PGGM’s Voting Revisited for 2024

Officially, exercising your voting rights as a shareholder is the only form of influence investors have.

We can buy and sell shares, enter into a dialogue with our investee companies and, if necessary, even sell our holdings. But the only time companies actually have to do what they are told, is through shareholder meetings where we cast our votes.

Voting also shows that being a responsible investor is more than just having policies and guidelines in place. It is about using your influence to push for the changes you believe are needed.It is exactly for this reason that PGGM decided years ago to internalize all of our voting (meaning all voting is done in-house).

We are therefore pleased to see that our efforts as a responsible and critical shareholder are being recognized externally by outside organizations such as ShareAction in their latest Voting Matters 2023 report in which they analyzed the voting behavior of a large number of institutional investors.

Similar to any other democratic process, exercising voting rights does not guarantee success.The basic principle of democracy is that not the minority but the majority decides, no matter how loud or angry they may be.However, it is always important to ensure that your voice is heard and, by doing so, one can still assert influence.

Diversity
Over the past two years, PGGM’s Global Voting Guidelines. These guidelines clarify our voting position/intention on various environmental, social and corporate governance subjects, and have referenced board diversity as a topic of interest.In our previous guidelines, PGGM expected (i) “boards to be composed of diverse individuals in terms of gender, age, cultural background, tenure, skills, education, experience, expertise and personal qualities that are appropriate to the company’s current and long-term business needs” and (ii) take into account a balanced gender representation.And although gender diversity has improved over the years for some countries, we see that for many others there is still a long way to go.

PGGM’s Global Voting Guidelines 2024
PGGM will therefore increase our diversity expectations even further by making balanced gender representation a hard requirement in our voting guidelines going forward.This means that as of 2024, PGGM will vote AGAINST the reelection of the entire nomination committee of our investment companies, if the board consists of less than 30% men or 30% women, unless the company provides an adequate explanation (such as a very recent departure).By voting against their reelection, we hold the nomination committee (which is ultimately responsible for nominating candidates for the board) accountable in case this requirement is not met.In keeping with our Dutch descent approach, this rule will be applicable across all of our listed equity investments around the world.
By increasing our expectations towards companies, we hope to contribute to making company boards more diverse and ultimately more resilient and successful.

PGGM’s Global Voting Guidelines 2024 can be found here.