Whether by proxy or by attending the meeting, voting is an opportunity for shareholders to have their voice heard by the companies they invest in. In this article you read how Triodos goes about it and what results we have achieved.

The right to vote

Annual general meetings (AGMs) are public events at which company executives, directors and shareholders come together. They usually take place in a select few months of the year (“the AGM Season”). Shareholders have the right to vote on agenda items, for example they can vote to elect new or returning Board members, and to approve financial results from the previous year as well as future operational strategies. When shareholders do not physically attend the meeting, they can vote by proxy using an electronic system that registers voting preferences. This facility has lead to increased numbers of shareholders making their voice heard by voting at AGMs.

Downside to proxy voting

The downside of proxy voting, however, is that physical attendance rates have decreased and the contact between companies and shareholders, particularly large shareholders, is shifting to dialogue behind closed doors. An AGM used to be a forum where important corporate developments were shared and discussed. It was often the only opportunity for shareholders to raise questions directly to an Executive Board enabling them to make fully informed voting decisions. With the increase of proxy voting, discussions at AGMs now seem to have little relevance and do not have significant impact on voting outcomes.

Proactive approach

We take a proactive approach and well before the start of each years’ AGM season, we write to the companies we invest in to inform them that we hold shares. At the same time, we bring attention to a specific topic (this year it was board diversity and gender equality), and provide our proxy voting guidelines so that they are aware of how we will vote on specific issues. 

We invest in companies all over the world. For practical reasons, we therefore attend only a limited number of AGMs every year. For most we make use of our proxy voting right. As soon as the agenda for an AGM has been published, we cast our votes and inform each company of our voting decisions. Since proxy voting deadlines are a few days ahead of the actual meeting, it often triggers dialogue with companies, and sometimes results in Triodos changing its voting preference, or companies changing their agenda items. We consider this a very positive outcome of our approach.

Results for 2015

We selected to attend the AGMs of RELX (formerly Reed Elsevier) and Royal Wessanen because we had concerns and questions for both companies. The two meetings couldn’t have been more different. RELX only briefly explained its corporate strategy and results, with minor questions asked by just four shareholders. We asked the company about its complex and potentially excessive remuneration policy. Royal Wessanen’s meeting on the other hand heard elaborate and extensive discussion. We complimented the company with its commitment to a new strategy to become a leader in healthy and sustainable food and we sought confirmation that the company will hold on to this strategy for the long term. For the remaining companies we invest in, we voted by proxy and by the end of September this year we had voted at 115 meetings. Our voting ballots can be found on the Triodos website.

Note: The issues explored in this article are relevant for sustainable investments on the stock market. Triodos Bank believes that our socially responsible investments are a powerful means of promoting our values and working for greater sustainability, while enabling us to offer a complete range of attractive investment options to customers who choose to invest on the stock market.