In the aftermath of the financial crisis the role of credit rating agencies and proxy voting research has come under increased scrutiny. Manifest very much welcomes the increased focus on high quality proxy research as this has been a central tenet of our business philosophy since our formation in 1995.
Manifest’s research is produced according to in-house procedures consistent with the CFA Institute’s Research Objectivity Standards. This means that per principle 6, Manifest’s analysts will verify facts, policies or disclosures which are unclear from corporate documentation, however they are prohibited from:
a) Sharing with, or communicating to, a subject company, prior to publication, any section of a research report that might communicate the research analyst’s proposed recommendation or rating; and
b) Directly or indirectly promising a subject company or other corporate issuer a favorable report; or
c) Threatening to change reports, recommendations, or price targets.
Equally they will not change their research on the basis of threatening or abusive communications. In the event of a dispute, issuers may refer to our Research Manager or failing that, the CEO.
Manifest has put in place quality control systems and procedures which are consistent with ISO 9001:2008 for the delivery of services. The standard provides a tried and tested framework for taking a systematic approach to managing an organisation’s processes so that products and services consistently meet customers’ expectations. Manifest was externally assessed and approved as an ISO9001 registered firm in March 1998. Verification is now undertaken internally, as provided for by the standard.
The provision of corporate governance research and vote agency services is not a regulated activity. Manifest does not, in the FSA’s view, provide investment advice, as such FSA authorisation is not required.
In addition to our operational quality assurance procedures, Manifest conforms to the CFA Institute’s Research Objectivity Standards which include specific, measurable standards for managing objectivity and independence in research reports and disclosing conflicts of interest.
Manifest’s Research Policy
Our philosophy has always been that governance is an integral aspect of the portfolio management process. As with many aspects of the portfolio management process,e fund managers need access to timely research and governance support tools. While fund managers and pension funds may outsource their administrative, research and operational tasks to Manifest, they do not outsource their thinking or final decision making.
Manifest therefore does not have a proprietary “one size fits all” voting policy, nor do we generate generic recommendations. Our research is instead based on a combination of local codes of best practice, listing rules, company law and investor-driven policy issues across the board.
Voting guidance is provided by reference to a sophisticated computer model of governance metrics combined with independent analyst input for subjective issues. Each customer’s voting template is unique to them and will have been signed off by senior investment staff prior to implementation.
Any questions relating to general policy may be directed to Manifest CEO, Sarah Wilson, or our Head of Research, Alan Brett.
Issuer Access to our Research
Any issuer covered by Manifest’s research process is entitled to receive a copy of our report on them free of charge. Access is made available through our research and voting platform www.manifest.info. Requests for a user ID and password can be sent to issuers@manifest.co.uk.
Analyst Training & Knowledge
Manifest’s analyst undergo rigorous training in both our operating procedures and governance issues. Every statement made in a research report can be fully justified either by reference to a particular code or documentation provided by an Issuer.
Information used in the Research Process
All our research is based on the documents that would have been sent to shareholders. We do not make use of inside information, selective or one-to-one briefings. To do otherwise would violate the priniciple of equal access to all shareholders.
Manifest’s analysts will, wherever practical, liaise with either the Company Secretary or Investor Relations Officer of any issuer to obtain clarification on any points we perceive to be unclear. Both Customers and Issuers are encouraged to liaise directly with the analyst responsible for any report that has been published. All dialogue is monitored and material issues will be raised to a senior level through our Quality Management System.
During proxy season (March 1st to May 31st), there is only limited time available to obtain feedback between publication of agendas and voting deadlines. We therefore cannot hold back publication of reports if an Issuer is not able to respond in a timely way.
Where a shareholder proposal has been submitted we will also engage with the proponents directly to ensure that we have a detailed understanding to the background.
Pre-publication Report Disclosure
Manifest does not make its reports available to issuers prior to publication. We will however always ensure that any matters requiring clarification will be made known in advance and issuers will be given an opportunity to clarify or represent their views.
Right to Reply
Manifest takes the quality of its reports, and the data they are based on, extremely seriously. Any factual errors will be amended within 24 working hours of notification by email. Where the issue is minor and unlikely to have a bearing on a customer’s vote intention we will not notify customers of the change. If the issue is significant (e.g. dilution limits, share plan conditions, performance targets etc) then an Update will be posted and notified.
Can Issuers Influence Voting Outcomes?
Manifest’s role is to act as a screening mechanism for the issues that are likely to be problematic for shareholders in the context of their governance and investment policy. Customers’ final voting decisions, while influenced by our research, are independent of the Manifest. Issuers are strongly advised to liaise with their owners i.e. shareholders, directly.
Manifest will not engage with any Issuer or their advisor(s) as to how any customer will or may vote.
