corporate governance codes

Manifest has released its 2018 voting policy guidelines to clients and announced changes to its research reports to reflect the latest global governance and sustainability developments. AGM reports will now provide more detail on board diversity and pay ratios while Say on Sustainability reports will reflect the recommendations of the Financial Stability Board’s Task Force on Climate-Related Disclosures and will identify which companies are referencing the United Nation’s Sustainable Development Goals.

As proxy voting analysts, Manifest does not provide “House Recommendations” but offers bespoke guidance based on global and local best practices and works with them to develop tailored guidelines targeting specific policy questions.

Manifest voting policy guidelines 2018
Manifest’s reports include extended diversity analysis

In respect of AGM resolutions, Manifest has extended a number of guidelines which will now be global in scope as well as introducing new data points to support recent local market changes. In the UK market, a new guideline has been introduced for resolutions to approve Restricted Share Plans (RSPs).  In addition to guidelines for virtual meetings which were introduced in 2012, hybrid meeting resolutions are now also captured.

In respect of European guidelines, many markets now have gender diversity targets and EU Directive 2014/95 calls for companies to disclose their policy in their company’s corporate governance statement, and if no diversity policy is adopted the statement should include a clear explanation as to why this is the case.

In response to this Manifest will flag all nomination committee chairman re-elections at companies that have yet to reach their local market gender diversity quota: Austria (30%), Belgium (33%), France (40%), Germany (30%), Italy (33%), Netherlands (30%), Norway (40%), Portugal (30%), and Spain (40%). In countries with no local market quota, Manifest said it will apply a 30% female representation threshold consistent with the 30% club investor group beliefs. Manifest will also flag all nomination committee chairs at companies which have not disclosed a board diversity policy.

Another significant change is the implementation of the EU audit directive. In June 2014, the European Union published its revised directive on statutory audits of annual accounts and consolidated accounts. Member states had two years to adopt and publish the provisions necessary to comply with the directive becoming applicable on 17 June 2016. The reforms impose mandatory audit firm rotation and restrictions on non-audit services.

Manifest’s new voting guidelines will be applied to companies with 31st December 2017 year ends onward which will be reporting from March in advance of their 2018 AGMs.

Last Updated: 12 January 2018
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