Neuberger Berman launches NB25+ advance proxy vote disclosure initiative
Neuberger Berman, a private, independent, employee-owned investment manager, has launched the NB25+ advance proxy vote disclosure initiative to publicly disclose and explain the firm’s voting rationale and intentions at more than 25 key annual shareholder meetings.
Neuberger Berman recognises that at this moment, the focus is on the global health crisis and the protection of the most vulnerable. But, the company believes that governance and sustainability practices will increasingly matter and can directly impact both long-term performance and resilience in future crises. To that end, Neuberger Bermann is changing its practices and becoming the first major asset management firm to provide advance proxy vote disclosure.
The advance vote disclosures will be driven by Neuberger Berman’s more than 600 investment professionals and not by a small stewardship group or independent proxy advisors. These are the same professionals who lead the company's on-going engagement with the firms in which it invests or whom finances.
Neuberger Berman says its aim is to protect shareholder capital, fulfil fiduciary responsibilities to clients, promote transparency and accountability, and exceed regulatory requirements. Neuberger Berman plans to expand this initiative over time and invites other managers to join in disclosing their key votes.
“Leadership matters, especially in difficult periods. Firms with sustainable practices will be more resilient. Shareholders need to engage as owners for our capitalist system to work. Therefore, we have decided to step forward and share our thinking upfront on issues facing companies in which we invest. It can be tough to publicly challenge management or speak up for or against activists, but we think it’s more important now to make our voice heard as we seek to improve the firms in which we invest,” says George Walker, CEO, Neuberger Berman.
Neuberger Berman understands no other large investment manager (AUM USD100 billion-plus) discloses a meaningful number of key votes well in advance of the meeting. Most firms disclose votes long after the election, if at all.
For example, Neuberger Berman may disclose a planned vote against a director who sits on many other boards on the basis that it is unlikely that they can fulfil their responsibilities adequately, particularly during periods of crisis. Or on a compensation plan which may not foster good long-term capital allocation or which may encourage excessive leverage and reduce the ability of the company to weather economic shocks. Or on a shareholder proposal which if acted on might improve the resilience of the supply chain or protection for workers.
Jonathan Bailey, head of ESG investing at Neuberger Berman, says: “Some of the world’s most sophisticated asset owners disclose their votes in advance because they understand that it can help elevate the quality of corporate governance at companies. We think it is time for large asset managers to do the same. Our analysts and portfolio managers conduct thousands of engagements with companies each year, and we cast proxy votes based on our own guidelines and analysis. By disclosing key votes in advance, we hope that more companies will be clear about our expectations.”
Details on NB25+ are located on the firm’s Engagement and Proxy Voting website. The NB25+ disclosures began posting on Friday, 3 April, 2020. Voting summaries will be added throughout proxy season.