Policy Library

Proxy Voting Guideline

Purpose

This Guideline provides guidance on proxy voting for companies held in the Equity portfolios of the University’s Long-Term Investment Pool (LTIP).

Overview

The Guideline is designed to support the aims and objectives of the University’s Socially Responsible Investment (SRI) Policy, specifically focusing on proxy voting practices for equity investments in the Long-Term Investment Pool (LTIP).

The University’s voting rights are exercised by its asset managers, who cast votes on its behalf. The duties of the University’s asset managers regarding proxy voting are contractual in nature, specified in each manager’s Investment Management Agreement (IMA).

Definitions

Equity: Investment in shares of publicly traded companies, which represent units of ownership in the company.

Vote: Shareholders of a publicly traded company have the right to vote on the proposals at company meetings, with voting power commensurate to the size of their shareholding.

Proxy Voting: The process whereby votes are cast by a delegated entity on behalf of a shareholder.

Asset Manager: An entity, external to the University, that is delegated to manage certain University investment assets.

Supervoter Right: A feature of the Institutional Shareholder Services (ISS) ProxyExchange platform which gives asset owners the ability to override proxy votes cast by an asset manager.

Investee Company: A company that the University holds a financial interest in through its investment portfolio.

Nominating Committee: A corporate board committee whose function is to identify and recommend suitable candidates for the board of directors.

Long-Term Investment Pool (LTIP): The financial structure for the investment of funds with an investment horizon of greater than three years on behalf of the University.

Industry Benchmark: An index that captures the composition of an industry or asset class.

Investment Management Agreement (IMA): The contractual agreement between the University and its asset manager.

Plurality Vote Standard: For companies that follow a plurality voting standard, the voting options for director elections are For, Withhold or Do Not Vote.

Adjusted Gender Pay Gap: The pay gap after adjusting for legitimate factors that influence compensation, for example, job level, performance, job-related skills, experience, etc.

Guideline

This section details the University’s proxy voting approach with respect to key topics related to the SRI Policy’s aims and implementation. Proposals that are not covered in this Guideline are voted in accordance with the asset manager’s voting policy, with the aim of protecting the value of the University’s investments.

Gender Equality

1. The University recognises that corporate gender equality is a social benefit that is positively correlated with financial performance.
2. The University implements a gender positive screen for the LTIP that seeks to reduce investment in companies where women are underrepresented in leadership positions.
3. Proxy voting plays a critical role in achieving the positive screen as institutional investors can advocate for gender diversity in a company’s senior leadership through director elections.
4. Institutional investors can also encourage the adoption of gender best-practices, including transparency on gender-pay statistics and workforce representation, at all levels of the organisation.
5. To this end, the University will vote:

• Against (or Withhold for companies that use a plurality vote standard) directors that are incumbent members of the nominating committee when the board is not comprised of at least 30% of the underrepresented gender, without a commitment to increase diversity to at least 30% by the next annual meeting; and
• For proposals to report the company’s adjusted gender-pay gap and disclose the company’s workforce representation, by gender.

Modern Slavery

6. The University recognises that modern slavery offends the most fundamental of human rights and is never acceptable, in any form. Failures to identify and rectify instances of modern slavery can lead to:
   1. significant legal and reputational risks; and/or
   2. negative financial performance.
7. LTIP asset managers are contractually required (through the IMA) to comply with the applicable modern slavery laws and maintain their own modern slavery statement, policies and procedures.
8. The University implements a positive investment screen that promotes LTIP investment in companies publicly committed to minimising modern slavery.
9. To strengthen its commitment, the University will vote:

• For proposals for companies to assess and report on the modern slavery risks in their operations and supply chain; and
• For proposals for companies to adopt a policy (or equivalent) to minimise modern slavery in their operations and supply chain.

Environmental

10. Companies that lead in the management of environmental risks and opportunities are consistently shown to financially outperform their competitors. Laggards in this area face physical and transition risks that have a negative impact on future cash flows and valuations.
11. The University aims for a significant reduction in the carbon intensity of the LTIP relative to industry benchmarks: 30% less for Domestic Equity and 75% less for Overseas Equity portfolios. The LTIP is assessed annually on:

1. climate change risk,
2. climate scenario alignment,
3. biodiversity impact; and
4. energy transformation progress.

12. Proxy voting allows the University to advocate for companies to adopt practices that support these aims. This includes encouraging investee companies to make environmental disclosures and establish robust climate targets.
13. The University will vote:

• For companies to disclose in line with the International Sustainability Standards Board (ISSB) IFRS S1 and IFRS S2 standards, or Taskforce on Climate-related Financial Disclosures (TCFD) recommendations.
• For companies to disclose in line with the Taskforce on Nature-related Financial Disclosures (TNFD) recommendations.
• For companies to establish externally validated greenhouse gas emissions reduction targets in line with the Paris Agreement goals.

14. To ensure that proxies are voted in accordance with this Guideline, the University monitors votes cast by its asset managers through the ISS ProxyExchange platform. As a control, the University hold a Supervoter right to override any vote cast for companies held in the LTIP.