Canadian Key Proxy Vote Survey

A quick plug for the annual proxy vote survey undertaken by SHARE plus the Columbia Institute and  Fonds de Solidarite FTQ. This is one of several survey undertaken by labour-oriented groups worldwide to assist trustees in holding asset managers accountable for how they vote.

The PDF is here.

SHARE Key Proxy Votes Survey

Canadian labour-friendly shareholder activist group SHARE has gone live with its latest annual voting survey. What's more they have made it a rather wonderful online resource, which you can play about with here.

It's really rather good!

Here's the press note on it.

Most shareholders continue voting with management on key issues including the Northern Gateway Project and SNC-Lavalin CEO’s generous severance package
VANCOUVER, BC – While the majority of shareholders continue to vote with management, a growing number of shareholders are giving more care and attention to how they vote, with several key votes in 2012 registering 20% or more of shareholders voting against management recommendations.
One highlighted issue is a shareholder proposal at Enbridge Inc. asking the company to report on the risks associated with First Nations’ opposition to the Northern Gateway pipeline. Nearly 30% of shareholders voted for the proposal, noting that First Nations’ consent plays a pivotal role in the future of the Enbridge proposal.
“The response on the Enbridge shareholder proposal illustrates that shareholders increasingly recognize the investment risks associated with social and environmental issues when they vote,” said Peter Chapman, Executive Director of the Shareholder Association for Research and Education (SHARE). “However many institutional investors, including charitable foundations and trusts, are not yet providing guidance to managers and proxy voting service firms to ensure that voting is aligned with their interests.”
The 2012 annual Key Proxy Vote Survey analyzed the voting records of 32 firms with combined Canadian equity holdings in excess of $58 billion in 2012. SHARE has been producing the survey since 2001 with the goal of making proxy voting more accessible and encouraging fiduciaries to more rigorously review the work of those that vote proxies on their behalf.
The vote result at SNC-Lavalin also illustrates the increasing willingness of shareholders to vote against management. At SNC-Lavalin’s shareholder meeting in May 2012, nearly one-quarter of votes were lodged against the executive compensation package offered to former CEO Pierre Duhaime, which included $1.9 million in salary continuance plus other benefits. This generous severance package was offered despite the on-going criminal investigation into corruption and bribery charges both in Canada and Libya during Mr. Duhaime’s tenure.
“In the realm of proxy voting, a vote of 25% against a severance package is a strong show of shareholder opposition” notes Laura O’Neill, SHARE’s Director of Law and Policy, “But one still wonders how more than 75% of shareholders voted in favour of the former CEO being rewarded so generously despite the significant loss in shareholder value on his watch.”
New this year, individuals and institutions can review select proxy voting decisions of participating fund managers and proxy service firms online and find out exactly how they voted on key issues. “It is important to have a resource that makes proxy voting practises easily accessible to pension fund trustees and other fiduciaries,” said Charley Beresford, Executive Director of the Columbia Institute, one of the report’s sponsors. “The proxy survey website allows shareholders to review how their proxy firm voted on environmental, social or governance issues with the click of a mouse.”

SHARE proxy voting survey

Wow, amazing to see that the SHARE voting survey is 10 years old. I think that must mean the TUC one would be in its tenth edition next year. Anyway, interesting to note that again its an organisation with roots in the labour movement that got there first in terms of researching shareholder engagement.

Download it here.

Belated plug

For an excellent analysis (PDF) of voting by Canadian mutual funds produced by the excellent SHARE and Fund Votes.

Links...

1. Canadian shareholder activists SHARE have published their annual manager voting survey (PDF)
2. There's a big push for support going on in respect of the resolutions at BP and Shell on tar sands.
3. Brendan Barber blogs on M&A. I think policy interest in this area is going to increase again.
4. FSA commentary on hedge funds is interesting, and doesn't actually surprise me.

SHARE report on mutual fund voting

The excellent Canadian labour-friendly shareholder activist group SHARE has issued an analysis of mutual fund voting in association with the ace FundVotes.com. Info here.

SHARE releases annual proxy voting survey

SHARE, the excellent Canadian labour-aligned shareholder activist group, produces one of the proxy voting surveys that trade unions have pioneered (note that unions got interested in analysing fund manager voting long before investment consultants). SHARE's annual survey has just appeared and can be downloaded here.

SHARE expands

A quick plug for the excellent work done by Canadian shareholder activist group SHARE. They are expanding staff wise and adding to their innovative shareholder resolution database. If only we had an outfit like them in all the markets with big pools of workers' capital.

SHARE newsletter

A quick plug for the always excellent SHARE newsletter which came out this week. You can access it here.

Canada needs say on pay

There's a good article from SHARE about the need for an advisory vote on exec pay in Canada on the Responsible Investor website here.

SHARE proxy voting survey

I admit I'm a geek about such things, but this is one of the things I look forward to each year - the publication of proxy voting research. It's always interesting to see how different fund managers stack up when it comes to the way they vote. Labour-aligned Canadian shareholder advocate SHARE has just published its annual survey which you can download here and the press release about the report is here. Definitely worth a read, if only to encourage trustees to take these things seriously. More importantly get control of those votes!

Investment concerns intensify in Burma

A shameless lift from the SHARE website:

The violent military crackdown on recent democracy protests in Burma have once again raised concerns for investors about social and financial risks associated with investments in Burma.

Foreign companies play a pivotal role in maintaining a steady flow of capital to the military dictatorship, and by extension, in upholding military rule and brutal repression in the country. Companies with ties to Burma face significant financial, reputational and legal risks operating in the country, which has been condemned internationally for its use of slave labour, forced displacement, and repression of ethnic minorities.

The recent violence has put the spotlight on companies operating in Burma’s oil and gas industries. The sale of natural gas is the single largest source of revenue for the military government, accounting for half its exports in 2006.

French company Total - the world’s fourth largest oil company – is the single biggest foreign investor in Burma, acting as the operating partner of the offshore Yadana gas field and pipeline. US oil company Chevron is a 28% owner of Yadana as a result of its 2005 purchase of UNOCAL, and remains in Burma under a grandfathering clause despite the US sanction regime. Construction of the 63-kilometer pipeline last decade was closely associated with serious human rights abuses - including forced labour, forced relocation, beatings, torture, and rape. Today, it is estimated that the Yadana consortium contributes US$250-450 million in royalties annually to the military regime. It is also estimated that the military government allocates over 50% of its total budget to military spending, compared with under one percent to national public health.

Recent shareholder initiatives on Burma have focused on the energy sector. In early October, the international labour movement – through the Global Unions Committee on Workers’ Capital – agreed to push for coordinated shareholder action on Burma. Some investors have responded by divesting their shares in companies that operate in Burma. ATP - the C$80 billion universal Danish labour market fund - announced its divestment from Total and all oil and gas companies dealing directly with the state-owned Myanmar Oil company, including South Korea’s Daewoo, which operates another, smaller offshore gas field. The Dutch trade union movement has recently issued a call to pension fund trustees to review investments in companies with ties to Burma. The Dutch healthcare sector fund PGGM, with C$130 billion under management, announced it was actively engaging companies in its portfolio on Burma, and would divest if necessary.

In the US, a shareholder coalition including trade union funds is engaging Chevron, asking the company to withdraw from countries with systematic violations of human rights. The company’s management has agreed to meet with concerned shareholders later this month to discuss their concerns.

In Scandinavia, Swedish governance group GES Investment Services has announced “enhanced engagement services” due to the increased demand from clients such as the Church of Sweden, Swedish mutual insurance group Folksam, and Norwegian life insurance KLP. The Norwegian Pension Fund Advisory Council on Ethics has determined there are no grounds for excluding companies on the basis of their current presence in Burma. However, the Advisory Council did find that an “imminent danger” of human rights abuses, such as the construction of another pipeline in Burma as envisaged by PetroChina, would be grounds for immediate exclusion of such companies from the fund.

At home, the Canadian Labour Congress (CLC) has written the Canadian Pension Plan Investment Board requesting that it publicly report on its exposure to companies with operations in Burma, actively engage them, and divest unless business ties to the military regime are ended. The CLC also wrote Prime Minister Stephen Harper in October calling for a ban on all new and existing Canadian investment in Burma. The Canadian Government has since announced new sanctions, which include a ban on all exports to and from Burma, and a ban on all new investments. It is expected that the US ban on imports and investments in the countrywill be tightened further, and the European Union has already increased restrictions on Burmese investment, however the EU restrictions glaringly exclude the oil and gas sector.

Canadian companies are not off the hook. BC-based CHC Helicopter operates five helicopters in Burma, providing transportation services for offshore oil and gas exploration and extraction. Until recently Ivanhoe Mines operated the Monywa Copper Mine through a joint venture agreement with a Burmese state-owned company. Ivanhoe has transferred its Monywa assets to an independent Trust, pending the sale of its stake in the mine, and the company has stated that it no longer receives revenues from Monywa. Critics argue however that the details of the Trust’s structure and its financial ties to Ivanhoe are unclear.

Investors should be concerned with the reputational, political and legal risks for companies operating in Burma. With an unstable regulatory framework, endemic corruption and gross violations of human rights, the country is subject to increasingly stringent international sanctions and heightened public and media scrutiny. Trustees, pension activists, and all concerned investors should consider the risk this may pose to the companies in their investment portfolio.

As an example, trustees can ask their investment manager to report on their fund’s exposure to companies with ties to Burma, the risks this may pose to the fund and the manager’s strategy for addressing such risks. To assist in this process, SHARE has created an information site along with an action toolkit.

TU investor activism on Burma

A quick plug for SHARE, the excellent labour-aligned shareholder activist body in Canada. It now has a section here on its website dedicated to the Burma issue, which includes a helpful feed of investor news.

This is an issue that unions globally can get behind as investors. It strikes me that it is also a case where it might be legitimate to push both engagement AND screening. Mainstream funds are still going to be wary of disinvestment, but there is no reason why they shouldn't be quizzing their fund managers on the risks to investee companies of doing business with the regime.

On the other hand, given the clear policy position on this issue, it would seem pretty legitimate for TU-aligned funds to ditch any holdings in target companies, particularly if there is an opportunity to generate some publicity for the issue by doing so.

I'm interested in anyone else's view on the engagement vs screening argument with specific reference to Burma...