The Future Fund offered an overview of its engagement and management efforts. In a report published Thursday, the sovereign wealth fund states that the exercise of voting rights in listed companies encourages good governance and long-term value creation.
In its latest proxy voting and engagement activity report, the fund said it had exercised its voting rights at a total of 232 shareholder meetings in the 12 months to June 2024.
This included voting against Woodside Energy’s latest climate plan at its annual general meeting in April, alongside other institutional investors like US pension fund CalPERS, HESTA and Aware Super.
Nearly 60 percent of shareholders voted against the plan, in what was described as a strong sign of investor dissatisfaction with the oil and gas company’s efforts to reduce its emissions.
However, the Future Fund also revealed that it supported the controversial re-election of chairman Richard Goyder, who was accused by some of investing shareholders’ money against the energy transition.
According to the Future Fund report, the sovereign wealth fund also voted against Qantas’ executive pay plans in November 2023, following a year of strong public backlash against the airline.
The fund also voted against the re-election of a number of directors, including at Qantas, after opposing 5.7 per cent of the proposed nominations.
Additionally, the Future Fund said it voted against 18.9 per cent of the 232 remuneration reports it reviewed, including at Platinum Asset Management and Bank of Queensland.
The overall percentage of Australian resolutions in which it voted against board recommendations of companies it invests in was 8.5 per cent, the fund said, which was “broadly consistent” with previous years.
“Our analysis of investor proxy voting activity in the Australian market shows that the number of remuneration reports from companies undergoing strike action (i.e. more than 25 per cent of opposition) increased significantly over the year, with many recording protest votes exceeding 40 percent. against the votes,” he said.
The main factors behind this increase, according to the fund, include “excessive remuneration in view of poor results for shareholders” and “generous and/or poorly justified use of the discretionary power of the board of directors in the operation profit-sharing plans”.
Building on its own corporate engagement, the Future Fund said it aims to ensure its portfolio companies are well-governed and prepared to address ESG challenges and opportunities.
“Our commitment to active engagement not only helps protect board investments, but also helps improve the system as a whole,” he said.
Additionally, the fund revealed that in the 2024 financial year it engaged with 32 different ASX companies across 51 meetings.
“Our engagement included companies from the banking and finance, mining and metals, oil and gas, consumer, retail and industrial sectors,” it says.
Although the topics discussed during the year varied, the fund said issues relating to modern slavery, climate change and board composition were the most frequently covered, followed by issues related to compensation, diversity, safety, relations with indigenous people and corporate culture.
Some of the observations made during the meetings include that climate change, cybersecurity, health and safety, cost of living and responsible AI were at the forefront of most boards’ minds. the ASX.
