Proxy Voting Reports
Introduction
Russell recognises the requirements established in the US under the mutual fund proxy voting rules, the standards of best practices set up in the UK by the NAPF guidelines and in Australia by the IFSA Proxy Voting Standard and other existing best practices and fiduciary standards, and on investment management concepts relating to promoting investor value. Russell has considered these rules, standards and concepts in establishing these Proxy Voting Principles and the Proxy Voting Guidelines designed to implement them. Proxy issues by their nature are often complex and fact dependent and both these Proxy Voting Principles and the Proxy Voting Guidelines are intended to be applied pragmatically
Principles
Through their corporate governance system, corporations specify the distribution of rights and responsibilities of all stakeholders. The governance system is the framework within which corporate activities are directed and controlled, through which objectives and guidelines for activity are set, and performance is monitored. Russell believes that the best interests of shareholders are served when corporate governance systems promote transparency of policy and action, accountability for results, board independence, and a maximisation of the company's long-term economic value. Accordingly, we generally support proposals which increase transparency, improve accountability, ensure independence, and enhance long-term share value.
- Transparency. Shareholders are best able to gauge the value of and exercise their ownership when both corporate policies and actions are visible to them. Proposals which limit the ability of shareholders to see and evaluate mergers and acquisitions or evaluate tender offers are not transparent. Nor are policies which limit the ability of shareholders to reject poison pill defenses transparent. In general, any policy which improves the ability of shareholders to see into the activities of the firm are consistent with shareholders interests.
- Accountability. Shareholder interests are best served when management is accountable for corporate performance. Compensation plans which provide excessive compensation without suitable links to performance or which provide substantial payment for failure are against shareholder interest. Such payment should be tied to objective measures of company performance. Stock or stock options should be a significant enough source of executive compensation to align management interests with shareholders, and designed to tie management to the downside risk of stock performance.
- Independence. (a) Boards of Directors, Audit Committees, and Executive Compensation Committees should be sufficiently independent of the management and without personal or material financial relationships with the company or its managers to provide a reasonable check on management activity. The Board should be composed of at least a majority of these independent Directors and key committees such as audit, compensation, nominating, or governance committees should be composed exclusively of independent Directors. There should be adequate disclosure of all ties between Board members, the company and company management. (b) The company's auditors should be independent of the company. (c) The company's investment managers should be given instructions to vote shareholder proxies in the sole interest of shareholders.
- Long-term value. Good governance will keep a company focused on the creation of long-term value. Policies and structures which enhance that focus will benefit both shareholders and other stakeholders in the firm. When a company becomes focused on short-term profits, current earnings forecasts, or analysts’ estimates, good governance may be jeopardised and the fundamental soundness of the business may be compromised. Russell believes that the pursuit of goals without direct economic impact can often enhance shareholder or stakeholder interests. However, the pursuit of these types of objectives may also create conflicts between groups of stakeholders that are difficult to resolve. Accordingly, Russell assesses the short-term and long-term impact of an issue, and considers positions that are consistent with the long-term economic best interests of shareholders.
If you are an investor in a Russell Fund, you can send us an email to syd-ops@russell.com to request any of the following additional information about your fund:
- Russell's proxy voting policy
- a copy of the latest voting summary report for your fund (please provide fund name)
- a copy of voting summary reports for your fund for earlier quarters in the last financial year (please provide fund name)
PDF download Russell Private Investment Series PDS
(890kb)
Russell Class A Monthly Performance Report as at 31 December 2008 (85kb)
Management costs for the funds – financial year ended 30 June 2008 (103kb)
Taxation Notice
Subdivision 12-H (23kb)