Liontrust engagement and voting report 2021 - Flipbook - Page 20
Liontrust’s voting policy
Liontrust operates a global voting policy, which guides our voting
decisions across funds. Liontrust’s business model, whereby each
investment team has autonomy over its distinct investment process,
applies to how voting policies are adopted.
The Economic Advantage and Multi-Asset teams follow proxy
adviser ISS’ rerecommended guidelines, whilst the Sustainable
Investment, Global Equity and Cashflow Solutions teams use a
custom policy curated by Liontrust’s Governance & Stewardship
team. This also applies to segregated clients who have delegation
of voting responsibility to Liontrust stipulated within each Investment
Management Agreement. The implementation of ISS and custom
policy differs, depending on an investee company’s market
capitalisation and geography. A significant number of Liontrust
equity holdings are UK domiciled, and therefore this report will
focus primarily on this geography. However, references will be
made when global policies differ. Exceptions also apply for Small
Global Capitalised Companies, including the FTSE Small Cap and
below/FTSE AIM.
Proxy voting in practice
Monitoring our voting rights
Liontrust exercises its voting rights by aiming to actively vote all
its equity holdings whenever possible. We consider this to be a
key element of fulfilling our fiduciary duty to our clients whilst also
recognising our responsibility to enforce good corporate governance
at our investee companies. Vote monitoring is highly important and
Liontrust’s Governance and Stewardship team closely monitors all
meetings to ascertain if there are contentious recommendations to
vote against proposals. In most other cases, the team sends custom
and ISS research to the fund manager responsible for the holding
prior to the meeting’s cut-off date. Our fund managers, assisted by
the Governance and Stewardship team, retain the right to change
vote instructions on a case by case basis, sometimes because of
engagement with a company and subsequent holistic analysis of
the vote instruction.
Appropriate alerts are applied to ensure that all investment teams
are consulted on proposals referring to:
• Mergers & Acquisitions/Disposals
• Related Party Transactions
• Mandatory Takeover Bid Waivers
20 - Liontrust: Engagement and Voting Report 2021
• Reincorporation Proposals
• Shareholder Proposals
• Other non-routine items/controversial items
Each investment team has discretion to vote against its adopted
policy. Should it choose to do so, it is required to provide a rationale
as to why it has chosen to “go against policy”. This registrar is
maintained centrally by the Governance and Stewardship team.
Significant Votes
Liontrust defines a ‘significant vote’ by:
• The size of holding: where Liontrust funds hold more than 5% of
a company’s market capitalisation;
• And/or where Liontrust funds:
– Vote against a company’s remunerations policy;
– Vote on a Merger or Acquisition;
– Vote on a contentious issue identified by the Governance and
Stewardship team; and
– Vote against management on a shareholder proposal.