TUC Fund Manager Voting Survey 2006

Issue date

05 Jun 2006

Introduction

A survey of the voting and engagement records and processes of institutional investors

Executive summary

This is the TUC's fourth 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. It will be repeated on an annual basis.

This year's survey has seen a lower response rate with a smaller number of fund managers choosing to provide responses to the TUC. Based on the lower level of responses to this year's survey the TUC believes that a voluntarist approach to disclosure of voting and engagement records is unlikely to result in much greater public reporting than at present. The TUC will therefore continue to lobby for a requirement that institutional investors disclose voting records publicly.

The second section of the survey looks at voting processes. This year it features new questions on engagement, the abolition of the Operating and Financial Review (OFR) and research undertaken on employment and labour issues.

Key facts about the 2006 survey:

Lower response rate - 26 organisations provided full voting records to the TUC compared with 28 in 2005, 17 in 2004 and 9 in 2003
Comprehensive voting data for 27 investors compared with 32 in 2005, 20 in 2004 and 12 in 2003. The total is comprised of 23 fund managers, 3 pension funds and 1 voting agency
Overall just under 50% of the target group provided full voting records. Just over 61% of the target group provided some form of response. In 2005 50% provided a full response and 68% provided some information
Four fund managers that do not currently disclose voting records publicly say they plan to make voting data public in future
Most fund managers believe the abolition of the OFR will result in less reporting of useful information to shareholders
Almost all investors do not take a position on differential pension provision for directors (ie more generous accrual or contribution rates than those available to other staff in the same company)
The survey will be distributed to the TUC's Member Trustee Network covering 1,000 pension fund trustees

Section one

Introduction

Background to the 2006 survey

The exercise of ownership by institutional investors continues to attract interest both within the investment industry and wider policy circles. A range of organizations are looking again at the position of institutional investors within the economic system, as owners of business and in their role in allocating capital. Often these critiques have focused on the timescales involved, and whether there is too much pressure - on both investors and business - for short-term results [1] .

There has been an increasing focus on the need for institutions to be transparent about their engagement with companies. For example in May the UNEP Finance Initiative published its finalized Principles of Responsible Investment [2] . One of the six key principles covers the reporting of activity including voting and engagement.

More recently the International Corporate Governance Network has been consulting on a revised Statement of Shareholder Responsibilities [3] . This includes a recommendation that institutions publicly disclose at least a summary of how they have voted their shares.

On the specific issue of voting disclosure there has been continuing political movement. Compulsory disclosure of mutual funds' voting records came into force in the US in 2004 and in Canada during 2005. It is clear that the disclosure of such information has enabled potential clients to form a clearer understanding of how various fund managers exercise ownership.

Following the mandatory disclosure of voting data in some countries, reports have appeared comparing how managers address both corporate social responsibility issues [4] and executive pay [5] . It should be expected that the analysis of shareholder engagement over such issues will develop further in the future. Before the disclosure requirements came into force this was not possible. It is incumbent on opponents of disclosure to make clear whether they believe such scrutiny of engagement is a positive development or not.

Turning to the UK, in October 2005 the Department of Trade and Industry issued a draft clause attached to the Company Law Reform Bill which would enable the Government to take a power to mandate public voting disclosure in the UK.

The TUC has strongly endorsed the Government's decision. This has effectively signalled that the Government wishes to see institutional investors embrace transparency in relation to voting. Indeed there have also been further voluntary moves on the part of fund managers to undertake public disclosure. In 2005 Fidelity Investments became the latest manager to make its voting record public and in 2006 it has emerged that Hermes and Barclays Global Investors will also begin to report publicly.

Such moves are unquestionably welcome. Voluntarily embracing transparency should be recognised by trustees and beneficiaries as a significant step to take. It demonstrates that fund managers are aware that they must be accountable for how they exercise voting rights on behalf of trustees and, ultimately, beneficiaries. It is an acceptance that there is a public interest in how companies are stewarded by their owners.

We remain skeptical however that most fund managers will disclose voluntarily, as a significant number have made clear again in this year's survey that they do not intend to do so. Therefore if there is not a significant increase in the level of voluntary disclosure by fund managers the TUC will strongly lobby the Government to mandate public reporting.

Trustees need to play their part too. The TUC believes that trustees should take a close interest in how ownership is exercised. When responsibility for voting and engagement activity is delegated to appointed fund managers it is especially important that trustees monitor the activity that is being undertaken.

Ultimately it would be useful if more trustees took fund managers' records on voting and engagement into consideration during the manager selection process when awarding mandates. This would both demonstrate that clients take such issues seriously, and provide a clear commercial incentive for fund managers to devote proper resource to engagement activity.

As such the TUC will continue to produce an annual survey in order to provide trustees with a snapshot of how various managers exercise voting rights, and general information on developments in policy.

The survey

The survey consisted of two parts. The first asked for voting and engagememt records on a range of items at AGMs from July 2004 to July 2005. The second section featured a series of questions about the policies of institutional investors. A list of the resolutions in Part One of the survey can be found in Section Two of this document. The questions for Part Two of the survey are included in Section Three.

The resolutions on which voting decisions were sought were agreed with the Investment Management Association (IMA) in order to reduce the burden on fund managers participating in the TUC and IMA surveys. In response to suggestions from fund managers and others that voting records only provide a partial picture of investors' interaction with companies, for the first time this year the survey asked for details of engagement activity. The information sought from fund managers on engagement was agreed with the IMA and followed discussions between the TUC and a number of fund managers.

The overall number of resolutions on which data was sought was significantly reduced from previous years.

Process

The voting survey and a covering letter were sent out to fund managers on 31 January 2005 with a deadline of 31 March for responses. Follow-up calls were made to ensure that the fund managers had received the questionnaire. At the same time the list of resolutions was sent to the TUC's Member Trustee Network to encourage trustees to ask their fund managers for their voting records.

Response

A total of 22 fund managers provided responses to the survey including voting data. They were Aberdeen Asset Management, Barclays Global Investors, Baring Asset Management, Britannic Asset Management, Cazenove Capital Management, CCLA Investment Management, Co-operative Insurance Society, Credit Suisse Asset Management, F&C Asset Management, Fidelity Investments, Gartmore Investment Management, Glasgow Investment Manager, Henderson Global Investors, Hermes Pensions Management, HSBC, Insight Investment, JP Morgan Asset Management, M&G Investments, Morley Fund Management, Newton Fund Management, Standard Life Investments and Threadneedle Investments.

The TUC believes by disclosing voting decisions these managers have set a standard for others. We welcome the commitment of these managers to transparency and hope trustees also recognise the willingness of these managers to be open and accountable.

Information gathering through our member trustee network allowed the TUC to obtain some voting data for two other managers. These are: Baillie Gifford and Legal & General Investment Management.

The TUC has again this year also received information on some of the larger pension funds including the Universities Superannuation Scheme, Railpen and British Airways Pensions Investment Management. We are very grateful to those funds which supplied voting data direct.

Finally of the two voting agencies asked for voting recommendations Pensions Investment Research Consultants provided a full response.

Once again this year several survey respondents only provided answers to Part Two of the survey. A total of 19 organisations failed to respond or declined to take part in the survey.

A list of the organizations surveyed and the nature of their responses can be found in the Appendix.

Reading the results

As we stressed in previous surveys, trustees should be aware that there is not a 'right' way to vote on the issues covered in the section covering voting records. Investors may well be able to give a reasonable justification for voting in favour of a controversial item where an abstention or vote against might have seemed more likely. For example many fund managers inform a company that they vote against an item before an AGM to encourage the senior executives to change their behaviour. If the company promises to improve, the investor may decide to revise their voting position.

Votes in favour of management proposals should not necessarily be seen as a failure to engage properly with investee companies and raise legitimate complaints with incumbent management. That said the TUC believes that over a range of issues differences between managers over the use of voting rights become apparent. The information in this survey suggests that there is indeed a range of stances taken by fund managers.

For the first time this year engagement activity around the votes is also included. Although much of the information provided by investors on engagement is limited we have included full tables for each respondent for the sake of completeness. We hope that the engagement information provided gives trustees some indication of the level of activity undertaken.

It is hoped that in future years more fund managers will provide voting and engagement records to enable trustees to assess managers' commitment to engagement and activism.

Section two

Voting and Engagement Records

Introduction

Part One of the survey asked respondents how they voted and engaged on issues at AGMs in 2004 and 2005 listed below.

Company and date of meeting	Resolution (resolution number)
Company and date of meeting	Resolution (resolution number)
Barclays Plc	Re-election of Matthew Barrett (5)
28/04/2005	Re-election of Matthew Barrett (5)
Berkeley Group	Approve LTIP (2)
17/09/2004	Approve LTIP (2)
British Sky Broadcasting	Approve Rule 9 waiver (16)
12/11/2004	Approve Rule 9 waiver (16)
Carnival Plc	Re-election of Micky Arison (1)
13/04/2005	Re-election of Micky Arison (1)
Carphone Warehouse	Approve Performance Share Plan (8)
28/07/2004	Approve Performance Share Plan (8)
Diageo Plc	Amend LTIP (19)
20/10/2004	Amend LTIP (19)
Jardine Lloyd Thompson	Re-election of Rodney Leach (3)
28/04/2005	Re-election of Rodney Leach (3)
Lonmin Plc	Approve remuneration report (2)
27/01/2005	Approve remuneration report (2)
MFI Furniture	Approve remuneration report (10)
19/05/2005	Approve remuneration report (10)
Wm Morrison	Re-election of Sir Ken Morrison (4)
26/05/2005	Re-election of Sir Ken Morrison (4)
Reckitt Benckiser Plc	Approve remuneration report (2)
05/05/2005	Approve remuneration report (2)
J Sainsbury	Approve remuneration report (2)
13/07/2005	Approve remuneration report (2)
Travis Perkins Plc	Approval of remuneration report (9)
27/04/2005	Approval of remuneration report (9)
Ultra Electronics	Re-election of Julian Blogh (5)
22/04/2005	Re-election of Julian Blogh (5)
United Business Media	Approve remuneration report (2)
12/05/2005	Approve remuneration report (2)
WPP Group Plc	Re-election of Stanley Morten (7)
27/06/2005	Re-election of Stanley Morten (7)
Xstrata Plc	Approve Added Value Incentive Plan (9)
09/05/2005

Voting and engagement record tables

The following section includes the data that has been obtained on organisations' voting decisions and engagement activity.

Key:

F indicates the manager voted in favour

AG indicates the manager voted against

ABS indicates the manager abstained

NK indicates that the information is not known

DID NOT VOTE indicates that the investor did not vote its shares

Where there is no symbol no information has been provided or obtained.

Notes beneath the tables are those provided by the respondents themselves.

Aberdeen Asset Management

Company and date of meeting

Resolution (resolution number)

Interest held at meeting date

Yes/No

Voted for (F)/against (AG)/conscious abstention (Abs)

Contact with company secretary in prior 6 months to meeting

Contact with executive director(s) in prior 6 months to meeting

Contact with chair or other non-executive director(s) in prior 6 months to meeting

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Barclays Plc

Re-election of Matthew Barrett (5)

Berkeley Group

Approve LTIP (2)

British Sky Broadcasting Group Plc

Approve Rule 9 waiver (16)

ABS

Carnival Plc

Re-election of Micky Arison (1)

Carphone Warehouse Group Plc

Approve Performance Share Plan (8)

Diageo Plc

Amend LTIP (19)

Jardine Lloyd Thompson

Re-election of Rodney Leach (3)

Lonmin Plc

Approve remuneration report (2)

MFI Furniture Group Plc

Approve remuneration report (10)

Wm Morrison Supermarkets Plc

Re-election of Sir Ken Morrison (4)

Reckitt Benckiser Plc

Approve remuneration report (2)

J Sainsbury Plc

Approve remuneration report (2)

Travis Perkins Plc

Approval of remuneration report (9)

ABS

Ultra Electronics

Re-election of Julian Blogh (5)

United Business Media

Approve remuneration report (2)

WPP Group Plc

Re-election of Stanley Morten (7)

Xstrata Plc

Approve Added Value Incentive Plan (9)

ABS

BA Pensions Investment

Company and date of meeting

Resolution (resolution number)

Interest held at meeting date

Yes/No

Voted for (F)/against (AG)/conscious abstention (Abs)

Contact with company secretary in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with chair or other non-executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Barclays Plc

Re-election of Matthew Barrett (5)

Berkeley Group

Approve LTIP (2)

British Sky Broadcasting Group Plc

Approve Rule 9 waiver (16)

Carnival Plc

Re-election of Micky Arison (1)

Carphone Warehouse Group Plc

Approve Performance Share Plan (8)

Diageo Plc

Amend LTIP (19)

Jardine Lloyd Thompson

Re-election of Rodney Leach (3)

Lonmin Plc

Approve remuneration report (2)

MFI Furniture Group Plc

Approve remuneration report (10)

Wm Morrison Supermarkets Plc

Re-election of Sir Ken Morrison (4)

Reckitt Benckiser Plc

Approve remuneration report (2)

J Sainsbury Plc

Approve remuneration report (2)

Travis Perkins Plc

Approval of remuneration report (9)

Ultra Electronics

Re-election of Julian Blogh (5)

United Business Media

Approve remuneration report (2)

WPP Group Plc

Re-election of Stanley Morten (7)

Xstrata Plc

Approve Added Value Incentive Plan (9)

Barclays Global Investors

Company and date of meeting	Resolution (resolution number)	Interest held at meeting date Yes/No	Voted for (F)/against (AG)/conscious abstention (Abs)	Contact with company secretary in prior 6 months to meeting (Please put NK if the information is not known)			Contact with executive director(s) in prior 6 months to meeting (Please put NK if the information is not known)			Contact with chair or other non-executive director(s) in prior 6 months to meeting (Please put NK if the information is not known)
Company and date of meeting	Resolution (resolution number)	Interest held at meeting date Yes/No	Voted for (F)/against (AG)/conscious abstention (Abs)	Number of Telephone Call(s)	Number of Letter(s)	Number of Meeting(s)	Number of Telephone Call(s)	Number of Letter(s)	Number of Meeting(s)	Number of Telephone Call(s)	Number of Letter(s)	Number of Meeting(s)
Barclays Plc	Re-election of Matthew Barrett (5)	Y	N/A (BGI outsource vote for Barclays)
Berkeley Group	Approve LTIP (2)	Y	AG	1	-	-	-	-	-	NK	2	2
British Sky Broadcasting Group Plc	Approve Rule 9 waiver (16)	Y	F	-	-	-	-	-	-	-	-	1
Carnival Plc	Re-election of Micky Arison (1)	Y	AG	1
Carphone Warehouse Group Plc	Approve Performance Share Plan (8)	Y	F
Diageo Plc	Amend LTIP (19)	Y	F
Jardine Lloyd Thompson	Re-election of Rodney Leach (3)	Y	F	-	-	-	-	-	-	-	-	1
Lonmin Plc	Approve remuneration report (2)	Y	AG	1
MFI Furniture Group Plc	Approve remuneration report (10)	Y	ABS
Wm Morrison Supermarkets Plc	Re-election of Sir Ken Morrison (4)	Y	ABS	-	-	-	-	-	-	-	-	NK
Reckitt Benckiser Plc	Approve remuneration report (2)	Y	AG	1
J Sainsbury Plc	Approve remuneration report (2)	Y	F	-	-	-	-	-	-	-	-	1
Travis Perkins Plc	Approval of remuneration report (9)	Y	F
Ultra Electronics	Re-election of Julian Blogh (5)	Y	F						1
United Business Media	Approve remuneration report (2)	Y	AG	1	-	-	-	-	-	1	-	-
WPP Group Plc	Re-election of Stanley Morten (7)	Y	ABS
Xstrata Plc	Approve Added Value Incentive Plan (9)	Y	F	1	-	-	-	-	-	1	-	-

Baring Asset Management

Company and date of meeting

Resolution (resolution number)

Interest held at meeting date

Yes/No

Voted for (F)/against (AG)/conscious abstention (Abs)

Contact with company secretary in prior 6 months to meeting

(Please put NK if the information is not known)*

Contact with executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)*

Contact with chair or other non-executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)*

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Barclays Plc

Re-election of Matthew Barrett (5)

Berkeley Group

Approve LTIP (2)

British Sky Broadcasting Group Plc

Approve Rule 9 waiver (16)

Carnival Plc

Re-election of Micky Arison (1)

Carphone Warehouse Group Plc

Approve Performance Share Plan (8)

Diageo Plc

Amend LTIP (19)

Jardine Lloyd Thompson

Re-election of Rodney Leach (3)

Lonmin Plc

Approve remuneration report (2)

MFI Furniture Group Plc

Approve remuneration report (10)

Wm Morrison Supermarkets Plc

Re-election of Sir Ken Morrison (4)

Reckitt Benckiser Plc

Approve remuneration report (2)

J Sainsbury Plc

Approve remuneration report (2)

Travis Perkins Plc

Approval of remuneration report (9)

ABS

Ultra Electronics

Re-election of Julian Blogh (5)

United Business Media

Approve remuneration report (2)

WPP Group Plc

Re-election of Stanley Morten (7)

Xstrata Plc

Approve Added Value Incentive Plan (9)

* Not disclosed as it is not a separate function Britannic Asset Management

Company and date of meeting

Resolution (resolution number)

Interest held at meeting date

Yes/No

Voted for (F)/against (AG)/conscious abstention (Abs)

Contact with company secretary in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with chair or other non-executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Barclays Plc

Re-election of Matthew Barrett (5)

DID NOT VOTE

Berkeley Group

Approve LTIP (2)

British Sky Broadcasting Group Plc

Approve Rule 9 waiver (16)

Carnival Plc

Re-election of Micky Arison (1)

Carphone Warehouse Group Plc

Approve Performance Share Plan (8)

Diageo Plc

Amend LTIP (19)

DID NOT VOTE

Jardine Lloyd Thompson

Re-election of Rodney Leach (3)

Lonmin Plc

Approve remuneration report (2)

DID NOT VOTE

MFI Furniture Group Plc

Approve remuneration report (10)

Wm Morrison Supermarkets Plc

Re-election of Sir Ken Morrison (4)

Reckitt Benckiser Plc

Approve remuneration report (2)

DID NOT VOTE

J Sainsbury Plc

Approve remuneration report (2)

Travis Perkins Plc

Approval of remuneration report (9)

Ultra Electronics

Re-election of Julian Blogh (5)

United Business Media

Approve remuneration report (2)

WPP Group Plc

Re-election of Stanley Morten (7)

Xstrata Plc

Approve Added Value Incentive Plan (9)

DID NOT VOTE

Cazenove Capital Management

Company and date of meeting

Resolution (resolution number)

Interest held at meeting date

Yes/No

Voted for (F)/against (AG)/conscious abstention (Abs)

Contact with company secretary in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with chair or other non-executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Barclays Plc

Re-election of Matthew Barrett (5)

Berkeley Group

Approve LTIP (2)

British Sky Broadcasting Group Plc

Approve Rule 9 waiver (16)

Carnival Plc

Re-election of Micky Arison (1)

Carphone Warehouse Group Plc

Approve Performance Share Plan (8)

Diageo Plc

Amend LTIP (19)

Jardine Lloyd Thompson

Re-election of Rodney Leach (3)

Lonmin Plc

Approve remuneration report (2)

MFI Furniture Group Plc

Approve remuneration report (10)

Wm Morrison Supermarkets Plc

Re-election of Sir Ken Morrison (4)

Reckitt Benckiser Plc

Approve remuneration report (2)

J Sainsbury Plc

Approve remuneration report (2)

Travis Perkins Plc

Approval of remuneration report (9)

Ultra Electronics

Re-election of Julian Blogh (5)

United Business Media

Approve remuneration report (2)

WPP Group Plc

Re-election of Stanley Morten (7)

Xstrata Plc

Approve Added Value Incentive Plan (9)

CCLA

Company and date of meeting

Resolution (resolution number)

Interest held at meeting date

Yes/No

Voted for (F)/against (AG)/conscious abstention (Abs)

Contact with company secretary in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with chair or other non-executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Barclays Plc

Re-election of Matthew Barrett (5)

Berkeley Group

Approve LTIP (2)

British Sky Broadcasting Group Plc

Approve Rule 9 waiver (16)

ABS

Carnival Plc

Re-election of Micky Arison (1)

ABS

Carphone Warehouse Group Plc

Approve Performance Share Plan (8)

Diageo Plc

Amend LTIP (19)

ABS

Jardine Lloyd Thompson

Re-election of Rodney Leach (3)

Lonmin Plc

Approve remuneration report (2)

MFI Furniture Group Plc

Approve remuneration report (10)

Wm Morrison Supermarkets Plc

Re-election of Sir Ken Morrison (4)

Reckitt Benckiser Plc

Approve remuneration report (2)

J Sainsbury Plc

Approve remuneration report (2)

Travis Perkins Plc

Approval of remuneration report (9)

Ultra Electronics

Re-election of Julian Blogh (5)

United Business Media

Approve remuneration report (2)

WPP Group Plc

Re-election of Stanley Morten (7)

ABS

Xstrata Plc

Approve Added Value Incentive Plan (9)

Co-operative Insurance Society

Company and date of meeting	Resolution (resolution number)		Interest held at meeting date Yes/No	Voted for (F)/against (AG)/conscious abstention (Abs)	Contact with company secretary in prior 6 months to meeting (Please put NK if the information is not known)			Contact with executive director(s) in prior 6 months to meeting (Please put NK if the information is not known)			Contact with chair or other non-executive director(s) in prior 6 months to meeting (Please put NK if the information is not known)
Company and date of meeting	Resolution (resolution number)		Interest held at meeting date Yes/No	Voted for (F)/against (AG)/conscious abstention (Abs)	Number of Telephone Call(s)	Number of Letter(s)	Number of Meeting(s)	Number of Telephone Call(s)	Number of Letter(s)	Number of Meeting(s)	Number of Telephone Call(s)	Number of Letter(s)	Number of Meeting(s)
Barclays Plc	Re-election of Matthew Barrett (5)		Y	ABS	1	1	0	NK	NK	0	0	0	0
Berkeley Group	Approve LTIP (2)		Y	AG	0	1	0	NK	NK	0	0	0	0
British Sky Broadcasting Group Plc	Approve Rule 9 waiver (16)		Y	AG	1	1	0	NK	NK	0	0	0	1
Carnival Plc	Re-election of Micky Arison (1)		Y	AG	1	1	0	NK	NK	0	0	0	0
Carphone Warehouse Group Plc	Approve Performance Share Plan (8)		Y	ABS	0	1	0	NK	NK	0	0	0	0
Diageo Plc	Amend LTIP (19)		Y	AG	0	1	0	NK	NK	0	0	0	0
Jardine Lloyd Thompson	Re-election of Rodney Leach (3)		Y	F	0	0	0	NK	NK	0	0	0	0
Lonmin Plc	Approve remuneration report (2)		Y	AG	1	1	0	NK	NK	0	0	0	0
MFI Furniture Group Plc		Approve remuneration report (10)	Y	AG	0	1	0	NK	NK	0	0	0	0
Wm Morrison Supermarkets Plc		Re-election of Sir Ken Morrison (4)	Y	F	0	1	0	NK	NK	1	0	0	1
Reckitt Benckiser Plc		Approve remuneration report (2)	Y	AG	0	1	0	NK	NK	0	0	0	0
J Sainsbury Plc		Approve remuneration report (2)	Y	AG	0	1	0	NK	NK	0	0	0	0
Travis Perkins Plc		Approval of remuneration report (9)	Y	AG	0	1	0	NK	NK	0	0	0	0
Ultra Electronics		Re-election of Julian Blogh (5)	Y	F	0	0	0	NK	NK	0	0	0	0
United Business Media		Approve remuneration report (2)	Y	AG	0	1	0	NK	NK	0	0	0	0
WPP Group Plc		Re-election of Stanley Morten (7)	Y	F	0	0	0	NK	NK	0	0	0	0
Xstrata Plc		Approve Added Value Incentive Plan (9)	Y	AG	0	1	0	NK	NK	0	0	0	0

Credit Suisse Asset Managenent

Company and date of meeting

Resolution (resolution number)

Interest held at meeting date

Yes/No

Voted for (F)/against (AG)/conscious abstention (Abs)

Contact with company secretary in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with chair or other non-executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Barclays Plc

Re-election of Matthew Barrett (5)

Berkeley Group

Approve LTIP (2)

British Sky Broadcasting Group Plc

Approve Rule 9 waiver (16)

Carnival Plc

Re-election of Micky Arison (1)

Carphone Warehouse Group Plc

Approve Performance Share Plan (8)

Diageo Plc

Amend LTIP (19)

Jardine Lloyd Thompson

Re-election of Rodney Leach (3)

Lonmin Plc

Approve remuneration report (2)

MFI Furniture Group Plc

Approve remuneration report (10)

Wm Morrison Supermarkets Plc

Re-election of Sir Ken Morrison (4)

Reckitt Benckiser Plc

Approve remuneration report (2)

J Sainsbury Plc

Approve remuneration report (2)

Travis Perkins Plc

Approval of remuneration report (9)

Ultra Electronics

Re-election of Julian Blogh (5)

United Business Media

Approve remuneration report (2)

WPP Group Plc

Re-election of Stanley Morten (7)

Xstrata Plc

Approve Added Value Incentive Plan (9)

F&C Asset Management

Company and date of meeting

Resolution (resolution number)

Interest held at meeting date

Yes/No

Voted for (F)/against (AG)/conscious abstention (Abs)

Contact with company secretary in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with chair or other non-executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Barclays Plc

Re-election of Matthew Barrett (5)

Berkeley Group

Approve LTIP (2)

British Sky Broadcasting Group Plc

Approve Rule 9 waiver (16)

Carnival Plc

Re-election of Micky Arison (1)

Carphone Warehouse Group Plc

Approve Performance Share Plan (8)

Diageo Plc

Amend LTIP (19)

Jardine Lloyd Thompson

Re-election of Rodney Leach (3)

Lonmin Plc

Approve remuneration report (2)

MFI Furniture Group Plc

Approve remuneration report (10)

Wm Morrison Supermarkets Plc

Re-election of Sir Ken Morrison (4)

Reckitt Benckiser Plc

Approve remuneration report (2)

J Sainsbury Plc

Approve remuneration report (2)

Travis Perkins Plc

Approval of remuneration report (9)

Ultra Electronics

Re-election of Julian Blogh (5)

United Business Media

Approve remuneration report (2)

ABS

WPP Group Plc

Re-election of Stanley Morten (7)

ABS

Xstrata Plc

Approve Added Value Incentive Plan (9)

Fidelity International

Company and date of meeting

Resolution (resolution number)

Interest held at meeting date

Yes/No

Voted for (F)/against (AG)/conscious abstention (Abs)

Contact with company secretary in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with chair or other non-executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Barclays Plc

Re-election of Matthew Barrett (5)

ABS

Berkeley Group

Approve LTIP (2)

British Sky Broadcasting Group Plc

Approve Rule 9 waiver (16)

Carnival Plc

Re-election of Micky Arison (1)

Carphone Warehouse Group Plc

Approve Performance Share Plan (8)

Diageo Plc

Amend LTIP (19)

Jardine Lloyd Thompson

Re-election of Rodney Leach (3)

Lonmin Plc

Approve remuneration report (2)

MFI Furniture Group Plc

Approve remuneration report (10)

Wm Morrison Supermarkets Plc

Re-election of Sir Ken Morrison (4)

Reckitt Benckiser Plc

Approve remuneration report (2)

J Sainsbury Plc

Approve remuneration report (2)

Travis Perkins Plc

Approval of remuneration report (9)

Ultra Electronics

Re-election of Julian Blogh (5)

ABS

United Business Media

Approve remuneration report (2)

WPP Group Plc

Re-election of Stanley Morten (7)

Xstrata Plc

Approve Added Value Incentive Plan (9)

Gartmore Investment Management

Company and date of meeting

Resolution (resolution number)

Interest held at meeting date

Yes/No

Voted for (F)/against (AG)/conscious abstention (Abs)

Contact with company secretary in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with chair or other non-executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Barclays Plc

Re-election of Matthew Barrett (5)

Berkeley Group

Approve LTIP (2)

British Sky Broadcasting Group Plc

Approve Rule 9 waiver (16)

Carnival Plc

Re-election of Micky Arison (1)

ABS

Carphone Warehouse Group Plc

Approve Performance Share Plan (8)

Diageo Plc

Amend LTIP (19)

Jardine Lloyd Thompson

Re-election of Rodney Leach (3)

Lonmin Plc

Approve remuneration report (2)

MFI Furniture Group Plc

Approve remuneration report (10)

ABS

Wm Morrison Supermarkets Plc

Re-election of Sir Ken Morrison (4)

Reckitt Benckiser Plc

Approve remuneration report (2)

J Sainsbury Plc

Approve remuneration report (2)

Travis Perkins Plc

Approval of remuneration report (9)

Ultra Electronics

Re-election of Julian Blogh (5)

United Business Media

Approve remuneration report (2)

WPP Group Plc

Re-election of Stanley Morten (7)

ABS

Xstrata Plc

Approve Added Value Incentive Plan (9)

Glasgow Investment Managers

Company and date of meeting

Resolution (resolution number)

Interest held at meeting date

Yes/No

Voted for (F)/against (AG)/conscious abstention (Abs)

Contact with company secretary in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with chair or other non-executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Barclays Plc

Re-election of Matthew Barrett (5)

Berkeley Group

Approve LTIP (2)

British Sky Broadcasting Group Plc

Approve Rule 9 waiver (16)

Carnival Plc

Re-election of Micky Arison (1)

Carphone Warehouse Group Plc

Approve Performance Share Plan (8)

Diageo Plc

Amend LTIP (19)

Jardine Lloyd Thompson

Re-election of Rodney Leach (3)

Lonmin Plc

Approve remuneration report (2)

MFI Furniture Group Plc

Approve remuneration report (10)

Wm Morrison Supermarkets Plc

Re-election of Sir Ken Morrison (4)

Reckitt Benckiser Plc

Approve remuneration report (2)

J Sainsbury Plc

Approve remuneration report (2)

Travis Perkins Plc

Approval of remuneration report (9)

Ultra Electronics

Re-election of Julian Blogh (5)

United Business Media

Approve remuneration report (2)

WPP Group Plc

Re-election of Stanley Morten (7)

Xstrata Plc

Approve Added Value Incentive Plan (9)

Henderson Global Investors

Company and date of meeting	Resolution (resolution number)		Interest held at meeting date Yes/No	Voted for (F)/against (AG)/conscious abstention (Abs)	Contact with company secretary in prior 6 months to meeting (Please put NK if the information is not known)			Contact with executive director(s) in prior 6 months to meeting (Please put NK if the information is not known)			Contact with chair or other non-executive director(s) in prior 6 months to meeting (Please put NK if the information is not known)
Company and date of meeting	Resolution (resolution number)		Interest held at meeting date Yes/No	Voted for (F)/against (AG)/conscious abstention (Abs)	Number of Telephone Call(s)	Number of Letter(s)	Number of Meeting(s)	Number of Telephone Call(s)	Number of Letter(s)	Number of Meeting(s)	Number of Telephone Call(s)	Number of Letter(s)	Number of Meeting(s)
Barclays Plc	Re-election of Matthew Barrett (5)		Y	F	*	0	1	*	0	0	*	0	1
Berkeley Group	Approve LTIP (2)		Y	F	*	0	0	*	0	2	*	0	1
British Sky Broadcasting Group Plc	Approve Rule 9 waiver (16)		Y	F	*	0	0	*	0	0	*		1
Carnival Plc	Re-election of Micky Arison (1)		Y	F	*	0	0	*	0	0	*	0	1
Carphone Warehouse Group Plc	Approve Performance Share Plan (8)		Y	F	*	0	0	*	0	0	*	0	0
Diageo Plc	Amend LTIP (19)		Y	F	*	0	0	*	0	0	*	0	0
Jardine Lloyd Thompson	Re-election of Rodney Leach (3)		Y	F	*	0	0	*	0	0	*	0	0
Lonmin Plc	Approve remuneration report (2)		Y	AG	*	0	0	*	0	0	*	1	0
MFI Furniture Group Plc		Approve remuneration report (10)	Y	ABS	*	0	0	*	0	0	*	1	0
Wm Morrison Supermarkets Plc		Re-election of Sir Ken Morrison (4)	Y	F	*	0	0	*	0	0	*	0	1
Reckitt Benckiser Plc		Approve remuneration report (2)	Y	F	*	0	0	*	0	0	*	0	1
J Sainsbury Plc		Approve remuneration report (2)	Y	AG	*	0	0	*	0	0	*	0	1
Travis Perkins Plc		Approval of remuneration report (9)	Y	F	1	0	0	*	0	0	*	0	0
Ultra Electronics		Re-election of Julian Blogh (5)	Y	F	*	0	0	*	0	0	*	0	0
United Business Media		Approve remuneration report (2)	Y	ABS	*	0	0	*	0	0	*	1	0
WPP Group Plc		Re-election of Stanley Morten (7)	Y	F	*	0	0	*	0	0	*	0	0
Xstrata Plc		Approve Added Value Incentive Plan (9)	Y	ABS	*	0	0	*	0	0	*	1	0

* Not all telephone calls are recorded in a written note.

Hermes

Company and date of meeting	Resolution (resolution number)		Interest held at meeting date Yes/No	Voted for (F)/against (AG)/conscious abstention (Abs)	Contact with company secretary in prior 6 months to meeting (Please put NK if the information is not known)			Contact with executive director(s) in prior 6 months to meeting (Please put NK if the information is not known)			Contact with chair or other non-executive director(s) in prior 6 months to meeting (Please put NK if the information is not known)
Company and date of meeting	Resolution (resolution number)		Interest held at meeting date Yes/No	Voted for (F)/against (AG)/conscious abstention (Abs)	Number of Telephone Call(s)	Number of Letter(s)	Number of Meeting(s)	Number of Telephone Call(s)	Number of Letter(s)	Number of Meeting(s)	Number of Telephone Call(s)	Number of Letter(s)	Number of Meeting(s)
Barclays Plc	Re-election of Matthew Barrett (5)		Y	F	0	1	1	0	0	0	1	0	2
Berkeley Group	Approve LTIP (2)		Y	F	0	0	0	0	0	0	0	0	1
British Sky Broadcasting Group Plc	Approve Rule 9 waiver (16)		Y	F	2	0	1	0	0	0	0	0	2
Carnival Plc	Re-election of Micky Arison (1)		Y	F	0	0	0	0	0	2	0	0	1
Carphone Warehouse Group Plc	Approve Performance Share Plan (8)		Y	F	0	0	0	0	0	0	0	0	0
Diageo Plc	Amend LTIP (19)		Y	AG	1	0	0	0	0	0	0	1	0
Jardine Lloyd Thompson	Re-election of Rodney Leach (3)		Y	AG	1	0	0	0	1	0	0	0	0
Lonmin Plc	Approve remuneration report (2)		Y	AG	1	0	0	0	0	1	0	0	0
MFI Furniture Group Plc		Approve remuneration report (10)	Y	AG	1	0	0	0	0	2	0	0	Y
Wm Morrison Supermarkets Plc		Re-election of Sir Ken Morrison (4)	Y	F	0	0	0	0	1	2	1	1	Y
Reckitt Benckiser Plc		Approve remuneration report (2)	Y	AG	1	0	0	0	0	0	0	0	Y
J Sainsbury Plc		Approve remuneration report (2)	Y	AG	3	1	0	0	0	2	2	1	Y
Travis Perkins Plc		Approval of remuneration report (9)	Y	AG	1	0	0	0	0	0	0	0	Y
Ultra Electronics		Re-election of Julian Blogh (5)	Y	F	1	0	0	0	0	0	0	0	Y
22/04/2005		Re-election of Julian Blogh (5)	Y	F	1	0	0	0	0	0	0	0	Y
United Business Media		Approve remuneration report (2)	Y	ABS	1	0	0	0	0	0	0	0	Y
WPP Group Plc		Re-election of Stanley Morten (7)	Y	AG	1	1	0	0	1	1	0	0	Y
Xstrata Plc		Approve Added Value Incentive Plan (9)	Y	F	1	0	0	0	0	0	0	0	Y

HSBC

Company and date of meeting

Resolution (resolution number)

Interest held at meeting date

Yes/No

Voted for (F)/against (AG)/conscious abstention (Abs)

Contact with company secretary in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with chair or other non-executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Barclays Plc

Re-election of Matthew Barrett (5)

Berkeley Group

Approve LTIP (2)

17/09/2004

British Sky Broadcasting Group Plc

Approve Rule 9 waiver (16)

Carnival Plc

Re-election of Micky Arison (1)

Carphone Warehouse Group Plc

Approve Performance Share Plan (8)

Diageo Plc

Amend LTIP (19)

Jardine Lloyd Thompson

Re-election of Rodney Leach (3)

Lonmin Plc

Approve remuneration report (2)

MFI Furniture Group Plc

Approve remuneration report (10)

Wm Morrison Supermarkets Plc

Re-election of Sir Ken Morrison (4)

Reckitt Benckiser Plc

Approve remuneration report (2)

J Sainsbury Plc

Approve remuneration report (2)

Travis Perkins Plc

Approval of remuneration report (9)

Ultra Electronics

Re-election of Julian Blogh (5)

United Business Media

Approve remuneration report (2)

WPP Group Plc

Re-election of Stanley Morten (7)

Xstrata Plc

Approve Added Value Incentive Plan (9)

Insight Investment

Company and date of meeting

Resolution (resolution number)

Interest held at meeting date

Yes/No

Voted for (F)/against (AG)/conscious abstention (Abs)

Contact with company secretary in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with chair or other non-executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Barclays Plc

Re-election of Matthew Barrett (5)

Berkeley Group

Approve LTIP (2)

ABS

British Sky Broadcasting Group Plc

Approve Rule 9 waiver (16)

Carnival Plc

Re-election of Micky Arison (1)

Carphone Warehouse Group Plc

Approve Performance Share Plan (8)

Diageo Plc

Amend LTIP (19)

Jardine Lloyd Thompson

Re-election of Rodney Leach (3)

Lonmin Plc

Approve remuneration report (2)

ABS

MFI Furniture Group Plc

Approve remuneration report (10)

Wm Morrison Supermarkets Plc

Re-election of Sir Ken Morrison (4)

Reckitt Benckiser Plc

Approve remuneration report (2)

J Sainsbury Plc

Approve remuneration report (2)

Travis Perkins Plc

Approval of remuneration report (9)

Ultra Electronics

Re-election of Julian Blogh (5)

United Business Media

Approve remuneration report (2)

WPP Group Plc

Re-election of Stanley Morten (7)

Xstrata Plc

Approve Added Value Incentive Plan (9)

JP Morgan Asset Management

Company and date of meeting

Resolution (resolution number)

Interest held at meeting date

Yes/No

Voted for (F)/against (AG)/conscious abstention (Abs)

Contact with company secretary in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with chair or other non-executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Barclays Plc

Re-election of Matthew Barrett (5)

Berkeley Group

Approve LTIP (2)

British Sky Broadcasting Group Plc

Approve Rule 9 waiver (16)

Carnival Plc

Re-election of Micky Arison (1)

Carphone Warehouse Group Plc

Approve Performance Share Plan (8)

Diageo Plc

Amend LTIP (19)

Jardine Lloyd Thompson

Re-election of Rodney Leach (3)

Lonmin Plc

Approve remuneration report (2)

MFI Furniture Group Plc

Approve remuneration report (10)

Wm Morrison Supermarkets Plc

Re-election of Sir Ken Morrison (4)

ABS

Reckitt Benckiser Plc

Approve remuneration report (2)

J Sainsbury Plc

Approve remuneration report (2)

Travis Perkins Plc

Approval of remuneration report (9)

Ultra Electronics

Re-election of Julian Blogh (5)

United Business Media

Approve remuneration report (2)

WPP Group Plc

Re-election of Stanley Morten (7)

ABS

Xstrata Plc

Approve Added Value Incentive Plan (9)

Legal & General Investment Management

Company and date of meeting

Resolution (resolution number)

Interest held at meeting date

Yes/No

Voted for (F)/against (AG)/conscious abstention (Abs)

Contact with company secretary in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with chair or other non-executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Barclays Plc

Re-election of Matthew Barrett (5)

Berkeley Group

Approve LTIP (2)

British Sky Broadcasting Group Plc

Approve Rule 9 waiver (16)

Carnival Plc

Re-election of Micky Arison (1)

Carphone Warehouse Group Plc

Approve Performance Share Plan (8)

Diageo Plc

Amend LTIP (19)

Jardine Lloyd Thompson

Re-election of Rodney Leach (3)

Lonmin Plc

Approve remuneration report (2)

MFI Furniture Group Plc

Approve remuneration report (10)

Wm Morrison Supermarkets Plc

Re-election of Sir Ken Morrison (4)

Reckitt Benckiser Plc

Approve remuneration report (2)

J Sainsbury Plc

Approve remuneration report (2)

Travis Perkins Plc

Approval of remuneration report (9)

Ultra Electronics

Re-election of Julian Blogh (5)

United Business Media

Approve remuneration report (2)

WPP Group Plc

Re-election of Stanley Morten (7)

Xstrata Plc

Approve Added Value Incentive Plan (9)

M&G Investments

Company and date of meeting

Resolution (resolution number)

Interest held at meeting date

Yes/No

Voted for (F)/against (AG)/conscious abstention (Abs)

Contact with company secretary in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with chair or other non-executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Barclays Plc

Re-election of Matthew Barrett (5)

Berkeley Group

Approve LTIP (2)

British Sky Broadcasting Group Plc

Approve Rule 9 waiver (16)

Carnival Plc

Re-election of Micky Arison (1)

Carphone Warehouse Group Plc

Approve Performance Share Plan (8)

Diageo Plc

Amend LTIP (19)

Jardine Lloyd Thompson

Re-election of Rodney Leach (3)

Lonmin Plc

Approve remuneration report (2)

MFI Furniture Group Plc

Approve remuneration report (10)

Wm Morrison Supermarkets Plc

Re-election of Sir Ken Morrison (4)

Reckitt Benckiser Plc

Approve remuneration report (2)

J Sainsbury Plc

Approve remuneration report (2)

Travis Perkins Plc

Approval of remuneration report (9)

Ultra Electronics

Re-election of Julian Blogh (5)

United Business Media

Approve remuneration report (2)

WPP Group Plc

Re-election of Stanley Morten (7)

Xstrata Plc

Approve Added Value Incentive Plan (9)

ABS

Morley Fund Management

Company and date of meeting	Resolution (resolution number)		Interest held at meeting date Yes/No	Voted for (F)/against (AG)/conscious abstention (Abs)	Contact with company secretary in prior 6 months to meeting (Please put NK if the information is not known)			Contact with executive director(s) in prior 6 months to meeting (Please put NK if the information is not known)			Contact with chair or other non-executive director(s) in prior 6 months to meeting (Please put NK if the information is not known)
Company and date of meeting	Resolution (resolution number)		Interest held at meeting date Yes/No	Voted for (F)/against (AG)/conscious abstention (Abs)	Number of Telephone Call(s)	Number of Letter(s)	Number of Meeting(s)	Number of Telephone Call(s)	Number of Letter(s)	Number of Meeting(s)	Number of Telephone Call(s)	Number of Letter(s)	Number of Meeting(s)
Barclays Plc	Re-election of Matthew Barrett (5)		Y	F	1	0	0	0	0	1	0	0	1
Berkeley Group	Approve LTIP (2)		Y	ABS	0	0	0	0	0	0	1*	2*	1
British Sky Broadcasting Group Plc	Approve Rule 9 waiver (16)		Y	F	2	2	0	0	0	0	0	0	1
Carnival Plc	Re-election of Micky Arison (1)		Y	AG	1	1	0	0	0	0	0	0	0
Carphone Warehouse Group Plc	Approve Performance Share Plan (8)		Y	F	1	0	0	0	0	0	0	0	1
Diageo Plc	Amend LTIP (19)		Y	AG	0	1	0	0	0	0	0	1	0
Jardine Lloyd Thompson	Re-election of Rodney Leach (3)		Y	AG	0	2	0	0	0	0	0	0	0
Lonmin Plc	Approve remuneration report (2)		Y	AG	1	0	0	0	0	0	0	0	0
MFI Furniture Group Plc		Approve remuneration report (10)	Y	ABS	1	0	0	0	0	0	0	0	0
Wm Morrison Supermarkets Plc		Re-election of Sir Ken Morrison (4)	Y*	F	1	1	0	0	0	1	0	0	0
Reckitt Benckiser Plc		Approve remuneration report (2)	Y*	AG	0	0	0	0	0	0	0	0	1
J Sainsbury Plc		Approve remuneration report (2)	Y	F	1	0	0	0	0	0	1	0	1
Travis Perkins Plc		Approval of remuneration report (9)	Y	F	1	0	0	0	0	0	0	0	0
Ultra Electronics		Re-election of Julian Blogh (5)	Y	F	0	2	0	0	0	0	0	0	1
United Business Media		Approve remuneration report (2)	Y	AG	1	0	0	0	0	0	0	0	0
WPP Group Plc		Re-election of Stanley Morten (7)	Y	ABS	1	1	0	0	0	0	0	0	0
Xstrata Plc		Approve Added Value Incentive Plan (9)	Y*	AG	0	0	0	0	0	0	0	0	0

Notes :

For meetings where there is an asterix (*) in the 'Interest held at meeting date' column, this highlights that Morley only had a passive holding (index and core funds only) at the meeting date.

Included within the 'contact with the Company Secretary' column is communication with the Company's Investor Relations department.

It is increasingly common for Morley to communicate issues through the Company's advisers, especially with Remuneration Consultants for proposed changes to Executive remuneration. The majority of companies actually put their Remuneration Consultants' contact details in their initial letter to investors on proposed remuneration changes. Hence, where we have marked with an asterix (*) in the 'contact with Chairman or non-executive directors' column, this includesanyengagement with the Company's advisers on the specific issue.

In order for us to ensure our engagement process in as efficient as possible, we very frequently email companies with our views or concerns to specific issues rather than writing letters. Hence, included in the 'number of letters' columns are our emails to companies.

Newton Investment Management

Company and date of meeting

Resolution (resolution number)

Interest held at meeting date

Yes/No

Voted for (F)/against (AG)/conscious abstention (Abs)

Contact with company secretary in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with chair or other non-executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Barclays Plc

Re-election of Matthew Barrett (5)

Berkeley Group

Approve LTIP (2)

ABS

British Sky Broadcasting Group Plc

Approve Rule 9 waiver (16)

Carnival Plc

Re-election of Micky Arison (1)

Carphone Warehouse Group Plc

Approve Performance Share Plan (8)

Diageo Plc

Amend LTIP (19)

Jardine Lloyd Thompson

Re-election of Rodney Leach (3)

Lonmin Plc

Approve remuneration report (2)

MFI Furniture Group Plc

Approve remuneration report (10)

Wm Morrison Supermarkets Plc

Re-election of Sir Ken Morrison (4)

Reckitt Benckiser Plc

Approve remuneration report (2)

J Sainsbury Plc

Approve remuneration report (2)

Travis Perkins Plc

Approval of remuneration report (9)

Ultra Electronics

Re-election of Julian Blogh (5)

United Business Media

Approve remuneration report (2)

WPP Group Plc

Re-election of Stanley Morten (7)

Xstrata Plc

Approve Added Value Incentive Plan (9)

Railpen

Company and date of meeting

Resolution (resolution number)

Interest held at meeting date

Yes/No

Voted for (F)/against (AG)/conscious abstention (Abs)

Contact with company secretary in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with chair or other non-executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Barclays Plc

Re-election of Matthew Barrett (5)

Berkeley Group

Approve LTIP (2)

British Sky Broadcasting Group Plc

Approve Rule 9 waiver (16)

Carnival Plc

Re-election of Micky Arison (1)

Carphone Warehouse Group Plc

Approve Performance Share Plan (8)

Diageo Plc

Amend LTIP (19)

Jardine Lloyd Thompson

Re-election of Rodney Leach (3)

Lonmin Plc

Approve remuneration report (2)

MFI Furniture Group Plc

Approve remuneration report (10)

1 (cancelled, due to David Jones' illness)

Wm Morrison Supermarkets Plc

Re-election of Sir Ken Morrison (4)

ABS

Reckitt Benckiser Plc

Approve remuneration report (2)

J Sainsbury Plc

Approve remuneration report (2)

Travis Perkins Plc

Approval of remuneration report (9)

Ultra Electronics

Re-election of Julian Blogh (5)

United Business Media

Approve remuneration report (2)

WPP Group Plc

Re-election of Stanley Morten (7)

Xstrata Plc

Approve Added Value Incentive Plan (9)

Standard Life Investments

Company and date of meeting

Resolution (resolution number)

Interest held at meeting date

Yes/No

Voted for (F)/against (AG)/conscious abstention (Abs)

Contact with company secretary in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with chair or other non-executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Barclays Plc

Re-election of Matthew Barrett (5)

Berkeley Group

Approve LTIP (2)

British Sky Broadcasting Group Plc

Approve Rule 9 waiver (16)

Carnival Plc

Re-election of Micky Arison (1)

Carphone Warehouse Group Plc

Approve Performance Share Plan (8)

Diageo Plc

Amend LTIP (19)

Jardine Lloyd Thompson

Re-election of Rodney Leach (3)

Lonmin Plc

Approve remuneration report (2)

MFI Furniture Group Plc

Approve remuneration report (10)

Wm Morrison Supermarkets Plc

Re-election of Sir Ken Morrison (4)

Reckitt Benckiser Plc

Approve remuneration report (2)

ABS

J Sainsbury Plc

Approve remuneration report (2)

Travis Perkins Plc

Approval of remuneration report (9)

Ultra Electronics

Re-election of Julian Blogh (5)

United Business Media

Approve remuneration report (2)

WPP Group Plc

Re-election of Stanley Morten (7)

Xstrata Plc

Approve Added Value Incentive Plan (9)

Threadneedle Asset Management

Company and date of meeting

Resolution (resolution number)

Interest held at meeting date

Yes/No

Voted for (F)/against (AG)/conscious abstention (Abs)

Contact with company secretary in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with chair or other non-executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Barclays Plc

Re-election of Matthew Barrett (5)

Berkeley Group

Approve LTIP (2)

British Sky Broadcasting Group Plc

Approve Rule 9 waiver (16)

Carnival Plc

Re-election of Micky Arison (1)

Carphone Warehouse Group Plc

Approve Performance Share Plan (8)

Diageo Plc

Amend LTIP (19)

Jardine Lloyd Thompson

Re-election of Rodney Leach (3)

Lonmin Plc

Approve remuneration report (2)

MFI Furniture Group Plc

Approve remuneration report (10)

Wm Morrison Supermarkets Plc

Re-election of Sir Ken Morrison (4)

Reckitt Benckiser Plc

Approve remuneration report (2)

J Sainsbury Plc

Approve remuneration report (2)

Travis Perkins Plc

Approval of remuneration report (9)

Ultra Electronics

Re-election of Julian Blogh (5)

United Business Media

Approve remuneration report (2)

WPP Group Plc

Re-election of Stanley Morten (7)

Xstrata Plc

Approve Added Value Incentive Plan (9)

USS

Company and date of meeting

Resolution (resolution number)

Interest held at meeting date

Yes/No

Voted for (F)/against (AG)/conscious abstention (Abs)

Contact with company secretary in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with chair or other non-executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Barclays Plc

Re-election of Matthew Barrett (5)

ABS

Berkeley Group

Approve LTIP (2)

British Sky Broadcasting Group Plc

Approve Rule 9 waiver (16)

ABS

Carnival Plc

Re-election of Micky Arison (1)

Carphone Warehouse Group Plc

Approve Performance Share Plan (8)

Diageo Plc

Amend LTIP (19)

ABS

Jardine Lloyd Thompson

Re-election of Rodney Leach (3)

Lonmin Plc

Approve remuneration report (2)

ABS

MFI Furniture Group Plc

Approve remuneration report (10)

Wm Morrison Supermarkets Plc

Re-election of Sir Ken Morrison (4)

Reckitt Benckiser Plc

Approve remuneration report (2)

J Sainsbury Plc

Approve remuneration report (2)

Travis Perkins Plc

Approval of remuneration report (9)

Ultra Electronics

Re-election of Julian Blogh (5)

United Business Media

Approve remuneration report (2)

WPP Group Plc

Re-election of Stanley Morten (7)

Xstrata Plc

Approve Added Value Incentive Plan (9)

Baillie Gifford

Company and date of meeting

Resolution (resolution number)

Interest held at meeting date

Yes/No

Voted for (F)/against (AG)/conscious abstention (Abs)

Contact with company secretary in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Contact with chair or other non-executive director(s) in prior 6 months to meeting

(Please put NK if the information is not known)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Number of Telephone Call(s)

Number of Letter(s)

Number of Meeting(s)

Diageo Plc

Amend LTIP (19)

20/10/2004

Jardine Lloyd Thompson

Re-election of Rodney Leach (3)

28/04/2005

Travis Perkins Plc

Approval of remuneration report (9)

ABS

27/04/2005

PIRC

Company and date of meeting	Resolution (resolution number)	Voted for (F)/against (AG)/conscious abstention (Abs)
Company and date of meeting	Resolution (resolution number)	Voted for (F)/against (AG)/conscious abstention (Abs)
Barclays Plc	Re-election of Matthew Barrett (5)	AG
Berkeley Group	Approve LTIP (2)	AG
British Sky Broadcasting Group Plc	Approve Rule 9 waiver (16)	F
Carnival Plc	Re-election of Micky Arison (1)	AG
Carphone Warehouse Group Plc	Approve Performance Share Plan (8)	AG
Diageo Plc	Amend LTIP (19)	AG
Jardine Lloyd Thompson	Re-election of Rodney Leach (3)	AG
Lonmin Plc	Approve remuneration report (2)	AG
MFI Furniture Group Plc	Approve remuneration report (10)	AG
Wm Morrison Supermarkets Plc	Re-election of Sir Ken Morrison (4)	AG
Reckitt Benckiser Plc	Approve remuneration report (2)	AG
J Sainsbury Plc	Approve remuneration report (2)	AG
Travis Perkins Plc	Approval of remuneration report (9)	ABS
Ultra Electronics	Re-election of Julian Blogh (5)	AG
United Business Media	Approve remuneration report (2)	AG
WPP Group Plc	Re-election of Stanley Morten (7)	F
Xstrata Plc	Approve Added Value Incentive Plan (9)	AG

Voting analysis

Company	Resolution (resolution number)
Company	Resolution (resolution number)	Votes For	Votes Against	Abstentions	Did not vote
Barclays Plc	Re-election of Matthew Barrett (5)	21	0	3	1
Berkeley Group	Approve LTIP (2)	5	8	3	0
British Sky Broadcasting	Approve Rule 9 waiver (16)	7	12	3	0
Carnival Plc	Re-election of Micky Arison (1)	15	6	2	0
Carphone Warehouse	Approve Performance Share Plan (8)	17	1	1	0
Diageo Plc	Amend LTIP (19)	11	11	2	1
Jardine Lloyd Thompson	Re-election of Rodney Leach (3)	16	3	0	0
Lonmin Plc	Approve remuneration report (2)	5	13	2	1
MFI Furniture	Approve remuneration report (10)	5	10	4	0
Wm Morrison	Re-election of Sir Ken Morrison (4)	17	2	3	0
Reckitt Benckiser Plc	Approve remuneration report (2)	10	13	1	1
J Sainsbury	Approve remuneration report (2)	10	9	0	0
Travis Perkins Plc	Approval of remuneration report (9)	12	4	4	0
Ultra Electronics	Re-election of Julian Blogh (5)	15	1	1	0
United Business Media	Approve remuneration report (2)	2	15	3	0
WPP Group Plc	Re-election of Stanley Morten (7)	14	2	6	0
Xstrata Plc	Approve Added Value Incentive Plan (9)	10	10	3	1

Section three

Voting and Engagement Processes

Introduction

Part Two of the survey is intended to find out more about the policies and practices that lie behind institutional investors' voting and engagement activity. New questions in this year's survey included those relating to definitions of engagement, attitudes to differential pension provision and views on the Government's abolition of the Operating and Financial Review.

Have you considered whether or to what extent you comply with 'The Responsibilities of Institutional Shareholders and Agents - Statement of Principles' (Institutional Shareholders' Committee, October 2002)?

Once again in this year's survey several respondents gave answers that did not directly answer this question. However just over half of those replying said that they believe they do comply with the ISC principles, with two more saying that they strove to comply or largely complied with the principles.

The TUC believes that responses to this question indicate that the ISC principles have had at least some impact in terms of encouraging fund managers to consider their policies in relation to ownership responsibilities.

Approximately what proportion of contracts with clients refer to 'The Responsibilities of Institutional Shareholders and Agents - Statement of Principles'?

Five respondents to this question indicated that none of their contracts with clients refer to the ISC principles. Several more stated that very few of their contracts made reference to the principles, and a number said that they were unable to tell the proportion of contracts with such a reference.

More positively one organisation stated that all of its contracts referred to the ISC principles, which had been achieved by revisiting all existing client contracts, and by ensuring that all new contracts included such a reference.

Does your organisation have a definition of the activity that constitutes 'engagement'? If yes, please provide details.

Several organisations responding to this question stated outright that they do not have or utilise a formal definition of engagement. Many others did not answer the question directly but instead gave answers outlining what they believed engagement activity encompassed. This suggests that they too do not work to a formal definition of engagement.

Four organisations indicated that they had defined engagement activity, and two more had something close to a formal definition. In two cases organisations had a series of themes or principles that covered engagement.

What is most striking about the answers to this question is the wide spread of views of what engagement covers. A small number of organisations take a wide view that starts with engagement being an attempt to understand companies properly, and only develops into interaction with the company over specific concerns where necessary. Others see engagement specifically as a dialogue that seeks to effect change, or that has pre-determined objectives.

Notably many respondents indicated that engagement activity included environmental and social issues in addition to corporate governance. There were limited references to company strategy.

Whilst some diversity of views might be desirable, such fundamental differences in conceptions of engagement maybe problematic. It may be a block to understanding on the part of both clients and investee companies of what might reasonably be expected.

Do you have a formal policy for communicating voting intentions to investee companies? In the case where you intend to vote against management, is there a formal engagement process prior to the vote being lodged?

Responses to this question indicated that there are significant differences in the way that investment organisations address voting and engagement policy. For example, three fund managers stated that they had no formal policy for reporting voting decisions to companies. Several other managers said that they sought to inform companies when they were not supporting management, or gave unclear answers.

Around half of the respondents said that they let companies know when they intended to vote against an item, and a smaller number said that they also informed the companies if they intended to abstain. Three managers said that their approach was determined by the size of their holding in the company.

In terms of the wider engagement with companies around votes again there was a range of approaches. Several managers said that they decided their approach on a case by case basis, others said that they always engaged with companies.

A small number of managers indicated that they had policies in place which defined the nature of their engagement. For example one said that they would write to the company in the case of abstentions, whilst they would seek to speak to a company official where they voted against. Another said they would write to companies about minor issues, but seek to speak to them about serious concerns.

Some managers indicated that they also sought engagement with companies around broader issues. One indicated unspecified 'non-voting issues' which fell below best practice. Another indicated that it wrote to all companies ahead of their AGMs to make clear their policy of not supporting the adoption of the report and accounts where disclosure on social, environmental and ethical issues was not sufficient. Finally, one manager indicated that it also sought to engage with some of its non-UK companies.

It is clear that approaches to voting and engagement vary significantly. Some investors seem to have no contact with companies around voting decisions. At the other extreme one manager says that votes against management without accompanying engagement are 'essentially meaningless'. This suggests the need for clients to exercise greater scrutiny of how various service providers address such questions, as the choice of fund manager could have a significant impact on the type of activity undertaken.

Do you report any voting information publicly? Do you have any plans to voluntarily report such information in the future?

Of those responding to this question, a total of four organisations report their full voting records. A further three organisations provided limited information publicly, such as a statistical breakdown of votes cast over a particular period. The remaining respondents reported that they do not disclose any voting information publicly.

Of those organisations that provide limited voting information, or none at all, four said that they hoped to in future. One of these organisations has expressed a similar aspiration in previous years.

Of the remaining organisations seven stated outright that they did not have plans to report publicly in future, with others not disclosing future plans. Two organisations stated that they could not report publicly due to client confidentiality.

The TUC believes that responses to this question indicate that despite the Government's decision to take a power that would mandate disclosure, which gives a clear signal that public disclosure is desirable, many fund managers will not embrace transparency voluntarily.

Do you disclose engagement activity undertaken, excluding voting, either to clients or publicly?

A majority of respondents to this question reported that they reported engagement activity to their clients. Seemingly this is typically part of general reporting to clients along with voting decisions that have been taken. One manager stated that they make an annual report back to clients on voting and engagement activity. One pension fund stated that it reports back to its trustee board on engagement.

A total of four managers provide at least some engagement activity publicly, typically by posting reports on such activity on the internet. In one case the organisation provides a detailed online breakdown of engagement activity carried out in relation to specific companies. A number of fund managers said that they would not be willing to report engagement activity publicly as it might damage the relationship with companies.

Four respondents said that they only reported engagement activity to clients where this had been requested, and one organisation stated that it did not report engagement activity at all.

What proportion of clients retain voting rights themselves?

Once again there was a wide range of answers to this question. Over half said that a very low proportion of their clients (ie under 1 per cent) retained voting rights themselves, with some reporting that no clients did.

At the other extreme one manager reported that almost half of their clients retained voting rights, although as a proportion of assets under management this represented only 20 per cent of the total. Another manager put the figure at approximately 20 per cent of clients, and two others said the figure was around 10 per cent.

Overall we do not detect a significant change compared to last year's survey suggesting there is no widespread movement for pension funds to take control of their voting rights.

How do you deal with clients in pooled funds that wish to override your voting policy and issue their own voting instructions?

Eight of the respondents to this question stated simply that clients cannot override the voting policy in a pooled fund, and it was implied that it was not possible in another case. Another manager said that it was not normally possible to override voting policy. A number of other respondents did not answer the question directly, stating that the scenario had never arisen or was not applicable.

Overall ten respondents said that it would be possible to override the policy in a pooled fund, with one manager stating that there would be a cost involved for the client. Most said this could be done by calculating the investor's proportionate ownership of the company in question, one manager the client could change the custodial relationship.

It is clear that a small number of respondents had already been asked by clients to apply an override, and in at least one case there is a system in place for dealing with such requests.

Do you use any third party voting execution or voting advice services?

Research Recommendations Electronic Voting (RREV), the joint venture between ISS and the National Association of Pension Funds, was the provider most often mentioned by respondents to this question. A total of fourteen organisations said that they subscribed to the service. The other most commonly mentioned services were the Association of British Insurers' IVIS, used by 13 organisations, and PIRC, used by seven. Glass Lewis was used by two respondents, with Manifest and Boardex used by one each.

Have there been any instances where votes have not been delivered, or not cast as intended?

A total of ten respondents to this question said that they had not come across cases of votes not being delivered or being wrongly cast, though in some cases the manager said they were 'not aware' of such cases.

However the remainder of the respondents, over half the total, said that they had experienced such problems. No respondents referred to votes being cast incorrectly, rather votes were not delivered. Many respondents stressed that such cases were very rare and that where it did happen a review was undertaken to identify the problem and correct it. One respondent reported that its custodian had a staff member dedicated to ensuring that the voting system worked effectively.

One manager reported that they had experienced significant difficulties with their voting system in 2005 and that discussions were underway with back office and voting service providers to identify the problems and rectify them.

What procedures are in place in terms of exercising the voting rights of stock that has been lent? Have there been any instances where you have been unable to exercise voting rights because stock has been lent?

A number of fund managers responding to this question stated that they have a policy not to lend stock. Of these, two managers went on to say that where clients lend stock they can recall it for the purposes of voting on a cases by case basis.

Many of the other respondents said that where stock has been lent it is recalled for voting purposes where there are contentious or significant economic issues at stake. Examples of the latter given by respondents included takeover bids or hostile shareholder actions. One fund manager said that recalls of stock for voting happened three to five times a year. At the other extreme one manager said that it always recalled stock for voting.

Two managers said that they had experienced a very small number of cases where they had been unable to exercise voting rights because of stock-lending.

Are there instances where you use the exercise of voting rights as a way to address issues of corporate social responsibility? Where this is the case briefly explain the criteria used to assess company performance, and which voting issues are used (e.g. re-election of directors, adoption of annual report and accounts, etc).

A total of seven respondents to this question said explicitly that they do not use voting rights to address CSR issues, five respondents that that they rarely used voting rights or had done so on occasion in the past. A number of managers said this was because they felt that engagement was a better way to address such concerns with invest companies. In addition some managers stressed that issues coming to vote by shareholders rarely had a direct link to CSR, for example a resolution put forward by an NGO.

Four respondents stated that they would consider voting against adopting the report and accounts of a company where disclosure on social, environmental and ethical issues was not sufficient. Two of these four respondents said they would also consider voting against the election of a relevant director if a company had a poor CSR record. Finally two other respondents said that they integrated analysis of CSR issues into their voting decisions.

Do you research companies' policy and practices in relation to employment relations and work organisation for i) mainstream investment decisions and/or ii) socially responsible investment funds? Please give details of any specific information sought (ie union recognition, adherence to ILO core labour standards, participation in the Corporate Health and Safety Performance Index, human capital management benchmarks etc).

This question yielded a broad spectrum of responses. Three respondents stated outright that they do not research employment and work organisation issues at all. Several more said that they seek to integrate understanding of such issues into their investment analysis, or that they examine employment factors only where they are relevant to the business in question. This particularly related to mainstream investment analysis.

Two respondents said that they would consider such factors when this was requested by clients, with one stating that some charity clients required them to look at employment issues alongside other CSR questions.

A number of fund managers reported that they do consider employment factors in respect of socially responsible investment (SRI) funds. In such cases factors commonly considered issues include adherence to principles such as ILO core labour principles and the Universal Declaration of Human Rights, and data on health and safety. Other factors mentioned by one of more fund manager included the OECD guidelines on multinational enterprises, union relations and membership, equal opportunities policy and stress.

Looking at the issue of human capital metrics, a small number of fund managers said they do consider some data, at least on an ad hoc basis, with one manager saying they were considering how to factor this into mainstream investment analysis. One manager stated they were particularly interested in how human capital management might affect the service and creative sectors.

It is clear that there is a wide variation in the extent to which, if at all, employment issues are factored into investment analysis. As a result the TUC believes that there is a need for more detailed research on how fund managers address employment relations and work organisation. This would both provide a spur for service providers to effectively research these factors, and provide more information to trade unionists who are investing assets.

Does your organisation take a position on differential pension provision for directors (ie more generous accrual or contribution rates than those available to other employees in the same organisation)? Please give details of any voting or engagement activity undertaken.

Perhaps unsurprisingly the vast majority of respondents said that their organisation does not take a particular position on differential pensions provision. Many said that they looked at pensions arrangements as part of the overall remuneration package rather than as an issue on its own. One respondent stated that they see such arrangements as market practice.

However one manager reported that they normally oppose differential arrangements and two others said they believed arrangements should be broadly similar, with one arguing that new arrangements in particular should be similar. Another respondent reported that they had engaged with companies on this issue, although not voted against pay policies as a result.

Finally one manager drew attention to guidance from the Performance Pay Group (PPG), an informal network of investors with an interest in remuneration issues. According to this respondent the PPG guidelines on this issue state: 'shareholders expect pension arrangements for senior executives to be similar to those of other employees of the company. Where executive pension arrangements are different, how this forms part of total remuneration needs to be explained and the arrangements justified in terms of their alignment with the interests of shareholders.'

What impact, if any, do you think the Government's decision to abolish mandatory Operating and Financial Reviews will have?

There was a significant degree of consensus in the responses to this question, clustered around several themes. The first theme was that the abolition of mandatory OFRs was likely to mean that less useful information would be available to shareholders. Specifically some fund managers mentioned the forward-looking nature of reporting planned in the OFR, one manager also said it would lead to less reporting on extra-financial information.

The second common theme, in contrast, was that many businesses, particularly larger companies, would continue to report in a way which, while it may not match the levels required by the OFR, would still provided significant information to investors. Some said that this was in part because of the preparation companies had made to produce OFRs.

Finally there was a slightly lower level of consensus that the abolition of the OFR had created confusion, both for companies and their investors. One manager said abolishing the OFR without consultation had taken the City by surprise. Another said that they abolition risked damaging the UK's reputation as an international leader in promoting long-term business and investment practice. Another described the decision as 'a serious step backwards'.

However it is worth noting that there was some limited acceptance for the abolition of the OFR. One fund manager said that there was a substantial risk that the OFR would have lead to standardised 'boilerplate' reporting. Another stated that the main impact of the abolition would be to save money. Two managers said that they thought that the reversion to a Business Review would actually lead to better company reporting.

How many staff (excluding marketing) are employed by your organisation to work specifically on i) corporate governance and ii) corporate social responsibility issues?

Many respondents to this question said that their in-house teams covered both corporate governance and social responsibility issues. Across all the organisations providing some indication of the numbers of staff involved in dealing with these issues the average size of team (rounded down) was six staff. However this average is distorted by one well-known fund management organisation which has a very large team. If this organisation is excluded the average falls to approximately four staff, and this is a more accurate general reflection of the responses received.

At the extremes of the spectrum, three organisations said that they had no staff working specifically on either governance or CSR issues (two indicated this was because such issues were integrated into mainstream analysis). Two organisations indicated they only employed one staff member across governance and CSR issues, three organisations said that they employ two staff, and two organisations stated they employ three staff. At the other extreme one organisation employs 45 staff, and two employ 15 staff.

Finally it is notable that of the seven organisations that did split the numbers of staff working on governance and those working on CSR, in four cases more staff are employed to work on CSR issues.

Section four

Conclusions

Transparency

The number of organisations willing to provide comprehensive information to this year's survey should be encouraging for those who believe that institutional shareholders should be accountable for the way in which they exercise ownership. Respondents who are willing to participate in the survey, or report publicly, demonstrate a commitment to transparency and accountability. Those that report publicly also in effect refute arguments that such disclosure is legally problematic, overly time-consuming and costly.

Although the pensions and investment industry appears to increasingly accept that public reporting is both desirable and practically possible, there is still resistance from some investors. This year's survey demonstrates that a significant number of institutions still have no intention of providing voting data for public analysis.

As such, whilst moves towards voluntary disclosure are welcome, we are skeptical that the industry as a whole is likely to embrace transparency. If this is proved correct the TUC will lobby strongly for mandatory disclosure.

Outsourcing

Some have suggested that mandatory disclosure of voting records would encourage fund managers to outsource the voting process to an external agency, presumably in order to avoid controversy. Interestingly a small number of UK fund managers appear to have effectively already done this. None of these managers report publicly. This would suggest that the move to outsource voting is a broader industry trend unconnected to disclosure.

A broader question is whether such moves are a negative development or not. Smaller fund managers may recognise the need to be active in this area, but not feel able to resource voting and engagement activity effectively. They may therefore see outsourcing as a practical solution. Others may regard the separation of this function from investment activity as a misunderstanding of why ownership responsibilities matter.

Engagement

This year's survey has sought to capture engagement policies and activity along with voting data. This is in no small part because of comments from several fund managers that voting data provides a very limited picture of activity undertaken and does not explain the context in which decisions were taken.

With this background, there are several messages that might be drawn from this year's survey. The first is that many investment organisations do not currently keep a comprehensive record of the engagement activity they undertake. A number of organisations stated in their responses that there had been more activity but that they had not kept details. Secondly, it is clear that what is encompassed by 'engagement' is still very loosely defined. This may in part explain why many fund managers do not record all relevant information.

This lack of a clear definition affects both ends of the market. Those who carry out little activity might claim any interaction with companies under the engagement banner. At the other extreme managers who take ownership responsibilities very seriously may feel that the effort they put in is not being captured by current analysis of voting and engagement.

This leads onto the final message that might be drawn from the survey, which is the difficulty in assessing fund manager competency. For example, a fund manager may seem to vote regularly with management, even where there are controversial issues on the agenda, but their engagement data may indicate a high level of contact with the companies in question. Should clients infer that the fund manager is making more informed decisions, or that the manager is easily talked round into supporting controversial proposal?

Similarly what consideration should be given to the size of the manager? It is clear from responses to the survey that larger managers tend to have more staff dedicated to these issues. Is it reasonable for trustees to expect a high level of commitment from smaller managers?

This suggests that there is a need to develop tools which will enable clients and their advisers to fairly and effectively assess fund manager competency and practice in relation to voting and engagement.

Looking ahead

As we have stated previously, the TUC believes that the annual survey has already played a role in encouraging trustees to think more about corporate governance and voting and engagement. It has also added to the debate around voting disclosure. We will continue to produce the survey annually.

The TUC now has voting data covering four years which is currently only available in the individual surveys in table format. It is our intention therefore to explore whether the information we hold could be made freely available online to trustees in a format which would enable them to manipulate the data to suit their own needs.

Appendix: Circulation and Response List

Full responses received directly from:

Aberdeen Asset Management
Barclays Global Investors
Baring Asset Management
Britannic Asset Management
British Airways Pensions Investment
Cazenove Capital management
CCLA Investment Management
Co-operative Insurance Society
Credit Suisse Asset Management
F&C Asset Management
Fidelity Investments
Gartmore Investment Management
Glasgow Investment Managers
Henderson Global Investors
Hermes Pensions Management
HSBC
Insight Investment
JP Morgan Asset Management
M&G Investments
Morley Fund Management
Newton Fund Management
Pensions Investment Research Consultants
Railpen
Standard Life Investments
Threadneedle Asset Management
Universities Superannuation Scheme
Information supplied by trustees for:
Legal & General Investment Management
Baillie Gifford

The following managers only responded to Part 2 of the survey on voting policies, or provided some related information:

Baillie Gifford
Capital International Ltd
Legal & General Investment Management
Martin Currie Investment Management
Merrill Lynch Investment Managers
Scottish Widows Investment Partnership

The remaining organisations failed to respond or declined to take part:

Abbey National Asset Managers
ABN Amro Asset Management
Aerion Fund management
Axa Investment Managers
Deutsche Asset Management
Goldman Sachs Asset Management
Invesco Asset Management
Investec Asset Management
Lazard Asset Management
Morgan Stanley Investment Management
Old Mutual Asset Managers (UK)
RCM UK
RREV
Royal London Asset Management
Sarasin Chiswell
Schroder Investment Management
SG Asset Management
State Street Global Advisors United Kingdom
UBS Global Asset Management

[1] http://www.conference-board.org/publications/describe.cfm?id=1116

[2] http://www.unpri.org/

[3] http://www.icgn.org/organisation/src_consultation.php

[4] http://www.socialinvest.org/areas/news/041205-votingpractices.htm

[5] http://www.afscme.org/press/pr060328.htm

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