SIM falls in line with disclosure
Fund manager to disclose votes at annual meetings
Ten years after SAs largest fund manager, the’Public Investment Corporation, shook up the investment community by disclosing details of how it votes at company annual shareholder meetings, Sanlam Investment Managers (SIM) has finally fallen into line with what has become the industry standard at a time when disclosure requirements are set to be beefed up.
Ten years after SA’s largest fund manager, the Public Investment Corporation, shook up the investment community by disclosing details of how it votes at annual meetings, Sanlam Investment Managers (SIM) has finally fallen into line with what has become the industry standard at a time when disclosure requirements are set to be beefed up.
SIM, which manages more than R400bn in investments, is one of the largest asset managers in SA. All its major rivals, including Allan Gray, Coronation, Investec, Old Mutual and Stanlib, have been disclosing voting details for years. SIM is a signatory of the Code for Responsible Investing in SA (Crisa), which was set up in 2012 to create a governance framework for institutional investors.
Governance of powerful investment institutions is under the spotlight following the Steinhoff scandal, which resulted in the destruction of R200bn of investment value.
In a consultation paper released in September, the JSE called on all the role players within the broader financial market ecosystem to consider their roles in tackling the concerns of the investment community. The JSE paper asks whether large shareholders should be required to vote on every resolution at a shareholders’ meeting and publish how they voted on Sens. The suggestion develops recommendations set out by Crisa in 2012.
Principle 5 of the code recommends “public disclosure of full voting records”. It states: “If an institutional investor does not apply some or any of the principles or recommendations in Crisa or applies them differently from how they are set out, it should in a transparent manner explain the reasons and alternative measures employed.”
No explanation for its deviation from Crisa recommendations was provided until the Sanlam annual general meeting in June, when the board was challenged on the issue by shareholder activist Theo Botha.
He asked Sanlam chair Johan van Zyl why SIM did not make its voting record public as its major competitors did and as recommended by Crisa.
Van Zyl told shareholders they would “definitely look at” bringing the disclosure into line with the major players.
CEO Robert Roux queried the meaning of “making public”.
“Does it mean informing the whole world?” he asked. “We’ve decided to be transparent to the right people, who are our clients and on whose behalf we manage investments,” he said, explaining that the voting record by individual companies was given to Sanlam’s relevant clients. However, he told Botha the disclosure issue “is not something we can’t discuss”.
The next quarter’s results will reveal how SIM voted at one of the highest-profile meetings on SA’s corporate calendar, the Naspers annual meeting.