Agenda item

Report of the Executive Director Corporate Services

This report reviews the proxy voting carried out by the Pension Fund from 1^st January 2019 to 31^st December 2019. Advisory services are provided by Pensions & Investment Research Consultants Ltd (PIRC).

Consideration was given to a report of the Executive Director Corporate Services.

The Fund attached great importance to its voting rights on investments owned and had been voting on its shares at the Annual and Extraordinary General Meetings of companies since 1996, in order to add shareholder value by seeking to ensure that companies were soundly run. The Camden Pension Fund employed a corporate governance advisor, Pensions & Investment Research Consultants Ltd (PIRC), to review company voting resolutions and execute the proxy votes of the Fund in accordance with its policy.

The Committee noted the review and analysis of the voting that had been undertaken by the Fund during the calendar year to December 2019, as executed by PIRC and attached at Appendix A to the report.

Alan McDougall, Managing Director, PIRC, was in attendance at the meeting with Janice Hayward, Client Services Director and Ralph Neville Jones, Proxy Voting Service leader. Alan McDougall summarised the main findings of the report as follows:

·       During the period under review the fund voted 11,099 resolutions (2018: 11,495) at 767 meetings (2018: 828).

·       Of all meetings voted by the fund globally, 82.1% were AGMs (2018: 79%).

·       In broad terms 91.8% of the meetings were in the UK (2018: 92%), 3.7% were in Europe (2018: 4.8%) and 2.7% were in North America (2018: 2.2%).

·       The rest of the world accounted for 1.8% (2018: 1.1%) of all the meeting voted during 2019.

·       The fund supported 7,977 resolutions or 72% of the resolutions that it voted on.

·       Globally, the fund supported 76% of all directors who sought election.

·       In the UK, in the case of remuneration reports, the fund supported 42% (2018: 41%) of resolutions and opposed 58% (2018: 59%). In the case of remuneration policies, the fund opposed more resolutions (70% (2018:75%)) than it supported (30% (2018: 25%)).

·       In the UK, approving the appointment of the auditor, as a resolution category accounts for 352 of the resolutions voted, the fund opposed 221 of the resolutions voted in this category or 62.8%.

It was noted that the Ministry of Housing, Communities & Local Government (MHCLG) were due to publish a consultation to seek views on principles for a new code of practice on defined benefit pension scheme voting. The Head of Treasury and Financial Services said that Camden had not yet responded but would do so. Alan McDougall informed the Committee that the PIRC had responded separately from the LLAPF due to its diverse range of funds. The PIRC had replied that that it had found the proposed approach to be confusing and the aim of the consultation was not clear. 

With regard to table 2 “Voting Outcomes” on page 33 of the agenda, Councillor Madlani asked for the reason why there had been one abstention. The Committee also wanted to know more about the “non-votes”, in particular which of the votes related to SDG issues. Alan McDougall agreed to write to the Committee in respect of these issues.

          ACTION BY: Executive Director Corporate Services

It was noted that there was no information on the voting outcomes related to climate change issues as there was currently nothing in the guidelines relating to this. Councillor Madlani asked that a report be submitted next year which included voting outcomes relating to climate and ESG issues.

ACTION BY: Executive Director Corporate Services

The Committee was informed that the PIRC Spring Corporate Governance Round Up Seminar had been arranged to be held on 17^th March 2020 from 10am to 2pm in the Harvey Goodwin Room, Church House, Westminster, London, SW1P 3NZ. It was free to attend for all PIRC clients. It was agreed that the Committee Officer would circulate details to all Committee Members.

          ACTION BY: Executive Director Corporate Services

RESOLVED –

THAT the contents of this report be noted.