Detail needed when proxy voting differs to advice

Superannuation fund trustees should provide further proxy voting details to members when voting actions are inconsistent with proxy advice, according to Super Consumers Australia.  

In its submission to Treasury on proxy advice transparency, Super Consumers Australia said it did not support proposals that would only disclose the proxy advice received by trustees. 

“This is because in addition to the advice provided by proxy advisers, superannuation funds also take into account a multitude of other factors in making decisions. Any proposal which only divulges the proxy advice may be misleading. For example, a fund will have internal teams, other advisers and other metrics that are considered,” it said. 

“At the same time, requiring a superannuation fund to disclose all of these considerations, of which there may be tens of thousands, may be costly and onerous. 

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“The most important aspect of disclosure is relevant to detailing the trustees objectives, how they relate to best interests of their members and how they voted to achieve this.” 

The submission also said super funds should be encouraged to provide context for controversial or significant decisions that impacted the sustainability and societal impact of the company and should point to evidence of voting practices that supported the position they had taken. 

“For example, the use of an ESG decision framework which details how a fund has determined an environmental concern and how it relates to the best interests of members,” the submission said. 

“In scenarios where the voting actions taken were inconsistent with proxy advice, it may require trustees to detail further information for members.”