Purpose

This document sets out the standards that Renaissance Property Securities Pty Ltd (RPS) uses to manage the proxy voting process.  This Policy covers the proxy voting of RPS portfolios holding publicly listed equities.

This document is consistent with the Financial Services Council’s Standard 13 (Voting Policy, Voting Record and Disclosure). The Policy has been approved by the Board of Renaissance Property Securities Pty Ltd.

Scope

The guiding principle of this Policy is that voting rights should be exercised and proxy votes should be cast in a way designed to ensure that proxies are voted in the best interests of clients.

This policy applies to all RPS’ portfolios. RPS recognises clients’ internal proxy voting policies and will work with them to implement their policies. RPS will only vote for a client’s portfolio where it has been provided with the discretion to direct such voting rights on the client’s behalf.

RPS recognises the link between good corporate governance and investment value. Our objective is to increase the return on funds invested. RPS believes that by adopting high standards in relation to corporate governance and social responsibility (environmental, employment and community relationships) companies can avoid potential damage to trade or reputation and therefore enhance and protect returns to the shareholders.

Policy

RPS is committed to exercising the rights of shareholders via active voting and engagement. RPS policy is to vote in a manner that maximises shareholder value while observing the principles of good corporate governance. Corporate governance and the exercise of voting power are considered to be part of the investment management process. Corporate governance is concerned with the way in which trusts are directed and controlled.

To assist in decision making, RPS may conduct research internally and/or use the resources of independent external proxy advisory services such as ISS RiskMetrics.

It is RPS’ duty, as an investment manager to ensure that our clients’ right to vote is exercised, especially on material issues (taking account of the size of the holding as a proportion of the issued capital of the particular stock). There may be exceptional circumstances where RPS believes it is in the best interests of our clients to vote in a manner different to that outlined above or abstain from voting.

RPS will not become involved in day-to-day trust management issues, but recognises that it can influence trust policy on matters of corporate governance by virtue of shareholdings under our management, and within industry practices and guidelines, use that influence to benefit its clients.  To this end, RPS will engage with trusts in which it invests or seeks to invest in order to promote effective corporate governance within those trusts. RPS does not engage third parties to represent its views but prefers to undertake engagement directly.

Contentious issues typically arise where there are potential misalignments of interests between trust management, the directors and shareholders. Such issues include:

• any issue where there is a likelihood of RPS voting against a Board sponsored resolution
• any issue where there is a likelihood of RPS voting against a current Director standing for re-election
• any issue involving a resolution not in line with the corporate governance principles as outlined above
• any issue that leads RPS to propose or jointly propose a resolution at a shareholder meeting
• any other issue or resolutions which RPS believes is contentious taking into account industry conventions, laws and media coverage

Voting decisions are made on a case by case basis by an assessment of the matter at hand and after taking into consideration the likely effect on the performance of RPS’ funds. The voting decision is made in adherence with this policy by the RPS Analyst/Portfolio Manager responsible for coverage of the specific trust. Where necessary, as is the case for contentious issues, this decision is reviewed by RPS team members, RPS directors, and/or the RPS compliance committee. Contentious issues are also discussed with clients prior to voting as required.

Conflicts

RPS acknowledges that conflicts of interest do arise in business, however it believes that, where possible, they should be minimised. RPS believes that conflicts of interest are best handled, firstly by disclosure and, secondly, through an external independent arbiter if required. A separate Conflicts of Interests manual is maintained by RPS to ensure that all relevant employees are aware of, and understand this policy.

ESG

Environmental, social and corporate governance, also known as ESG, collectively describe the main areas of concern that have developed as the central factors in measuring the sustainability and ethical impact of an investment in a company or business.  Within these three areas are a broad set of concerns that are increasingly being included in the non-financial factors that figure in the valuation of equity, real estate, corporations and all fixed-income investments.

RPS believes that awareness in environmental, social and corporate governance (ESG) is an aspect of share ownership and that as a professional investment Manager, RPS has a responsibility to act in this regard with the best interests of its clients in mind.  RPS believes that good governance and sustainable practices are more likely to generate better long-term returns. RPS’s primary responsibility to clients is to maximise their investment returns and we consider ESG issues to play a role in our investment decision making process.

Review

This Policy will be reviewed and approved annually by the Renaissance Property Securities Pty Ltd Board.