Voting in Relation to Shareholder Issues
Policy on Voting in Relation to Shareholder Issues
The Australian Prudential Regulation Authority (APRA) Prudential Standard SPS 530 – Investment Governance establishes requirements for an RSE licensee to implement a sound investment governance framework and to manage investments in a manner consistent with the interests of beneficiaries. In addition, ASFA’s Best Practice Paper 17, Guideline B6 states that superannuation fund trustees should vote on all company resolutions where they hold shares, wherever practicable to do so.
Poor governance practices may result in diminished investment value in the long run. Voting rights are a means by which shareholders may influence a range of risks that can arise where the interests of the companies’ management diverge from that of shareholders.
The purpose of this policy is to ensure that CBH Superannuation Holdings Pty Ltd as trustee for CBH Superannuation Fund fulfils its fiduciary duty to represent the interests of beneficiaries in corporate governance matters through the proxy voting process.
The Board is the Board of Directors of CBH Superannuation Holdings Pty Ltd
The Fund is CBH Superannuation Fund
The Trustee is CBH Superannuation Holdings Pty Ltd
CEO is the Chief Executive Officer
CIO is the Chief Investment Officer
This policy deals with proxy voting for direct Australian Equity investments of the Fund. Where securities are held via pooled funds, the managers of these pooled funds have the capacity and responsibility to exercise voting rights and not the Trustee.
While CBH Superannuation Fund’s direct holding in each Australian company may be small compared to the number of shares on issue, it is important the Fund cast its votes in the best interests of members. The Board acknowledges there may be issues that are considered ‘contentious’ which members may expect the Fund to take a voting position. For example, a contentious issue may be a vote required on a company where CBH Group has a direct or indirect relationship (e.g. partner or competitor).
In order to avoid potential conflicts, the Trustee follows industry recognised proxy voting guidelines. The Guidelines will provide details for the Fund on monitoring listed Australian companies and provide a basis for recommendations on how to vote.
PROXY VOTING GUIDELINES
The Trustee has adopted the ACSI principles. The ACSI Guidelines were developed to provide a statement by Australian superannuation investors on their expectations of governance practices relating to the companies in which they invest. The Guidelines provide details for superannuation funds on monitoring listed Australian companies and provide a basis for recommendations on how to vote. The Guidelines were originally built on the governance standards included in the Corporations Act and ASX Corporate Governance Council Principles and Recommendations. Importantly to the Board, the Guidelines provide greater detail on a range of governance issues from a superannuation fund perspective.
The Guidelines are also consistent with the Board’s beliefs and are premised on the following three core principles:
- Good governance requires boards to consider and manage all material risks facing the company, including ESG risks;
- Effective board governance contributes to shareholder value creation and risk-reduction, creating the conditions in which sustainable long-term investment can prosper; and
- Superannuation funds can, and should, protect and manage their investments for the long-term through the consideration of ESG risks in their investment decision-making processes.
The ACSI guidelines are also adopted by many large Australian superannuation funds (including Australian Super, Care Super, HESTA, HostPlus, REST and UniSuper).
A copy of the ACSI guidelines can be found at:
PROCESS AND IMPLEMENTATION
CBH Superannuation Fund does not have the internal resources to conduct research and analyse all shareholder resolutions (according to adopted guidelines) for its holdings. The Trustee has appointed a proxy adviser (Ownership Matters) to provide recommendations based on the ACSI guidelines for Australian shares held in the portfolio.
While Ownership Matters provides recommendations, the decision on how to vote and lodging of votes ultimately remains the responsibility of the Trustee. The Trustee delegates this responsibility to the CEO and /or CIO. To avoid votes not being lodged, both the CEO and CIO are included on the distribution list for proxy materials.
The preferred method is to lodge votes electronically. The Trustee is registered on the Computershare Investor Services website and the Link Market Services website which covers approximately 90% of companies requiring proxy lodgement. Proxy votes may also be completed and lodged manually (if required).
The CIO will maintain information on each proxy vote lodged that includes the following information and will report to the Board only when a Company resolution is not supported:
- the name of the entity;
- the ASX ticker or equivalent code;
- the meeting date;
- a copy of the Ownership Matters report; and
- how the proxy was voted.
PUBLICATION OF VOTING HISTORY
Under Regulation 2.38 of the Superannuation Industry (Supervision) Regulations 1994, the Trustee must make a summary of when, during the previous financial year, and how the entity has exercised its voting rights in relation to shares in listed companies.
The Trustee will publish this information on its website www.cbhsuper.com.au and update the information after the end of each quarter.
Voting Decisions in the Past Financial Year
For details of how the Trustee excercised its voting rights in the period 1 June to 30 September 2017, click here.
For details of how the Trustee exercised its voting rights in the period 1 April 2017 to 30 June 2017, click here.
The Trustee did not exercise any voting rights in the period 1 January 2017 to 31 March 2017.
For details of how the Trustee exercised its voting rights in the period 1 October 2016 to 31 December 2016, click here.