1. Analysis of shareholders' meetings

As part of their fiduciary duties, investment managers must understand the long-term consequences of the resolutions proposed to shareholders of the companies in which they have invested. During the annual general meeting season, there will be several thousand resolutions to which investment managers will have to respond within very short time frames. Furthermore, when extraordinary general meetings are called, there will be complex financial transactions on which investment managers will have to make a judgement, independently and after due consideration.

For every general meeting, Proxinvest performs an analysis of the company and the resolutions submitted to a vote of the shareholders. This analysis includes a systematic examination of:

• the structure of direct and indirect control of the company,
• the shareholder protection measures provided for in the articles of association (by-laws),

• the details of any contracts that give rise to conflicts of interest,
• the legal and financial impacts of the proposed resolutions,
• the composition, organisation and degree of independence of the governing bodies.

An independent, in-depth analysis of this kind is indispensable for investors to be fully informed and enables them to be more selective and achieve better performance.

2. Voting policy

Effective organisation of proxy voting requires preparation. The various voting criteria and activation thresholds that the investor wishes to apply must be defined beforehand, in line with the investor's management objectives. To this end, Proxinvest has developed an analytical grid in which more than 150 legal and financial criteria can be combined and applied to each proposed resolution. With this customised voting policy – documented, auditable and applied to each holding in the portfolio – the investor is assured of a rigorous, equitable proxy voting procedure.

3. Exercise of voting rights

Proxinvest's Internet proxy voting platform identifies shareholder clients and allows them to generate their votes online with their final decision. For fund management clients, the platform also generates the statistics required by the AMF and provides archive storage of several years' data on their voting decisions. Because the casting of votes is carried out in accordance with all applicable validation rules, investors benefit from a high level of comfort, security, convenience and speed in voting online.

4. Reports

Proxinvest serves as a general meeting research institute, observing and recording the individual characteristics of resolutions and summarising each year's voting results. The annual report on shareholders' meetings is the vehicle for presenting and discussing the voting policies of a cross-section of market participants. This regular review of issues raised at shareholders' meetings, informed by Proxinvest's interviews with investor clients, serves as the basis for the policy adopted by Proxinvest. In parallel with this review, Proxinvest also publishes an annual report on remuneration of officers and directors, likewise reflecting investors' expectations of listed companies.

5. Rating and data transfers

At the request of certain investors, Proxinvest and its partners have developed a service that supplies raw data or assigned ratings in the corporate governance area for listed European companies. On request, Proxinvest also provides advisory services to funds such as Proxy Active Investors Fund, an open-end fund managed by Phitrust Finance that has been at the forefront of shareholder activism for better governance in recent years.

6. Shareholding thresholds

To facilitate tracking and minimise the risk of failing to declare the crossing of a shareholding threshold, Proxinvest provides very large investor clients with various data files on listed companies.

Pierre-Henri Leroy President