TUC Fund Manager Voting Survey 2008

Download the full 2008 survey (PDF)

Executive Summary

This is the TUC's sixth annual fund manager voting survey. The survey is intended to give trustees information on how various fund managers exercise voting rights in relation to controversial issues at company AGMs, and an insight into voting and engagement processes. We intend to repeat it on an annual basis.

Unfortunately the number of organisations responding to the survey was again disappointing this year, though the response rate is a little higher than in 2007. Comparative information for trustees on manager's voting and engagement activity is very limited and the failure of many managers to participate in surveys such as this does not sit easily with the industry's claims that it becoming more transparent.

Looking at trends in the data this year, it is notable that a significant number of fund managers support the large majority of remuneration reports, even when there are contentious issues at stake. Half of the fund managers responding to the survey supported 80% or more of the remuneration resolutions on which they voted. With many managers rarely voting against pay resolutions, it is perhaps not surprising that investor revolts over pay are uncommon, and cases of companies failing to secure majority support very rare.

The TUC also sought voting decisions on two resolutions at Northern Rock's AGM in April 2007 - the remuneration report and appointment of the auditor. Responses suggest that the large majority of respondents had no concerns about either issue at that point.

Finally, somewhat surprisingly a small number of managers supported a shareholder resolution that sought to make partisan political donations, though the large majority did not.

The second section of the survey looks policies and processes. Most striking is the finding that most managers responding to the survey now disclose some voting data publicly. The TUC believes that this demonstrates that the Government was right to take a reserve power that would enable it to mandate disclosure if necessary. The TUC remains concerned that a hard core of fund managers are still disclosing no public data on voting records, and also about the uneven quality of what is disclosed.

Respondents to Section Two also indicate that queries about competency in respect of environmental, social and governance (ESG) issues are increasingly common. Many respondents said that questions about ESG issues were appearing in Requests for Proposals (RFPs).

Responses to Section Two also confirm the picture from previous years of pension funds largely delegating responsibility for voting and engagement to their appointed fund managers. Given the wide variation in fund managers' policies and practices, the TUC believes that trustees who consider ESG issues are important should review whether delegation is an effective strategy.

Briefing document (500 words) issued 23 Jul 2008