The voting policy applies to all Carmignac group entities. Its effects are permanent and apply to the whole range of funds managed by Carmignac. This voting policy sets out the general principles that Carmignac’s portfolio managers apply when exercising voting rights. The voting policy also describes the company’s internal organisation for identifying and preventing potential conflicts of interest when exercising voting rights.
a) Organisation of Carmignac for exercising voting rights
At the beginning of 2015, Carmignac decided to begin using an external service provider to coordinate the voting process. This service provider is ISS Governance, a leader in its field.
ISS Governance helps Carmignac with voting administration (AGMs, automated ballot management) and, in particular, shares its expertise of analysing the motions that are put to shareholders’ vote.
Carmignac’s teams remain wholly responsible for the voting decisions made on behalf of the portfolios that they manage. Choices are coordinated at a group level in daily management committee meetings, or approved individually by each fund manager, all while taking into account the principles of this policy.
The Middle Office Assets department is responsible for collecting the management teams’ voting decisions and entering their instructions in the system, as well as checking that they are correctly recorded in the ISS Governance system and by the custodian. This team thus provides support for managers, and guides the voting campaign from an operational viewpoint, including:
- Monitoring alerts
- Collecting documents needed to exercise votes (e.g. PoA)
- Transferring analyses supplied by the service provider
- Consolidating and preparing decisions on voting for or against motions
b) Principles of the voting policy
By using an external provider for the voting process, Carmignac intends to call on the expertise of a leading player in analysing motions put forward at shareholders’ meetings.
Being aware of the future economic, social and environmental challenges facing issuers of securities, Carmignac also intends to follow the principles of ISS Governance’s Sustainability Policy.
Additionally, where there is a risk of companies changing their strategy significantly, Carmignac’s management teams exercise voting rights attached to the securities held by the funds that it manages in the interests of holders of shares or units of these funds. These risks can entail:
- Risk of a change in the majority shareholder
- Merger/acquisition risk
- Risk of a change in the management team
- Restructuring risk, among others
It is also important to remember that one of Carmignac’s main aims is to maintain a line of communication with company management teams. Carmignac has therefore decided to attend shareholders’ meetings if consolidated positions in the companies are “significant”.
Carmignac will also vote on issuers for which managers/analysts have identified a strong interest in the investment strategy that they wish to pursue. Carmignac’s managers therefore retain the option of taking part in the voting process of any company, even if the weight of the funds’ shares is not considered to be significant.
c) Details of the policy
Carmignac’s voting policy focuses primarily on the interests of those holding units in the funds under the group’s management, aiming to develop long-term constructive communications with company management teams.
To this end, and with regard to voting in companies that fall within the scope of this policy, the votes cast by Carmignac will be based on the principles of ISS Governance’s Sustainability Policy and/or will encourage company management teams to commit to:
- the establishment of an effective corporate governance system
- the rights and enhanced role of those holding shares and equity
- fair treatment of shareholders
- transparency and disclosure of information
- the responsibility of Board members
- the development of fair remuneration policies in line with the company’s economic prospects (application of the “say on pay” principle)
d) Conflicts of interest and free exercise of voting rights
Carmignac’s Code of Ethics describes situations in which conflicts of interest involving staff and, in particular, portfolio management teams may arise.
e) Exercise of voting rights
In choosing an external service provider like ISS Governance, Carmignac has teamed up with a leading player in the management of electronic voting. Carmignac will always try to exercise voting rights through the electronic platform that ISS Governance has provided for this purpose.
An annual report summarising the exercise of voting rights over the past year is available on our website.