The Directors and Management Team of DNR Capital (collectively referred to as DNR Capital) are committed to effectively managing Environment, Social and Governance (ESG) issues such that risks and opportunities are identified and properly assessed.
DNR Capital recognises that companies with good ESG practices can enhance shareholder returns. DNR Capital have adopted an ESG integration and engagement strategy and our corporate engagement program complements our ESG integration. There are two components to DNR Capital’s engagement strategy which include proxy voting and DNR Capital’s company meetings program.
DNR Capital believe that proxy voting is an important tool for investors. Proxy voting enables investors to communicate their views to a company and input into key decisions, such as executive remuneration and Board director appointments. Proxy voting may also be used as an escalation tool, where other company engagement initiatives have been unsuccessful, such as voting against executive remuneration or the re-election of a director. Proxy voting is also a tool to engender long term relationships with investee companies. Increasingly, Board Chairs seek to engage with shareholders on issues including climate strategy and their “Say on Climate” vote, executive remuneration, Board governance, and other strategic issues.
This policy sets out DNR Capital’s approach to proxy voting and includes our principles of good governance which are informed by ASX Corporate Governance Council’s Principles and Recommendations.
The guiding principle when DNR Capital votes on a resolution is that our voting decision must be in the best interests of our clients. Decisions are made on a case-by-case basis after an assessment of the relevant information available and taking into consideration the impact of ESG risks and potential effect on the performance of the portfolio.
- DNR Capital will vote on all resolutions where it is possible given custodial and proxy voting arrangements for the underlying clients that it invests for.
- Proxy voting is co-ordinated by DNR Capital’s ESG investment analyst. DNR Capital engage proxy adviser, Ownership Matters, to provide supplemental proxy research. However, proxy voting decisions are the responsibility of the underlying stock investment analyst, and proxy voting execution is the responsibility of the Portfolio Administration team.
- DNR Capital investment analysts, in conjunction with the ESG investment analyst, conduct an independent assessment of the proxy resolutions and form an independent view on voting recommendations. DNR Capital engage proxy adviser, Ownership Matters, to provide supplemental proxy research. DNR Capital may also contact the investee company for further information.
- Where the analyst’s voting recommendation is counter to the investee company’s or the proxy advisor’s recommendation, the analyst will provide a written explanation justifying their voting recommendation.
- DNR Capital endeavour to notify investee companies where we vote against its recommendation.
- For Australian investments that are subject to the ‘Two Strikes’ legislation, where an investee company incurs a first strike, DNR Capital regularly engage with the investee company’s Chair to improve their remuneration policy and practices to reduce the likelihood of a second strike.
- We report on our proxy voting activities to stakeholders through our annual Stewardship
- Report, presentations and bespoke client requests.
The guiding principle when DNR Capital votes on a resolution is that our voting decision must be in the best interests of our clients. Decisions are made on a case-by-case basis after an assessment of the relevant information available and after considering our principles of good governance, which are informed by ASX Corporate Governance Council’s Principles and Recommendations.
- A majority of independent directors
- An independent Chair who is not the CEO
- Board and management diversity
- An audit committee with a majority of independent directors and a Chair who is not the Company Chair
- A commitment to act ethically and responsibly
- Good disclosure of information about the company, its governance and its material risks
- Remuneration structures that are fair, responsible and align the interests of executives with shareholder value creation.
Voting rights exercised are recorded. We report on our proxy voting activities to stakeholders through our annual Stewardship Report, presentations and bespoke client requests.
Roles & Responsibilities
The Board and executive management
The Board and executive level management have formal oversight over and accountability for responsible investment, including proxy voting, at DNR Capital. Responsible investment outcomes will be reflected in executive remuneration.
Socially Responsible Investment (SRI) Committee
DNR Capital’s SRI Committee was established in 2010 and oversees the implementation of our ESG policies and integration of ESG into investment decision-making.
DNR Capital’s ESG integration and engagement initiatives are conducted by the investments team. As such, the insight gained from the process is incorporated into the research and investment decision-making process. Responsible investment outcomes are reflected in remuneration.