Simona Rubino from GAM's Responsible Investment team shares her views on key themes for 2025 Proxy Season and provides a review of GAM's approach to proxy voting during 2024.
14 April 2025
Voting is a fundamental part of our investment management approach, alongside investment analysis and engagement. We outline our expectations for companies in our Corporate Governance and Voting Principles.
In 2025 the dynamism dictated by technological advancements, geopolitical shifts and evolving regulatory landscapes, is reflected in higher stakeholder expectations for boards to ensure they can effectively deliver on their business strategy with long-term value creation goals in an increasingly complex environment. These considerations are incorporated in our approach for the 2025 proxy season.
While no material changes have been made to our Corporate Governance and Proxy Voting Principles, our assessments during the 2025 proxy season will include a focus on the following areas:
- Uncertainty, complexity, and change in 2025 will continue to challenge businesses on different fronts. For 2025, we will continue to scrutinise the robustness of governance structures, corporate disclosure on risk management processes, together with responsiveness to shareholder concerns.
- We will review how companies have considered and responded to stakeholder expectations, including those raised through shareholder resolutions, such as artificial intelligence. We expect companies to discuss the steps taken and the timeline expected to address concerns highlighted in shareholder resolutions that received significant support.
- Board directors are being called to take on new responsibilities and develop new skills. We expect boards to be equipped with knowledge on ESG related regulations and reporting, as well as best practices, and effectively communicate these with relevant stakeholders. We also consider it imperative in the current times of change that boards remain aligned to good governance principles and practice.
- We believe that diversity in gender, skillsets and background plays a valuable role in enhancing corporate governance standards, improve performance and tackle environmental challenges more effectively. We look how companies set up and disclosed an actionable process to gradually increase female representation on the board and at a senior management level, as well as initiatives to improve the pipeline of female talent. We will also monitor developments in the US market regarding diversity considerations and continue to engage with our investees to discuss challenges and assess their progress.
- We understand that businesses competing on a global scale are challenged by the need to offer competitive compensation packages to attract and retain the best talent. It is important when setting pay levels to incorporate considerations on the impact of macroeconomic variables on various stakeholders, including inflation, cost of living together, consumers’ needs and spending.
- We expect that any targets set in the business strategy, particularly relating to the mitigation of material risks, be incorporated into pay programmes.
- In our review of our Corporate Governance and Proxy Voting Principles for 2025, we have clarified our expectations in relation to meeting formats, given the recent regulatory developments in Italy, which introduced the possibility for companies to hold “closed-door meetings” where shareholder participation is precluded. We expect that any changes proposed to the format in which shareholder meetings are held will safeguard shareholder participation, and boards can be still held accountable through questions on issues of concern.
- Given the growing focus on biodiversity and nature, we will leverage data and internal tools to assess our investees exposure and efforts to mitigates these risks, as well as shareholder resolutions on these topics.
Our Approach in Practice – 2024 Proxy Season Review
In 2024, the scrutiny on how businesses manage material systemic risks continued. ESG resolutions confirmed this as an area of focus, whilst also highlighting new areas of vulnerability and opportunities for improvement. The traditional corporate governance themes however, remained the main driver of our opposition votes given their critical role in ensuring stakeholder protection, oversight, and management of Environmental and Social (E&S) risks, as well as influencing financial stability and long-term value creation. Board composition and responsiveness, corporate disclosures, and oversight structure were at the core of our voting considerations.
2024 GAM Voting Outcomes
In our blog post published ahead of the 2024 proxy season, we discussed our enhanced expectations on certain areas of corporate governance, including board independence and diversity. These changes were reflected in our Corporate Governance and Voting Principles and led to 11.8% (2023: 10.8%) votes against management on the 8,947 unique resolutions and 729 meetings (2023: 912) we voted in 2024. The below chart shows a breakdown of our votes by resolution category.
The greatest concentration of our votes against management was related to the election of directors, remuneration practices, appointment of independent auditors, and ESG-related resolutions.
Election of directors
- Whilst we generally take a holistic view on how the composition of a board reflects the evolving needs of a business, and assess the disclosures provided by the company, including any explanatory notes on board composition, we expect that both the average and absolute tenure of board members to not exceed nine years. We believe that excessive tenure can compromise independence of thought, judgement, and oversight. In 2024, we raised our expectations for companies listed on primary markets to aspire to 67% board independence.
- We generally oppose the re-election of the Chair of a Committee that fails to comply with our independence expectations. Where we encountered an unwillingness to respond to our concerns, we escalated our opposition to all members of the committee or Board Chair.
- We expect the role of the chair to oversee the board, providing direction to management and protecting the long-term interests of shareholders, with the CEO focusing on the day-to-day management and operation of a company. When these roles are held by the same person there is the potential for the CEO to exert significant influence over the board, leading to the risk of entrenchment.
- These concerns led to our opposition to the election of board members supported by positive engagements with these companies to discuss our expectations. Case studies and outcomes of these engagement will be discussed in our 2024 Stewardship Report.
ESG - Shareholder resolution
We supported 54.4% of the overall 299 shareholder resolutions we voted on in 2024 (2023: 50.4%). The above chart shows the breakdown of our support on shareholder resolutions by ESG theme, excluding shareholder resolutions submitted for election of directors in slate or cumulative voting systems and contested elections.
The key trends on shareholder resolutions we voted on in 2024 and our approach are as follows:
- We did not support resolutions crafted with prescriptive requests for our investees or imposing unnecessary constraints given disclosure and processes already in place.
- As we continue our engagement efforts on climate-related themes, we considered that many of our investee companies are progressing in setting and delivering on GHG reduction targets and providing detailed disclosure on their strategies. This led us to only support 35% of climate-related resolutions.
- We generally supported climate and environmental resolutions requesting target setting and more comprehensive disclosure on transition risks, when we considered there was a lack of clear transition strategy, or the additional reporting requested was not overly prescriptive for the company.
- We generally supported climate and environmental resolutions requesting target setting and more comprehensive disclosure on transition risks, when we considered there was a lack of clear transition strategy, or the additional reporting requested was not overly prescriptive for the company.
- We supported resolutions requesting enhancements in disclosure and transparency on companies’ efforts to managing and overseeing diversity initiatives, human rights- related risks, as well as campaign spending and lobbying when, in our view, the disclosures provided were not exhaustive and the request was not overly burdensome. We supported 62% of these resolutions.
- We voted in support of all these resolutions except at a few investees where we believed that the board was already equipped in overseeing and managing these risks through robust policy and processes as well as detailed reporting.
Remuneration
You can read our latest Sustainability Report, Stewardship Report and other Sustainability-related disclosures here.
Important disclosures and information
The information contained herein is given for information purposes only and does not qualify as investment advice. Opinions and assessments contained herein may change and reflect the point of view of GAM in the current economic environment. No liability shall be accepted for the accuracy and completeness of the information contained herein. Past performance is no indicator of current or future trends. The mentioned financial instruments are provided for illustrative purposes only and shall not be considered as a direct offering, investment recommendation or investment advice or an invitation to invest in any GAM product or strategy. Reference to a security is not a recommendation to buy or sell that security. The securities listed were selected from the universe of securities covered by the portfolio managers to assist the reader in better understanding the themes presented. The securities included are not necessarily held by any portfolio or represent any recommendations by the portfolio managers. Specific investments described herein do not represent all investment decisions made by the manager. The reader should not assume that investment decisions identified and discussed were or will be profitable. Specific investment advice references provided herein are for illustrative purposes only and are not necessarily representative of investments that will be made in the future. No guarantee or representation is made that investment objectives will be achieved. The value of investments may go down as well as up. Investors could lose some or all of their investments.
The foregoing views contains forward-looking statements relating to the objectives, opportunities, and the future performance of markets generally. Forward-looking statements may be identified by the use of such words as; “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” “potential” and other similar terms. Examples of forward-looking statements include, but are not limited to, estimates with respect to financial condition, results of operations, and success or lack of success of any particular investment strategy. All are subject to various factors, including, but not limited to general and local economic conditions, changing levels of competition within certain industries and markets, changes in interest rates, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors affecting a portfolio’s operations that could cause actual results to differ materially from projected results. Such statements are forward-looking in nature and involve a number of known and unknown risks, uncertainties and other factors, and accordingly, actual results may differ materially from those reflected or contemplated in such forward-looking statements. Prospective investors are cautioned not to place undue reliance on any forward-looking statements or examples. None of GAM or any of its affiliates or principals nor any other individual or entity assumes any obligation to update any forward-looking statements as a result of new information, subsequent events or any other circumstances. All statements made herein speak only as of the date that they were made.