Stewardship Activity Report: Q4 2017

Stewardship Highlights
This report provides a review of the recent Australia proxy season, discusses proxy plumbing issues exposed by a high profile proxy contest, and introduces our 2018 sector and thematic priorities.

Australia Proxy Season Review
During the course of 2017 SSGA engaged with 35 Australian companies and manually reviewed 288 or 61% of the 472 shareholder meetings voted. We have been encouraged by developments such as improving board diversity and thoughtful approaches to climate risk disclosure. At the same time we are concerned about remuneration programs becoming short-term focused and the persistence of re-testing.

Improvements in Board Diversity
Australia is one of the three markets SSGA focused on in connection with the Fearless Girl Campaign launched in Q1 2017. Over the course of the year 42% of the ASX 300 companies without a single woman on their board either added one or committed to do so.

  • We identified 45 Australian companies that lacked a single female board director of which 11 companies added a woman and eight companies have committed to adding a woman on
    their boards in the coming year
  • We voted against directors of 26 companies for having zero women on their boards. We will continue to engage companies on diversity levels in Australia and monitor improvements.


Remuneration
After several years of improvement in remuneration practices and disclosure, Australian companies are still lagging their US and UK peers. Countering this trend is an overall improvement in the diversity of remuneration metrics being used as companies shift from relying on Total Shareholder Return (TSR) exclusively. Below, we have discussed our observations in greater detail.

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Stewardship Contacts:

Rakhi Kumar
Senior Managing Director,
Head of ESG Investments and Asset Stewardship
rakhi_kumar@ssga.com
+1 617 664 5556

Robert Walker
Managing Director,
Head of EMEA Asset Stewardship
robert_walker@ssga.com
+44 (0)20 3395 6760

Matt DiGuiseppe
Vice President,
Head of Americas Asset Stewardship
matthew_diguiseppe@ssga.com
+1 617 664 5056

Disclosure

he whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA’s express written consent.

The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor.

All material has been obtained from sources believed to be reliable. There is no representation or warranty as to the accuracy of the information and State Street shall have no liability for decisions based on such information.

The views expressed in this material are the views of Rakhi Kumar through the period ended December 31, 2017 and are subject to change based on market and other conditions and are subject to change based on market and other conditions. This document contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.

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ID12361-2059576.1.1.NA.RTL 0318 Exp. Date: 03/31/2019