the fund be open and accountable to members about its corporate governance and proxy voting policy.
The report published by the STA for members shows the fund voted no on a range of issues, including resolutions to increase executive and chief executive share options where there were inadequate performance hurdles, and voting against the re-election of directors where company performances were poor.
Delaney says proxy voting plays a key part in protecting the integrity of publicly listed companies and therefore helps achieve better investment returns.
“It encourages companies and boards to be more accountable to their shareholders which includes STA members,” he says.
“Not only should super funds have strong corporate governance guidelines, the use of those guidelines in directing votes should also be open and accountable,” Delaney says.
An examination of the STA document reveals that it vetoed resolutions affecting some of Australia’s largest publicly-listed companies including Foodland Associates, Harvey Norman, Publishing and Broadcasting, Boral, Qantas and News Limited.
The list published by the fund indicates that its two primary areas of concern were the independence of directors and the granting of options or other incentives to senior executives.
