The Future Fund has offered an insight into its engagement and stewardship efforts. In a report published on Thursday, the sovereign wealth fund said that exercising its voting rights in publicly listed companies encourages good governance and long-term value creation.
In its latest proxy voting and engagement activity report, the fund said it exercised its voting rights at a total of 232 shareholder meetings in the 12 months to June 2024.
This included voting against Woodside Energy’s latest climate plan at its annual general meeting in April, alongside fellow institutional investors like US pension fund CalPERS, HESTA, and Aware Super.
Almost 60 per cent of shareholders voted against the plan in what was described as a marked sign of investor dissatisfaction with the oil and gas company’s efforts to reduce emissions.
However, the Future Fund also revealed it supported the controversial re-election of chairman Richard Goyder, who was accused by some of putting shareholder money against an energy transition.
According to Future Fund’s report, the sovereign wealth fund also voted against Qantas’ executive pay plans in November 2023, following a year of significant public backlash against the airline.
The fund also voted against the re-election of a number of directors, including at Qantas, having pushed back against 5.7 per cent of the appointments it considered.
Moreover, the Future Fund indicated it voted against 18.9 per cent of the 232 remuneration reports it considered, including at Platinum Asset Management and Bank of Queensland.
The overall percentage of Australian resolutions where it voted against investee company board recommendations was 8.5 per cent, the fund said, which was “broadly consistent” with previous years.
“Our analysis of proxy voting activity by investors across the Australian market shows that the number of company remuneration reports receiving a strike (i.e. more than 25 per cent opposition) rose significantly during the year, with many recording protest votes in excess of 40 per cent against votes,” it said.
Primary factors driving this rise, according to the fund, included “excessive pay outcomes in light of poor outcomes for shareholders” and “generous and/or poorly justified use of board discretion in the operation of incentive plans”.
Delving into its own corporate engagement, the Future Fund said it aims to ensure companies in its portfolio are well-governed and prepared to address ESG challenges and opportunities.
“Our commitment to active engagement not only helps protect the board’s investments but also contributes to improving the system as a whole,” it said.
Moreover, the fund disclosed that in the financial year 2024, it engaged with 32 different ASX companies across 51 meetings.
“Our engagement included companies in the banking and finance, mining and metals, oil and gas, consumer, retail, and industrial sectors,” it said.
While issues discussed during the year varied, the fund said matters relating to modern slavery, climate change and board composition were most frequently covered, followed by matters relating to remuneration, diversity, safety, Indigenous relations, and corporate culture.
Some of the observations it made during the meetings include that climate change, cyber security, health and safety, the cost of living, and responsible AI were front-of-mind for most ASX boards.
