Corporate Governance and Shareholder Rights

Good corporate governance is critical for the successful execution of an SRI agenda: it allows relevant extra-financial (“ESG”) issues to be debated at the highest corporate level, between board directors and shareholders.

Ownership and power imply responsibility from institutional investors. With a long-term investor perspective, it is fundamental that shareowners can actively exercise their rights to vote and engage with the companies they own. In this respect, Eurosif recommends to ensure greater transparency concerning shareholders rights, in particular concerning the identification of the shareholder, the proxy voting chain and stock lending.

Another key Eurosif asks is to make sure that the proxy voting chain is more “shareowner-friendly”.The entire proxy voting chain is complex in its nature, involves a great number of service providers (custodians, sub-custodians, voting service providers, etc.) with limited incentives to upgrade their systems and whose results are not auditable. This results in several operational barriers to the exercise of voting rights (share blocking, lack of confirmation of what has been done with the vote, etc.). Eurosif therefore recommends making service providers along the voting chain more accountable and transparent.

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