Position paper on individual vote count in board elections

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It is the right and responsibility of shareholders to elect and remove the board members. The majority of board elections in most markets are uncontested. Board elections are then generally recognised as an approval process. In the absence of contest, shareholders in most markets have the ability to differentiate votes between candidates. This provides the possibility to withhold votes, or expressly vote against, in case of concerns with individual candidates.

However, in some markets, often for reason of custom rather than law, no individual director vote count is undertaken or published. Accountability of boards to shareholders is dependent on a mechanism in which shareholders can effectively hold board members responsible. That requires a way to withhold votes on individual board members, or express an against-vote. Bundling of all directors into a single resolution deprives shareholders of their right to use their voting rights adequately and effectively in board elections.

The purpose of presenting this position paper is to invite to a discussion on why individual vote count in board elections is important for securing shareholders’ rights to elect the directors individually and to secure these rights regardless of whether  shareholders vote in person at the general meeting or ahead of the meeting through the  proxy voting chain.

In addition to publishing this position paper we will engage with standard setters, our largest portfolio companies and peer investors in the markets where we see bundling continue to be the routine practise.