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AMNT calls poor transparency in fund manager voting policies and practices as part of complaint to FCA

  • By Andrew Sullivan
  • News

As part of a formal complaint to the Financial Conduct Authority, the Association of Member Nominated Trustees has released the first detailed review into the voting policies and practices of fund managers across the UK, mainland Europe and the US.


The report found that only a few fund managers had what the AMNT considers best practice public voting policies and guidelines on climate change, gender and ethnic diversity.

The research was prompted by the continued unwillingness of fund managers to accept client-directed voting in pooled fund arrangements – most notably the AMNT’s Red Line Voting policies which were launched at the end of 2015.

The key findings of the report are:

Climate change: over half of the fund managers did not have a climate change-related voting policy or guideline in their voting policy

Gender diversity: over 30% of fund managers made no reference to gender diversity on boards

Ethnic diversity: nearly 75% of fund managers made no specific mention of ethnicity with regard to board diversity

Excessive pay: few fund managers (approximately 25% of those that published their policy) had a voting guideline on tackling excessive total remuneration in some form

AMNT has been told that if trustees do not like the policies pursued by their fund managers they can take their business elsewhere. The review indicates that there is nowhere else to go.

The AMNT has therefore requested that the FCA takes urgent steps to investigate this market failure and propose remedies that will enable pension scheme trustees to develop their own stewardship policies and their fund managers to accept them including within pooled funds and operate them at the very least on a comply or explain basis.

Commenting on the findings of the report, Guy Opperman, Minister for Pensions and Financial Inclusion, said:

“It’s utterly unacceptable that most pension fund managers don’t have published policies and practices to combat climate change, and public commitments to tackle excessive pay and promote gender and ethnic diversity are all too rare. Being vague or secretive with the trustees and savers they represent is out of order. These obstructive fund managers need to take action now as effective and responsible shareholders.”

Janice Turner, founding co-chair of the AMNT, said:

“We spent two years developing the Red Lines, a voting policy based on nationally or globally adopted principles such as the United Nations Global Compact, and which covers a comprehensive range of environment, social and governance issues including global warming. But those that adopted the Red Lines as their voting policy were shocked to find that their fund managers would not accept them even on a comply or explain basis. All but the largest pension schemes are facing an almost blanket refusal by fund managers to accept their voting policies in pooled funds. There is no ‘market’ in voting policies; we have no choice.”

Leanne Clements, campaign manager for Red Line Voting, added:

“There is a vicious circle here that needs to be broken through increased collaboration between asset owners and their fund managers, in order for us to effectively move forward. Greater transparency and accountability are the first step to achieving this.”

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