The Proxy Voting Guidelines outline guidelines and procedures for implementing IMCO’s approach to proxy voting for public equity holdings.
Purpose and General Guidance
IMCO believes that good corporate governance enhances long-term shareholder value. Proxy voting is one component of the corporate governance process, enabling shareholders to express their views on a variety of issues.
Consistent with our focus on fiduciary duty and long-term value creation, IMCO considers environmental, social and governance (ESG) factors in our investment decision making processes, and actively promotes the adoption of sound governance practices at companies in which we invest. Proxy voting guidelines give the directors and officers of companies in which we own shares guidance on how IMCO is likely to vote on matters put to shareholders.
The Proxy Voting Guidelines are generally intended to apply to publicly listed companies. Privately held companies differ from public companies in terms of protective measures available to shareholders and other governance features.
Proxy Voting Guidelines
We engage an external proxy voting service provider, Institutional Shareholder Services (ISS), to provide research and vote proxies based on the ISS Sustainability Proxy Voting Guidelines. We also actively monitor our public equity holdings and, from time-to-time, we may vote differently than the recommendations provided by ISS.
The ISS Sustainability Proxy Voting Guidelines are updated annually and are publicly available on the ISS website (https://www.issgovernance.com/policy-gateway/voting-policies/). These guidelines were developed to be consistent with fiduciary duty and long-term corporate sustainability. The guidelines seek to support recognized global governing bodies promoting sustainable business practices including environmental stewardship, fair labor practices, and the protection of human rights. The guidelines generally take as their frame of reference internationally recognized sustainability-related initiatives such as the United Nations-backed Principles for Responsible Investment.
ISS has both International and United States Sustainability Proxy Voting Guidelines. In the United States, there are a high number of shareholder proposals, especially on environmental and social factors. The guidelines for social and environmental factors in the ISS United States Sustainability Proxy Voting Guidelines cover a wide range of topics. The ISS United States Sustainability Proxy Voting Guidelines dated January 28, 2019 are included in Exhibit A for reference. IMCO will always use the most current ISS Sustainability Proxy Voting Guidelines.
IMCO has adopted the ISS Sustainability Proxy Voting Guidelines, not rigid rules. When needed, we will vote on specific matters on a case-by-case basis.
Internal Review and Escalation
IMCO’s Director, Responsible Investing leads and coordinates the proxy voting process. Notable proxy votes will be reviewed with relevant members of the Investment team (e.g. Public Markets, Relationship Investments) and potentially discussed with our external managers. Contentious proxy votes will be escalated to the Senior Managing Director, Credit and Public Equities. If needed and where practical regarding timing of the proxy vote, contentious votes may be escalated to the Investment Committee for discussion and to arrive at our voting decision.
Voting Our Shares
We take our responsibility to exercise our votes seriously and will use best efforts to exercise this right in all cases. However, in some circumstances it may be impractical for us to vote. For example, in international markets where share blocking applies, we may not vote due to liquidity constraints.
Securities on loan may need to be recalled for proxy voting purposes, in which case loaned securities will be recalled on a best efforts basis. IMCO does not generally recall securities on loan for proxy voting. There is a cost to restraints placed on securities lending, which should be weighed against the benefits of exercising proxy voting rights.
Proxy Voting Record Disclosure
IMCO currently does not disclose our proxy voting record publicly on our website. We will review when and how to begin publicly disclosing our proxy voting record.
These Proxy Voting Guidelines were approved by the Chief Investment Officer and Chief Risk Officer and are effective April 1, 2019.