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Hampshire Pension Fund, which has £71.6m in assets under management, has raised concern over the “inconsistent” voting behaviour between its investment managers.
The minutes of a Hampshire Pension Fund Panel Board meeting last week highlighted 82 examples where the fund’s investment managers voted differently on the same stewardship issue in 2023.
Members at the meeting agreed that the “level of inconstancy in voting between investment managers was not a particularly satisfactory position”.
At the meeting, members discussed that an alternative approach to stewardship would be to consider the use of a third-party proxy voting service, such as the Pension and Investments Research Consultants (PIRC).
Hampshire Pension Fund is a part of the Local Government Pension Scheme (LGPS) investment pool ACCESS, which has recently appointed PIRC to advise on its responsible investment approach.
The minutes stated that the Hampshire Pension Fund will “closely monitor” the voting behaviour of its managers and engage with them over this issue. This comes as the 2024 Annual General Meeting (AGM) and reporting season kicked off in February.
A separate report revealed a summary scorecard of Hampshire’s investment managers voting in 2023. However, the report did “not attempt to quantify the number of votes cast by the managers, which is significant”, and instead focused on examples.
The scorecard revealed that the majority of votes cast against a company’s management was due to the following reasons: nominations for directors who were not “sufficiently” independent; remuneration policies where the level of pay was felt to be excessive or short term incentives were seen as more valuable than long term incentives; and the appointment of auditors, where the incumbent audit firm had been in place too long or the disclosure of non-audit fees to the company was not clear.
At the same meeting, the fund also stated that it would reapply for membership in the Financial Reporting Council’s UK Stewardship Code.
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