As a major investor, OPTrust actively supports efforts to promote high standards of corporate governance. In 1997, the Trustees adopted OPTrust’s first set of Proxy Voting Guidelines which committed us to actively voting the Plan’s shares in the interests of ensuring effective governance of companies in which we invest. Since then we have worked independently and with other investors to promote best practices in corporate governance. We are also working to integrate environmental, social and governance (ESG) issues throughout our investment activities, recognizing that these factors may affect the long-term performance of our portfolios.
Proxy voting
As part of our efforts to ensure good corporate governance practices at the companies in which we invest, OPTrust actively exercises our shareholder voting rights. Stock ownership rights are financial assets that must be managed with the same care and diligence as any other asset. The Plan’s shares are voted according to OPTrust's detailed Proxy Voting Guidelines approved by the Trustees. These guidelines address key governance issues such as the composition of boards of directors, executive compensation, shareholder rights, and mergers and acquisitions. They also address a range of social and environmental concerns such as labour rights and climate change.
OPTrust uses an external proxy voting service provider to research and vote our proxies according to our guidelines. OPTrust staff work closely with the voting fiduciary and monitor our voting record to ensure that the guidelines are applied consistently. When issues arise that fall outside the guidelines, they are referred to OPTrust for a decision on how to vote our shares.
Environmental, social and governance issues
OPTrust recognizes that environmental, social and governance issues have the potential to affect the performance of the Plan’s investment portfolios. In 2007, the Trustees approved changes to the Plan’s Statement of Investment Policies and Procedures identifying ESG concerns as factors to be considered in the Plan’s investment activities.
Since then, we have worked with our external investment managers to identify how ESG criteria are integrated into their investment decisions and added these criteria to our regular investment management monitoring processes. We have also included ESG criteria as part of an ongoing review of the policies governing our internally managed real estate, infrastructure and private equity investment programs.
As part of our commitment to promoting sound corporate governance, OPTrust participates as an active member in several organizations that carry out research and advocacy in this area. These organizations include:
|
