Decision details

The Committee considered the report, introduced by Thomas Skeen, which provided an update on voting activities on behalf of the Fund. The Committee noted that the Fund was a member of the LAPFF and the Committee and Board has previously agreed that the Fund should cast its votes at investor meetings in line with LAPFF voting recommendations.

It was noted that the voting shareholders are encouraged to act ethically and responsibly and to vote accordingly. Whilst it is not possible to force fund managers to vote a particular way, the Fund was able to strongly advise them of the position it feels they should take. It was acknowledged that this advice is generally adhered to and voting is, more often than not, done in line with the Fund’s position.

In discussion, the question was raised about what happened when a fund manager did not vote in line with the Fund’s preferred position. In response, it was noted that, whilst the Fund is unable to force fund managers to vote a particular way, it is mandatory for fund managers to provide detailed reasoning when their vote is that against the preferred choice of the Fund. It was suggested that it might be helpful if future Pensions Committee and Board meetings were provided with an update on the rationale behind why some companies vote in a different way to how the Fund would like them to vote.

The Committee and Board questioned how effective it was to ask companies to vote a certain way, with particular reference drawn to Anadarko, which votes in compliance with the Fund’s position only 52% of the time. The Committee was assured that engagement with companies is helpful and can have a positive investment impact. It was also highlighted to the Committee that engagement with companies is important in getting them to change their behaviour.

Resolved

The Committee note this report.