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ENVIRONMENTAL, SOCIAL AND GOVERNANCE INVESTING

Engagement and Proxy Voting

GOVERNANCE AND ENGAGEMENT PRINCIPLES
Neuberger Berman believes that engagement is a dialogue between investors and companies focused on positively influencing corporate behaviors to drive long-term, sustainable returns for our clients. As a multi-asset class manager we engage with issuers across the capital structure using a range of tools and approaches guided by our Governance and Engagement Principles.
Strategy
Companies should adopt, formulate, and communicate value-enhancing long-term strategies.
Incentives
Companies should align management and board incentives with long-term shareholder goals.
Board Independence
Effective boards of directors must be truly independent.
Shareholder Representation
Companies should strive to maximize shareholder representation.
Capital Deployment
Companies should allocate capital to maximize long-term risk-adjusted shareholder value.
Transparency and Communications
Companies should provide transparency in communication and reporting.
Risk Management
Boards of directors should actively engage with management to evaluate and control enterprise risk.
Environmental/Social Issues
Companies should consider the long-term impact of their business model and operations.
Download our Governance and Engagement Principles
ESG ANNUAL REPORT
Our 2018 Inaugural Report
Learn more about our commitment to ESG integration including recent innovations and insights.
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FIXED INCOME ENGAGEMENT REPORT
Engaging Fixed Income Issuers on ESG Topics
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Proxy Voting

One important way in which we exercise engagement is voting proxies on behalf of our clients for whom we have voting authority. We do this in order to fulfill our fiduciary responsibility to protect our clients’ best interests and as an important component of our approach to creating shareholder value. Our Governance and Proxy Committee oversees our Proxy Voting Policy and proxy voting process and ensures no conflicts of interest. We have provided guidelines, procedures and records to emphasize our transparency in proxy voting to clients.

Meetings voted
As in prior years, a steady growth in the number of meetings voted on behalf of our clients has continued. Further diversified developed markets and new strategies in the international space contributed to this growth, which was distributed across all regions. The year 2018 marks the first time that a majority of the meetings voted were not North American.


2018 Meetings Voted by Region and Percentage Increase Since 2017


 
Source: Neuberger Berman.

 
Voting statistics

When considering proxy votes, we acknowledge the information asymmetry between shareholders and insiders, and begin with the assumption that management and the board are carrying out their duties faithfully. That does not mean however, that we are shy about voicing our concerns through engagement and voting. We find ourselves opposing many proposals that are either unclear in their alignment with shareholder interests or at odds with our judgment of the best course for the company. This is reflected in both the 89% of management proposals that we supported in the last year and the 11% we opposed.1 Some of the main areas of opposition involved management compensation and share issuance.

In 2018, we significantly increased our support for shareholder resolutions, of which we voted for a majority (52%) for the first time. Our support reflects increasingly narrow and carefully-worded proposals that make reasonable requests on issues material to shareholders. In the past, more resolutions tended to represent special interests or social activism. We think the improved quality of shareholder resolutions is being shaped by the SEC submission process and by greater collaboration with investors.


 
1Data for the calendar year 2018.

Management and Shareholder Proposal Vote Distribution for 2018


 
 
 
Source: Neuberger Berman. Data for the calendar year 2018.

Stewardship
 
Our commitment to engagement and good governance extends across our investment platform.

We are signatories and active supporters of stewardship codes across multiple geographies:
 
 

U.S. Investor Stewardship Group
Neuberger Berman is a signatory to the Investor Stewardship Group (ISG), a collective of some of the largest U.S.-based institutional investors and global asset managers, along with several of their international counterparts. The ISG was formed to bring all types of investors together to establish a framework of basic standards of investment stewardship and corporate governance for U.S. institutional investor and boardroom conduct. www.isgframework.org
UK Stewardship Code
Neuberger Berman subscribes to and is a signatory of the UK Stewardship Code published by FRC. We believe that good stewardship and responsible investment will provide our clients with better long term investment performance, thus enhancing the value that accrues to the ultimate beneficiary. www.frc.org.uk
VIEW OUR STATEMENT
 
Japan Stewardship Code
Neuberger Berman welcomed and accepted the Principles for Responsible Institutional Investors “Japan’s Stewardship Code” in 2011. We continue to support the work of the Japan FSA to promote sustainable growth through dialogue between investors and management. www.fsa.go.jp
VIEW OUR STATEMENT
EU Shareholder Rights Directive
Neuberger Berman is reviewing the Shareholder Rights Directive ((EU) 2017/828) under the FCA’s policy statement PS19/13 and will provide an update if any changes are required in relation to existing policies regarding shareholder engagement already in place.
ESG INVESTING
Industry Collaboration and Leadership
We work with like-minded institutions to advance the integration of environmental, social and governance factors across markets.
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