to the UK Stewardship Code
The UK Financial Reporting Council's (FRC) Stewardship Code (the "Code") aims to enhance the quality of engagement between institutional investors and companies to help improve long-term risk adjusted returns to shareholders and the effective exercise of governance responsibilities. It sets out good practice on engagement with investee companies to be applied by firms on a "comply or explain" basis. The Code is directed at institutional investors with equity holdings in UK listed companies. The FRC recognises that not all parts of the Code will be relevant to all institutional investors and that smaller institutions may judge some of the principles and guidance to be disproportionate. Aberdeen Standard Capital (ASC) does not formally commit to the Code due to the nature of its business primarily being retail based. However as outlined below ASC does take stewardship seriously and complies in many material respects with the principles set out in the FRC Code.
Further, Financial Conduct Authority (FCA) rules beginning 10 June 2019 outline similar requirements on firms to disclose an "Engagement Policy" on interactions with investee companies or alternatively explain why have they have chosen not to produce one.
Similar to the FRC Code, ASC does not have a formal Engagement Policy, however it does comply in many material respects with the concepts and principles set out in the FCA rules.
ASC's ability to directly influence companies on a standalone basis is limited since generally the portion of shares held in a company is lower than those held by major institutions. However, ASC's clients benefit from the significant insight and activities of Aberdeen Standard Investments (ASI). ASI has embedded stewardship principles for over 25 years and is considered a leader in the field. Through ASI, ASC has access to company management on a global basis, providing ASC with unrivalled insight.
Stewardship and investee engagement principles are at the heart of everything ASC does. This includes consideration of environmental, social and governance principles which is embedded in our investment process.
ASC does not currently undertake securities lending activities.
ASC always acts in clients best interests and do not favour any client/group of clients over any other client/group of clients and this includes any conflicts arising from engagement activities. For the types of conflicts that may arise in relation to engagement activities, please see ASI’s Stewardship Code (link below). For details on how ASC and ASI manage conflicts, please see ASI’s Conflict of Interest Policy (link below).
ASC votes on its clients' investments. Voting outcomes are based on the principles of good governance and stewardship. ASC appoints Institutional Shareholder Services (ISS) to vote on behalf of ASC. Broadly, ASC will vote in line with ASI stewardship voting although occasionally ASC will vote differently, but always in line with agreed good governance standards. For more information please click here and read the Proxy voting record below.