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Transparency is a key element of Robeco’s corporate governance policy. We present our voting decisions shortly after the annual general meeting took place.
The Robeco proxy voting policy relies on the internationally accepted set of principles of the International Corporate Governance Network (ICGN). The ICGN Principles reflect both the Principles of Corporate Governance of the Organization for Economic Co-Operation and Development (OECD) and principles developed by the ICGN itself. Following here are the summarized ICGN principles.
Principle 2: Improve the functioning of Corporate boards
Corporate boards have the task to monitor and guide the management of the company in the best interest of shareholders. In order to fulfill that task, the majority of the board should be independent, have sufficient knowledge of the industry and relevant supervisory skills. Independent board members should have sufficient access to and information about the daily practices within the company.
Principle 3: Improve Corporate culture
Companies should engender a corporate culture which ensures that employees understand their responsibility for appropriate behavior. A company should have a code of ethics and conduct in place. The company should select and train their employees accordingly.
Principle 4: Improve risk management
Companies should have an adequate risk management policy and appropriate risk management systems in place. The board should report which main risks are identified and what policies or other measures have been implemented to minimize these risks.
Principle 5: Improve executive remuneration policy
The executive remuneration policy is one of the instruments to guide, evaluate and reward the behavior and achievements of executives. It is in the interest of a company, its shareholders and other stakeholders to have an appropriate remuneration policy for executives. Companies should be transparent about this remuneration policy, including the height of compensation, its structure and key performance targets. Remuneration policies should be structured in such a way that the interest of executives and shareholders are aligned towards the same end; value creation on the long term. The inclusion of non-financial targets is encouraged. Shareholders should have a say on pay by approving changes in the remuneration policy or via an annual vote on the remuneration report.
Principle 6: Improve audit function
Companies should have robust and efficient audit processes in place. Companies should be transparent how the financial statements have been constructed and if material weaknesses have been detected. In order to ensure auditor independence, companies should be clear on their auditor rotation or tendering procedures. In case of substantial payment of non-audit fees to the auditor, the company should provide sufficient information to ensure shareholders that the auditor can be regarded as independent.
Principle 7: Improve disclosure and transparency
Companies should be transparent and open about its aims its challenges, its achievements and its failures. This includes transparency on the companies sustainability strategy via their sustainability report or integrated report. Companies should timely publish their annual and sustainability report and announce their shareholder meetings.
Principle 8: Improve shareholder rights
Shareholders should have appropriate rights to ensure that boards are accountable for their actions. All shareholders should be treated equally in terms of voting rights, dividend distribution and the allocation of other rights. Shareholders should have a say in major decisions, significant transactions, mergers, and changes in company bylaws. Appropriate means should be available to shareholders to address issues with the company. When the company changes its capital structure shareholder value and shareholder rights should not be negatively effected or diluted.