Morrow Sodali is the leading global advisory firm focused on shareholder services, corporate governance, proxy solicitation, and capital markets transactions. Founded in 2007 by Maria Leftakis and Julian Lavigne, GPS provides advice to boards and senior executive teams on issues related to corporate governance. They also help with annual and special meetings, proxy campaigns, shareholder activism, initial public offerings.
They are known for executing multi-national stock, debt and merger & acquisition services. Lori Zyskowski counsels publicly traded companies and their boards of directors on matters related to corporate governance, securities disclosure and compliance, executive compensation practices, cyber-security supervision, and shareholder engagement and activist issues.
AX is a global leader in the areas of stock and asset transfer agencies. They help with employee ownership plans, mortgage services, proxy solicitation, and shareholder communications. A leader in the growing field of investor communications, headquartered in London. Boudica works to ensure maximum shareholder vote participation and proxy voting at shareholder meetings and company transactions. The hiring also advances Boudicca’s unique offering in the marketplace. They combine progressive proxy solicitation with modern business-governance advisory services with the latter serving as a critical differentiator for many clients.
In addition to institutional investors, there are numerous proxy advisory groups, both international and local, operating in Australia. They also provide advice on voting by institutional investors in company shareholder’s meetings, and/or serve as proxy investors to them. The size of an institutional investor’s stake may influence a company’s voting outcome. Institutional investors are in a position to exert pressure on the corporate board of directors and agitate for changes.
Some companies are filing additional materials soliciting votes around the time of annual shareholder meeting. This is done as part of an ongoing strategy for engaging shareholders. These proxy advisers are increasingly taking the lead role in shaping conversations about corporate governance. These are included through the identification of governance risks, conducting proxy voting studies, and providing voting recommendations to institutional investors.
Proxy advisors are frequently engaged by institutional investors, such as superannuation funds. This is to make recommendations about how to vote for proposed resolutions at the annual general meeting of the corporation. The voting recommendations from proxy advisory firms including, particularly, Institutional Shareholder Services (ISS) and Glass Lewis & Co.
Glass Lewis has excluded OTPP and AIMCo from any participation in drafting and implementation of its policies and guidelines on the proxy voting process. They are determining vote recommendations at particular shareholder meetings. CGI Glass Lewis explained its approach to conflicts on its website, and stated it does not provide advisory services to companies that are subject to securities issues. Nor do they provide advisory services to shareholders who are supporters of shareholder proposals, or dissident shareholders who are involved in governance disputes.
In Canada, the Task Force recommended that Canada adopt a framework for dealing with conflicts of interest in cases in which proxy advisory firms offer advisory services to issuers. Wherein they also make voting recommendations to their client’s proxy advisory firms. Fund managers should be required to disclose to the marketplace the use of proxy advisory services that they perform.
Proxy advisory firms in Australia are required to have Australian financial services licenses (AFSLs). They are required to comply with Corporations Act requirements and ASICs policies for managing conflicts of interest. In Australia, a proxy advisory company requires only an Australian Financial Services License (AFSL) if the advisory vote involves dealings in financial products. The four main Australian proxy advisors already have AFSLs for carrying out financial services activities for providing general advice about financial products.
To categorise proxy advisory services, which more appropriately should be called proxy research services. Proxy research services would still be classified as proxy solicitations. This means that they would fall under the anti-fraud provisions that forbid disingenuous or misleading communications. In practice, proxy services would remain liable for material misstatements and omissions of facts.
This reaction by markets is consistent with the Australian Governments position regarding the rules for proxy advisers. The Federal government’s recent announcement that it wants to regulate proxy advisors has proved contentious. The release of the Treasury Paper suggested that proxy advisors should be required to provide the companies they are reviewing with a five-day notice on how they advise shareholders to vote.
The SEC received feedback that this is too intrusive. It could result in delays for shareholders to get their vote recommendations in time by proxy advisers. Giving companies access to the draft recommendations before they are published could undermine the objectivity of proxy advisors. Since advisors could be influenced to give more favourable recommendations.
The Nominations and Corporate Governance Committee has assessed candidate’s qualifications. This is for membership on each board and concerning candidates seeking positions as independent directors. Their independence from the Aberdeen Asia-Pacific Income Funds Investment Manager, Investment Adviser and a sub-adviser, where relevant, and other key service providers. Each Nominating and Corporate Governance Committee also reviews. They may make recommendations too, each Board regarding the effectiveness of the Board in carrying out its responsibility to manage the Fund and supervise its operations.