PLSA updates Vote Reporting Template to improve transparency and accountability

The Vote Reporting Template was first produced in 2020 in response to new regulations requiring pension fund trustees to demonstrate how they are acting as effective stewards of their assets, including how they are using their voting rights to support or sanction corporate behaviour among their investee companies.

It allows asset owners to collect voting information from their investment managers in a standardised way and facilitate an improved dialogue between parties about how their stewardship strategy is being implemented.

The template has been updated following extensive work by the FCA-convened Vote Reporting Group (VRG), set up in November 2022, to develop detailed proposals to enhance shareholder vote reporting by asset managers operating in the UK. The VRG comprises members from across the investment chain, including investment managers, pension funds, insurers, companies, and NGOs.

The PLSA has taken on the vote reporting template of the VRG, merging it with elements of its existing template to create a new, updated resource.

The updates include incorporating standard vote category fields and a narrative rationale field alongside relevant elements of the existing PLSA template. Notably, fields to allow managers to outline the rationale for voting decisions on issues that are determined to be significant votes have been included.

This has resulted in a standardised and comprehensive vote reporting template which is intended to be more user-friendly and addresses the challenges asset managers currently face relating to the varying nature of vote reporting disclosures.

The improvements are aimed at improving vote reporting quality and consistency, reducing reporting costs for asset managers, increasing transparency and comparability for clients, and enhancing engagement and market discipline.

Joe Dabrowski, Deputy Director of Policy at the PLSA, said: “As stewards of more than £2.5 trillion, pension schemes wield significant power to change the behaviour of companies for the better, improving practices and increasing shareholder returns.

“The new and improved Vote Reporting Template we have launched today will allow investment managers to report on their voting activity more easily and at a lower cost, and further standardisation means asset owners will have better quality information to have a dialogue with their asset managers about how their stewardship strategy is being expressed. By improving transparency and accountability we aim to lift stewardship standards across the industry to the benefit of savers.”

Caroline Escott and Shipra Gupta, Co-Chairs of the Vote Reporting Group said: “Shareholder voting is fundamental to effective stewardship that achieves sustainable value creation. Timeliness, consistency, and decision-useful information on voting actions undertaken on behalf of everyday UK savers has been a longstanding discussion and debate between asset owners and asset managers.

As co-chairs we are pleased to have worked with asset owners, managers, proxy advisers and others across the voting ecosystem to develop this ‘for industry, by industry’ vote reporting template. We think this template provides much-needed transparency in a standardised and efficient manner, ultimately resulting in greater stewardship alignment across the investment chain.”

Sacha Sadan, Director of Sustainable Finance at the FCA, said: “This standardised and comprehensive template acts as another tool that can provide meaningful insight on how asset managers vote, allowing their clients to compare and align their voting intentions. This can help support positive and sustainable real-world change.”

The Vote Reporting Template and accompanying introductory document can be downloaded from the PLSA website here.

Mark Smith, Head of Media Relations
020 7601 1726 | [email protected]

Cali Sullivan, Senior PR Manager
020 7601 1761 | [email protected]