Vanguard updated its proxy voting policies related to board diversity, director commitments, and ESG oversight for Australia- and New Zealand-listed companies.

Director elections

As of September 2022, Vanguard will generally vote against nominating committee chairs or other relevant board members where ASX 300 companies feature less than 30% of either gender on the board.

The fund manager will vote against directors who hold an executive role at any company and serve on two or more additional outside public boards. In this instance, Vanguard will typically vote against the nominee at each company where they serve as a non-executive director, but not at the company where they serve as an executive, it said.

Directors who serve on five or more public boards will also be opposed, with Vanguard voting against the director at each of these companies except the one where they serve as chair or lead independent director.

Vanguard may support the reelection of an overboarded director if they have committed to step down from any directorships or if the company can provide “specific, verifiable information” confirming that the director devotes “significantly less than an average amount of time” to one or more of the boards on which they sit.

Environmental and social proposals

Shareholder proposals that are more prescriptive in nature will generally not be supported by the fund manager, it said.

Vanguard is likely to support shareholder proposals that “address a shortcoming” in the company’s current ESG disclosures relative to market norms or widely accepted frameworks, reflect a materiality-driven approach, and are not overly prescriptive about time frame, cost, or other matters.

Oversight failure

If a situation arises where the board has failed to effectively identify, monitor, and ensure management of material risks, Vanguard will generally vote against the relevant committee chair.

When assessing climate-related risks, the fund manager will consider the materiality of the risk, the effectiveness of company disclosures to enable the market to price the risk, and whether the company has disclosed “reasonable” risk mitigation plans.

Vanguard’s proxy voting policy can be accessed on its profile.