Henderson (Corporate Activity)
SRI / Ethical Overview
Responsible ownership/investor stewardship – Henderson implements a comprehensive Responsible Investment Policy through active management, integration of ESG factors into investment decision making, voting and company engagement. This is applied across Henderson’s entire range of assets (£81.5bn). Link here: https://www.henderson.com/henderson/content/responsible-investment
Engagement - We take an active approach to communicating our views to companies and seeking improvements where we believe there are shortcomings in performance, or a company has failed to apply appropriate standards, or to provide adequate disclosure. We will continue our dialogue with the company over an extended period if necessary.
Voting - We believe that voting at general meetings is an important aspect of corporate stewardship and a means of signalling shareholder views on board policy, practices and performance. We exercise voting rights on behalf of clients at all UK and global meetings. Where voting impediments are in place, such as share blocking, we vote on a case-by-case basis.
Henderson's engage on all equity and fixed interest assets in all geographic regions.
SRI Policies (Primary strategy in bold)
- - No primary policy area
- ESG/SRI engagement Find funds and fund management companies that actively encourages higher 'environmental, social and governance' and/or 'sustainable and responsible investment' practices amongst investee companies - when positive change is aligned with the best interest of investors. This may apply to a single fund or a group of funds. Read fund literature for further information.
- Responsible Ownership policy for non SRI funds Find funds run by fund managers that apply Responsible Ownership or 'Stewardship' policies to all or most of their investment assets. This means that active involvement (e.g. voting, dialogue) with the companies they invest in across funds (not normally limited to ethical or SRI options.) Read fund literature for further information.
- Integrates ESG factors into all/most fund research Find fund management companies that research environmental, social and governance (ESG) issues when deciding whether or not to invest in a company. This typically applies to all funds, not only those which are promoted as being 'ethical' or 'SRI themed'. This is increasingly often used as a risk management tool.
- Vote all* shares at AGMs/EGMs This fund manager votes or aims to vote all* the shares they own at Annual General Meetings and Extraordinary General Meetings. A commitment to voting shares is a key indicator of 'responsible share ownership' - where fund managers consider - and express their views on - the key business issues effecting the companies they part own. (*Allowance is made for exceptional situations such as when shares are in the process of being sold.)
- In house responsible ownership/voting expertise Find fund / fund management companies where there is in-house expertise that enables the fund manager to make their own decisions on issues such as shareholder voting, setting of in-house guidelines - for example - particularly with regard to environmental, social and governance (ESG) issues.
- Responsible Ownership/ESG a key differentiator The fund managers have said they consider this area to be a key differentiator for their business
- UK Stewardship Code signatory Find fund managers that are signatories to the FRC UK Stewardship Code, which sets out a framework for constructive investor / investee relations where fund managers are encouraged to behave as responsible 'company owners'.
- Publish Responsible Ownership/Stewardship report Find fund management companies that publish information on their approach to responsible investment ownership - also known as 'Stewardship' - following the introduction of 'the Stewardship Code'. This sets out their approach to voting, dialogue with company management and any related activity. This is publicly available.
- Publish full voting record Find fund management companies that publishes a full record of how they vote at AGMs and EGMs. This information is publicly available.
- Review(ing) carbon/fossil fuel exposure for all funds Find funds / fund managers that are reviewing or have reviewed their exposure to carbon intensive industries including (but not only) mining, oil and gas companies. This work is being carried out in the context of climate change related concerns, and may often reference international agreements.
- Regularly lead collaborative ESG initiatives Find funds managed by fund management companies that regularly initiate or help run industry wide (collaborative) investor projects aimed at raising environmental, social and governance standards amongst investee companies.
- PRI signatory Find fund management companies that have signed up to the UN backed 'Principles of Responsible Investment' initiative.
SRI / Ethical Policy
Henderson implements a comprehensive Responsible Investment Policy through active management, integration of ESG factors into investment decision making, voting and company engagement.
The primary route for company engagement on stewardship-related issues is the regular meetings fund managers have with the companies that they invest in. Henderson’s fund managers hold in excess of 2,000 company meetings per year. Meetings incorporate a wide range of topics, including capital structure, mergers and acquisitions (M&A), management succession, and also environmental and social issues where relevant. The Governance and Responsible Investment (GRI) Team works closely with fund managers and highlights significant ESG risks ahead of company meetings. In addition, the team often leads on thematic and collaborative engagement work. During 2015 the GRI team engaged with over 100 companies on a wide range of ESG issues.
The Henderson Global Responsible Investment Committee oversees and reviews the implementation of the Responsible Investment Policy and any other related corporate governance and responsible investment matters within Henderson that may arise. The committee is composed of representatives of our equities, fixed income and multi-asset teams, members of our Governance and Responsible Investment Team and our distribution team. The committee is responsible for evaluating the effectiveness of our corporate governance and corporate responsibility work in influencing companies and generating analysis of value to our investment decision-making.
We exercise voting rights on behalf of clients at meetings of all companies in which we have a holding. The only exception to this is meetings where share blocking or other restrictions on voting are in place. Where we have taken a decision not to support a management proposal we will, where practicable, seek to raise the issues with the company prior to voting. To assist us in assessing the corporate governance of investee companies we subscribe to ISS (an independent proxy voting adviser). ISS provides voting recommendations based upon Henderson’s corporate governance policy. Corporate governance specialists in Henderson scrutinise the ISS custom policy research, and supplement this with in-house research and engagement. We disclose our global voting record in full on our website.
Day-to-day responsibility for overseeing voting decisions lies with the Governance and Responsible Investment Team. Voting decisions are made in close consultation with fund managers and analysts. Ultimate voting authority rests with individual portfolio managers, who are responsible for ensuring that votes are exercised in the best interests of fund beneficiaries. Our voting decisions are implemented electronically via the ISS ProxyExchange voting platform.
Resources, Affiliations & Corporate Strategies
We take an active approach to communicating our views to companies and seeking improvements where we believe there are shortcomings in performance, or a company has failed to apply appropriate standards, or to provide adequate disclosure. We will continue our dialogue with the company over an extended period if necessary. Escalation of our engagement activities will depend upon the company’s individual circumstances. Actions may include communications through the company’s brokers, direct engagement with the chairman or non-executive directors or joint intervention with other shareholders, and where appropriate, voting against board proposals.
We recognise that in many instances joint action by shareholders or bondholders has the potential to be more effective than acting alone. This is especially so where they have a clear common interest, such as in times of corporate distress. Our policy is to pursue opportunities for collaborative engagement in such circumstances.
Henderson is an active participant in a number of organisations that facilitate collaborative engagement, such as the NAPF, the Investment Association, the Investor Forum, the Asian Corporate Governance Association and the UNPRI Clearinghouse. Please see the Henderson responsible investment website for more details.
The Governance and Responsible Investment (GRI) team works closely with our investment teams to assist in the implementation of our policy. The team provides support to fund managers on research and engagement and leads on our participation in various external ESG initiatives. The GRI team is also responsible for overseeing our proxy voting process on behalf of fund managers.