Voting rights strategy

Aviva Investors UK Fund Services Limited
Summary of approach to Voting Rights
Detailed below is a summary of the voting strategies employed on behalf of the collective investment funds (the Fund(s)) provided by Aviva Investors UK Fund Services Limited (AIUKFSL) as authorised corporate director or unit trust manager.

Some of the assets held within the Funds carry the right to vote on certain matters arising in respect of those assets. For example, where a Fund holds shares in an underlying company, the Fund may have the right to vote in respect of various affairs of the company, such as electing the board of directors, or other events initiated by the company, like mergers or acquisitions, which may have a material affect on the shares issued by the company. 

Voting in this way is important because it is the ultimate sanction by which management are held accountable for their stewardship of the assets into which the Funds invest. Corporate governance, engagement and voting form an integral and active part in managing, protecting and enhancing the long-term value of the investments made on behalf the Funds.

AIUKFSL, in its capacity as Authorised Corporate Director (ACD) of the Funds, is responsible for adopting a voting strategy, taking into account the investment objective and policy of the relevant Fund and potential conflicts of interest, which will determine when and how voting rights attaching to assets held within the Funds should be exercised. 

In practice, however, AIUKFSL has appointed Aviva Investors Global Services Limited, River Road Asset Management LLC* (“River Road”), MFS Investment Management (“MFS”), Tokio Marine Asset Management (“TMAM”), Schroders Investment Management Limited (“Schroders”) and FIL Investments International (“Fidelity”) to act as discretionary investment managers in respect of the Funds provided by AIUKFSL.  As such, exercising voting rights attaching to assets held within the Funds, on a day-to-day basis, has also been delegated to the appointed investment managers.

With the exception of the Funds below AIGSL acts as the discretionary investment manager for all other Funds provided by AIUKFSL.

Open Ended Investment Companies
Aviva Investors Global Services Limited

Summary of approach to Voting 

AIGSL aim to make a positive contribution to the evolution of good corporate governance by taking an active interest in the companies in which they invest and by protecting the rights of shareholders. Companies which are well governed and operate in a responsible and sustainable way should have the culture, attitude and transparent mechanisms in place to support their long-term health and shareholder value. Good corporate governance practice establishes the framework that facilitates the relationship between shareholders and the management of the companies in which they invest, and the voting of ownership rights is an important tool in that relationship.

The AIGSL Corporate Governance and Corporate Responsibility Voting Policy sets out how AIGSL exercise their responsibilities in this regard, and is available publicly on their website as well as by request. Their Voting Policy is an integral part of their approach to responsible investment, in particular to their stewardship responsibilities.

The Voting Policy covers all funds managed in the UK, and embodies the recommendations of the UK Corporate Governance Code, the International Corporate Governance Network's (ICGN) Global Corporate Governance Principles, and reflects AIGSL's  commitment to the UN Principles of Responsible Investment and to other national and international good practice guidelines. It is also an integral part of their compliance with Principle 12 of the UK Stewardship Code 2020 (“ Signatories actively exercise their rights and responsibilities.”).

1. AIGSL exercises its voting rights for the large majority of its holdings globally.  This typically equates to over 6,000 shareholder meetings per annum. Exceptions are in markets that require Powers of Attorney (PoA), which are costly and cumbersome to arrange, and they are only valid for one year in some countries. The decision to vote (in PoA markets) is therefore always based on a costs versus benefits analysis of voting for clients. For example, if AIGSL hold a large number of companies and / or has significant stakes in a PoA market, AIGSL would make the necessary arrangements to vote.
2. AIGSL consider resolutions on their own merits as well as in the light of appropriate policies, standards and good practice. The voting decisions are made in light of the investment objectives and policy of the relevant scheme and of the Voting Policy.
3. In making voting decisions, AIGSL use governance and other research from a number of sources. They use research for data analysis only and do not automatically follow any external voting recommendations. They believe that subscribing to a wide range of research gives a better and more objective overview of the governance arrangements at companies and enables them to check their own assessments.
4. If there are sufficiently material concerns, wherever possible AIGSL will engage with companies to explore or resolve issues before voting. Given the number of companies owned within the AIGSL  portfolios, they seek to prioritise engagement where it is most likely to benefit their clients.
5. AIGSL take their  fiduciary duties to clients and beneficiaries very seriously, and apply a consistent and transparent approach to the management of conflicts of interest. Their principal objectives when considering matters such as engagement and voting are always to act in the interests of their clients and underlying beneficiaries, and to treat all clients and beneficiaries fairly.
6. AIGSL publish their voting records, and these are publicly available on their website.

Further Information

For further information please see our approach to responsible investment.

River Road Asset Management LLC (“River Road”)

Summary of approach to Voting

You can view information on River Road’s approach to voting her­e.

MFS Investment Management (“MFS”)

Summary of approach to Voting

You can view information on MFS's approach to voting her­e.

Tokio Marine Asset Management (“TMAM”)

Summary of approach to Voting

You can view information on TMAM's approach to voting her­e.

Tax Transparent Funds (ACS Funds)
Schroders Investment Management Limited (“Schroders”)

Summary of approach to Voting

You can view information on Schroders’ approach to voting her­e.