Voting proxies

In accordance with its founding texts, the FRR’s voting rights are exercised by the asset managers it has selected and they do so in the best interests of the Fund.

Voting at shareholders meetings is one of the FRR’s founding principles as a socially responsible investor. Conducted through its asset managers, this allowed it to vote on 37,258 motions in 2017, spread over the 32 countries that make up its developed market equity portfolio.

The FRR is exposed to emerging market equities through units that it holds in collective investment schemes. Unlike portfolio management mandates, these UCITS have their own voting policy, which does not necessarily tally with the FRR’s guidelines.

The statistics presented below illustrate the positioning of the developed market equity portfolio in 2017.

All countries combined, the FRR attended 99% of shareholders meetings.

With 86.6% of votes in favour of (FOR) the motions submitted at shareholders meetings, this portfolio is acting in much the same way as the one analysed in 2016.

Most of the votes against related to motions on pay, the election and appointment of directors, and operations changing the company's capital. Areas of contention are often the same from one year to the next, and it is not so much the motion itself that is contested as the lack of transparency over its implementation.

Regarding pay, for example, while the amount may be debatable, it is first and foremost the management’s lack of transparency and communications that will be sanctioned. Indeed, the lack of information and transparency means that shareholders are unable to consider whether this (fixed or variable) pay is reasonable, proportionate and sustainable. It is therefore a protest vote. The companies want to keep a considerable degree of discretion in the way this pay is awarded, which may be understandable but can also fuel certain misunderstanding and ultimately lead to votes against. Through its investment managers, the FRR encourages the virtuous circle of transparency and communications.

Similarly, regarding capital changes, disputes often arise when the management plans to go beyond the reasonable, rational limits of such an operation. For example, regularly failing to consult shareholders on operations.

The FRR is highly alert to external motions on ESG criteria. It ensures that its investment managers are committed to their consideration, especially supporting requests to gain a better understanding of how the company’s business is responding to change as well as to environmental, social and climate issues

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