Neuberger Berman engagement efforts lead industry on key ESG issues
Neuberger Berman, a private, independent, employee-owned investment manager, has announced the second year of its advance proxy voting disclosure initiative, whereby the firm will disclose and publicly explain its voting rationale on select issues.
Renamed “NB Votes” (previously “NB25+”) as part of an expanded global effort, the firm plans to disclose in advance its votes on a range of key issues across its nine key governance and engagement principles.
Neuberger Berman is the first major asset management firm to provide broad advance proxy vote disclosure. Mindful of the profound impacts of both the COVID-19 pandemic and important social justice advocacy, NB Votes aims to address key themes at the forefront of investors’ minds this proxy season. Those areas include diversity, human capital management, capital allocation, pay equity, racial equality, political contributions, and climate change.
As ever, Neuberger Berman aims to enhance shareholder returns, fulfil fiduciary responsibilities to clients, and promote transparency and accountability. The NB Votes initiative is an opportunity to communicate the firm’s views on a variety of topics and articulate the nuanced judgement that goes into its proxy voting. As a result, NB Votes will improve the overall transparency on proxy voting, which is an area of interest to clients, companies, regulators, and market participants more broadly. The advance vote disclosures are an integral component of the firm’s active portfolio management and are driven by more than 600 investment professionals who, in addition to contributing to NB Votes, directly lead the firm’s ongoing engagement with the companies in which Neuberger Berman invests for its clients.
George Walker, CEO of Neuberger Berman, says: “Last year we held over 3,500 engagement meetings with corporate management teams across equities and credit, and pre-announced our voting rationale for 31 issuers. Reflecting back, company management teams valued the clarity of the explanation of our voting rationale as it enabled a more robust dialogue with our investment professionals. Clients also appreciated that votes were not being cast in a ‘box-checking’ fashion and appreciated the rigor that informed why we might support a shareholder proposal at one company but not at another. As proxy voting becomes increasingly complex, we believe investment managers have an even greater opportunity to demonstrate research-driven judgements on a range of key ESG issues. We invite all other asset managers to join in disclosing their key votes so our voices can be heard and impact real, meaningful change.”
Neuberger Berman recognises that no other large investment manager (AUM +USD100 billion) discloses a meaningful number of key votes this far in advance of shareholder meetings. Most firms disclose votes long after the election, if at all.
“A year like 2020 reinforces why our proxy efforts must be dynamic,” says Caitlin McSherry, director of stewardship at Neuberger Berman. “Among other things, the Covid-19 pandemic shined a spotlight on the importance and complexity of ESG issues.”
Jonathan Bailey, head of ESG investing, says: “While our core priorities remain consistent, our ability to target particular issues, like executive compensation and political contributions, provide a platform and opportunity to drive transparency and progress.”
The rationale for each specific NB Votes item is located on the firm’s new dedicated NB Votes website. New votes and their rationales will be added throughout the proxy season.