US firm Neuberger Berman has announced a proxy vote disclosure initiative to publicly disclose and explain the firm’s voting rationale and intentions at more than 25 annual shareholder meetings.
The group said governance and sustainability are becoming increasingly important, particularly amid the covid-19 crisis, as investors realise the impact these have on long-term performance.
As a result, it has launched NB25+ committing to revealing its vote intentions and reasoning behind these at 25 annual shareholder meetings.
The advance vote disclosure will be led by Neuberger Berman’s 600-strong investment team who continually engage with company executives. It said its aim is to “protect shareholder capital, fulfil fiduciary responsibilities to clients, promote transparency and accountability, and exceed regulatory requirements”.
George Walker, CEO at Neuberger Berman, said: “Leadership matters, especially in difficult periods. Firms with sustainable practices will be more resilient. Shareholders need to engage as owners for our capitalist system to work. Therefore, we have decided to step forward and share our thinking upfront on issues facing companies in which we invest. It can be tough to publicly challenge management or speak up for or against activists, but we think it’s more important now to make our voice heard as we seek to improve the firms in which we invest,”
NB25+ began disclosing on 3 April on the firm’s engagement and proxy voting website.
These include we voted against the executive compensation plan at Lennar Corp, and the election of the director currently chairing the compensation committee, and support for management at Adobe as well as a vote against a shareholder proposal regarding a median gender and racial pay equity report.
The firm plans to expand this initiative over time and calls upon other asset managers to join in disclosing their votes.
Jonathan Bailey (pictured), head of ESG investing at Neuberger Berman, said; “Some of the world’s most sophisticated asset owners disclose their votes in advance because they understand that it can help elevate the quality of corporate governance at companies. We think it is time for large asset managers to do the same.
“Our analysts and Portfolio Managers conduct thousands of engagements with companies each year, and we cast proxy votes based on our own guidelines and analysis. By disclosing key votes in advance, we hope that more companies will be clear about our expectations.”