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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.
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NB25+: Advanced Vote Disclosure
In the 2020 proxy season, Neuberger Berman is committing to release our intentions in advance of shareholder meetings on over 25 votes on a range of topics across our 9 key governance and engagement principles. visit our engagement and proxy voting site throughout the season to get updates on our progress toward driving change.
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.
Lennar Corporation | NYSE: LEN
Meeting Date: 4/7/2020 NEW VOTE
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 Issues
Companies should consider the material impacts of their business and operations on the environment.
Social Issues
Companies should actively assess the material impacts of their business and operations on their employees, customers, local communities and society.
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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Engagement & 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
In 2019, the number of meetings voted on behalf of our clients is consistent year over year, seeing only a 3% decline from the prior year. We continue to see a steady growth in number of meetings voted in the U.S. (up 8% since 2016) and Japan (up 24% since 2016) driven by efforts to diversify risks across new sectors and market capitalizations as well as reaching into new investing opportunities.


2019 Meetings Voted by Region and Percentage Increase Since 2016


 
Source: Neuberger Berman.

 
Voting statistics

In our consideration of a voting decision, we look to balance the expectation that we set a high bar for board effectiveness while acknowledging the information asymmetry between shareholders and company management. This means that we must, at times, begin with the assumption that management and the board are carrying out their duties faithfully, however it does not mean that we are shy about voicing our concerns through engagement and voting. We feel it is important to reiterate that our public voting policy, and not deference to management, is always our default position.

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. Some of the main areas of opposition involved management compensation and share issuances without a clear case for the dilution.

In 2019, we continued to engage in enhanced dialogues with companies and critically reviewed shareholder resolutions. Improved quality of shareholder resolution enabled engagements to prioritize the most material issues.

Management and Shareholder Proposal Vote Distribution for 2019


 
 
 
Source: Neuberger Berman. Data for the calendar year 2019.

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
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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
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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