The FRR’s guidelines on the exercise of voting rights factor in the dimensions of the FRR and must be broad enough to also take into account particular national circumstances (in France and internationally). The FRR therefore aims to capitalise on investment managers’ knowledge and their ability to understand the practices in force in various financial centres. Investment managers may also rely on these practices for subjects not covered by the FRR’s guidelines.
To assist it with its monitoring, the FRR is working on a system to score the quality of the governance of its portfolio of developed market equities. This new analytical approach improves the FRR’s understanding of the key elements of this portfolio’s governance.Conducted through its asset managers, voting enabled the Fund to participate in 1,605 general meetings in 2021 and to vote on more than 20,000 resolutions in the countries that make up its developed market equity portfolio. Its managers participated in 98% of the general meetings where votes were held.
The FRR Managers voted on the resolutions proposed by the management at the general meetings with 80.93% FOR and 19.07% AGAINST.
In 2021, most votes against management related in particular to resolutions on remuneration (27% of votes compared with 25% in 2020). The election and appointment of directors (12% of votes against, as in 2020), and operations having an impact on the company’s share capital (20% of votes against).
Managers are mindful not only of the amounts but also of the quality of the information disclosed and the transparency. It is also worth noting the large number of resolutions on share capital transactions to enable companies heavily impacted by the COVID-19 pandemic to recapitalise. 20% of votes against this type of operation were counted on these resolutions in 2021.
The FRR pays close attention to consideration of extra-financial – especially ESG – criteria by boards of directors, and of TCFD recommendations, as well as to the diversity of boardrooms and executive committees at the companies in which it holds shares.
The trend in tabling “Say on climate” resolutions that started in 2020 is growing significantly with 11 resolutions presented in 2021.