New Voting Guidelines

Each of the National Association of Pension Funds (NAPF) and Institutional Shareholder Services (ISS) has recently published its guidelines for proxy voting for the 2015 season. Previously, NAPF and ISS followed a common approach, which has now ceased. The additional analysis and perspective on proxy voting issues is welcome. NAPF previously maintained a separate policy for voting on smaller quoted companies (last published in 2012) and has recently advised that, into the future it will not be maintaining this separate policy, but rather will apply the same basic principles on shareholder voting as it does for larger companies on a proportionate basis, accepting that some of the detail of application for smaller companies will be different. It is hoped that the treatment of smaller companies in the same way as larger companies will raise standards, encourage deeper engagement between shareholders and managers and, most importantly, increase liquidity in smaller stocks.