Independently verifying voting alignment for a £100bn+ European public pension fund

We worked with a £100bn European state pension fund to review its voting record, to assess the consistency between its voting policies and actual voting behaviour. This helped to identify any gaps and to ensure the fund’s stewardship activities align with its investment philosophy. 

As long-term stewards of capital, our asset owner clients exercise their shareholder voting rights to promote strong governance, accountability, and sustainable performance. Some owners delegate these voting rights to asset managers; others may establish detailed voting policies setting out how they intend to vote on issues such as board composition, executive remuneration, and shareholder rights.

However, the practical implementation of voting – often executed across thousands of meetings and sometimes via proxy voting service providers – can create a risk that individual votes deviate from the scheme’s stated policies. Voting is one of the most visible tools in an investor’s stewardship toolkit, and inadvertently voting against your own policy can hinder the effectiveness of engagement.  

Our approach 

From a universe of 3,585 meetings, we identified a random sample of 200 meetings designed to be representative of the wider universe, such as regarding the topic of the proposal, location of the vote, and the split between management and shareholder proposals.  

Across these 200 meetings, we assessed the votes cast on 2,306 individual resolutions, covering a wide range of themes from board diversity and executive remuneration to contested shareholder proposals on human rights and environmental matters.  

On more contentious and high-profile resolutions, we compared how the scheme voted against other major asset owners and managers using our proprietary stewardship dashboard. This helped our client to put the differences in voting patterns in a wider context.  

The outcome 

Across the 2,306 resolutions reviewed, our analysis confirmed that 99.5% of votes were cast in line with the scheme’s policy. We flagged a small number (12) of potentially misaligned votes, and discussed these with the Scheme’s stewardship team to gain any additional context.

These flagged votes fell into three categories:  

• votes not fully aligned with the policy’s general principles 
• votes influenced by potentially incorrect proxy adviser recommendations 
• votes potentially overridden incorrectly by the scheme 

These potentially misaligned votes ranged across different themes, including director elections, transparency, animal welfare, nuclear energy and auditor appointments.  

The value we added 

The review provided independent assurance, and comfort, that the scheme’s voting practices were largely operating as intended. We also set out targeted areas where processes or guidance could be refined. 

By highlighting the small number of potential discrepancies between the scheme’s voting policy and its implementation, we helped the Scheme’s stewardship team identify where misalignment may have occurred. This helped them strengthen their voting processes to reduce the risk of future inconsistencies.  

Benchmarking selected votes against other major asset owners and managers also helped the team understand the wider context of other asset owners and how its voting approach compared with peers on high-profile issues.