Pre-disclosure: the new normal?

If you’ve been around in corporate governance long enough, you will remember the endless rows we used to have with the asset management industry about disclosure of voting records. In these days when analyses of how managers vote on issues ranging from climate change to executive pay are regularly published, it’s easy to forget what a fight they put up to avoid transparency.
There are still a handful of holdouts in the UK who refuse to make their records public, but by and large the bigger managers play ball.
The timeliness of the disclosures managers make is another question. Some disclose their votes on a rolling basis, meaning you can usually find out how they voted a day or two after the relevant meeting. Others upload a year’s load of data in one go, once a year, meaning that if the meeting you’re interested in falls just after publication date you have to wait up to a year to find out how votes were cast.
But things might start to change. Last week the FT reported that Norges Bank is planning to start disclosing all its votes before meetings take place. In fact it’s interesting to note that there are a handful of investors that do this already, and they are all asset owners. In the US both CalPERS and CalSTRS make voting decisions available via their web disclosures a few days ahead of meetings, and here in the UK one of our clients, Northern LGPS, makes its votes available two days ahead of meetings.
Given rising expectations of investor stewardship, we think that this could become standard practice in fairly short order. Once an investor has cast their vote, and the company knows this, there isn’t a really compelling argument for keeping the decision secret. It may help investors who are weighing up how to vote to know how others are approaching the issues under consideration.
In our view the more information in the public domain the better, so we hope that more investors follow the lead of these trail-blazing asset owners.

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