Norges Bank Investment Management (NBIM), which is responsible for the investments of the Government Pension Fund Global (GPFG), has made several proposals that would increase the transparency and accountability of shareholder voting.

The proposals are part of its response to the European Commission’s final report of the High-Level Forum on a capital markets union. Specifically, it is responding to the chapter of the report on shareholder identification, exercise of voting rights and corporate actions. NBIM supports the development of international standards that promote “well-functioning markets and facilitate cross-border investments”.

The High-Level Forum’s report recommended a revision to the Shareholder Rights Directive, in order to address issues of manual processes, lack of standardisation and fragmentation in the single market.

Although NBIM supports the right to receive confirmation from issuers that resolutions have been voted in line with its instructions, it believes that this should be automatic and not solely on request. It believes this would increase transparency and accountability.

It also suggests introducing a common approach regarding the deadline to cast votes. NBIM said that in some member states, the cut-off date is too early and does not allow investors to make voting decisions based on the most recent information available.

“Investors also need adequate time between the receipt of the meeting’s materials and the deadline to cast vote (15 days at least). This time is necessary to study the materials and make an informed decision ahead of the cut-off date,” the response stated.

In addition, NBIM said votes should be counted systematically; the vote tally should be published; and there should be transparency on voting outcome per agenda item. It believes this is key to ensure the integrity and transparency of the voting process and encourage shareholders to vote. This is not currently the case in all member states.

In order to facilitate cross-border voting, NBIM thinks there needs to be a straightforward administrative process regarding the power of attorney, which allows the custodian to vote on the investor’s behalf without unnecessary delays or hurdles.

“Furthermore, the electronic tabulation of votes should always be permitted, rather than requiring physical attendance. Overall, we believe the voting process should be fully electronic. This would reduce operational risks and be less time consuming for all stakeholders in the voting chain,” it stated.

Finally, NBIM said that it would be helpful to have common definitions in EU legislation for concepts like record date or shareholder. This is because different definitions can lead to legislative fragmentation.

“Also, a common definition of ‘shareholder’ may facilitate shareowner identification, shedding light on the end investors, rather than intermediaries holding the shares on their behalf.”

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