Liontrust engagement and voting report 2021 - Flipbook - Page 29
CASE STUDY
IntegraFin Holdings Plc
At IntegraFin Holdings’ Annual Meeting in March 2021, in line
with our gender diversity policy for FTSE 250 companies, Liontrust’s
Economic Advantage team voted against the election of the Chair of
the Nomination Committee. The company’s board was composed of
less than the 33% women recommended by the Hampton-Alexander
Review. Liontrust had a significant holding of the company’s shares,
which contributed to the noteworthy 38.15% of shares cast against
the election of the director in question. IntegraFin responded by, ahead
of its February 2022 AGM, proposing the election of an additional
female board member, whose election was successful. This outcome
demonstrates the influence of voting in driving positive change with
regards to diversity, equity and inclusion at executive level.
CASE STUDY
Hilton Food Group
At Hilton Food Group’s 2021 AGM, the Economic Advantage team
chose to abstain from voting on the re-election of the company’s
non-executive Chair. There were two key elements driving the
decision: the long-tenured director’s holding in the company and
the board being composed of less than 33% women. As described
above, the Economic Advantage team’s investment process values
management or board level equity ownership. Whilst this process
is strictly only applied to small and micro-cap companies, and
Hilton Group had ‘graduated’ to FTSE 250 status, the team still
viewed this ownership as important. However, while recognising
this, the team wanted to send a signal regarding the level of
gender diversity on the board, which stood at 29% and therefore
below the 33% target. It was noted that the company had made
recent progress by appointing two female board directors, and
Liontrust recognises the importance of incorporating engagement
into our voting decision-making and following up after AGMs. The
reasons for the voting decision were fed back to the company in a
subsequent engagement meeting for them to understand our views
and respond accordingly.
CASE STUDY
Shell
At Shell’s 2021 AGM, two ‘environmental’ proposals were filed,
one by management (Item 20, Approve the Shell Energy Transition
Strategy) and another by shareholders (Item 21, Request Shell to
Set and Publish Targets for Greenhouse Gas (GHG) Emissions).
Liontrust’s Economic Advantage and Global Equity teams voted in
favour of the management-filed energy transition strategy (item 20)
but voted against the shareholder-filed proposal requesting Shell to
set and publish targets for GHG emissions (item 21). This broadly
mirrored wider shareholder sentiment, with 88.74% of shareholders
voting in favour of item 20 and 69.53% of shareholders voting
against item 21.
These voting instructions by Liontrust demonstrate the holistic,
case-by-case basis upon which we consider voting. In supporting
Shell’s Energy Transition Strategy, Liontrust’s investment teams
acknowledged its position as the first energy company to provide
shareholders with a ‘say-on-climate’ vote and recognition of
accountability for its Scope 3 emissions. Despite an absence of
absolute GHG targets in the strategy, which was converse to
Total’s and bp’s strategies, Liontrust wanted to engage with Shell to
understand in more detail its decisions in this area and would prefer
to use voting as an escalation tool should we believe the company
is not taking the matter seriously or going as far as it should.
CASE STUDY
Trainline Plc.
Liontrust’s Sustainable Investment team voted against the election
of Trainline’s Chair at its 2021 AGM. Trainline is a constituent of
the FTSE 250 and, given its stringent policy on ethnic diversity, the
team voted against the Chair of the Nomination Committee due to
a lack of any board directors from an ethnic minority background.
Furthermore, the company fell short of the targeted 33% female
directors. This was against the recommendation of our proxy voting
research provider ISS but in line with the Liontrust custom policy.
Liontrust: Engagement and Voting Report 2021 - 29