1. Background
The Trustees of the Travel Automation Services Limited Benefits Scheme (the “Scheme”) are required to produce a yearly statement to set out how, and the extent to which, the Trustees have followed the Scheme’s Statement of Investment Principles (“SIP”) during the previous Scheme year, in relation to engagement and voting behaviour, either by or on behalf of the Trustees, or if a proxy voter was used.
This statement should be read in conjunction with the SIP and has been produced in accordance with The Pension Protection Fund (Pensionable Service) and Occupational Pension Schemes (Investment and Disclosure) (Amendment and Modification) Regulations 2018 and the subsequent amendment in The Occupational Pension Schemes (Investment and Disclosure) (Amendment) Regulations 2019.
A copy of the most recent SIP can be found online at:
https://www.travelport.com/statement-of-investment-principles .
2. Voting and Engagement
The Trustees are keen that their managers are signatories to the UK Stewardship Code, which they are.
All the Trustees’ holdings are within pooled funds and the Trustees have delegated to their investment managers the exercise of voting rights. Therefore, the Trustees are not able to direct how votes are exercised and the Trustees have not used proxy voting services over the year.
The Scheme invested in the following funds over the year:
Blackrock:
- BlackRock BIJF Dynamic Diversified Growth Fund
Insight:
- Insight Broad Opportunities Fund
Legal & General Investment Management (LGIM):
- LGIM All World Equity Index Fund
- LGIM Active Corporate Bond – Over 10 Year Fund
- LGIM Over 15 Year Gilts Index Fund
- LGIM LDI Matching Core Long Fund – Nominal
- LGIM LDI Matching Core Short Fund – Real
- LGIM LDI Matching Core Long Fund – Real
- LGIM Over 5 Year Index-Linked Gilts Index Fund
- LGIM Sterling Liquidity Fund
The underlined funds are predominantly fixed income and do not hold physical equities or were disinvested from over the year and hence there are no voting rights and voting data for the Trustees to report on.
a. Description of Investment Manager’s voting processes
BlackRock
“Proxy voting at BlackRock is centralized within the Investment Stewardship team of over 70 specialists. The team is globally coordinated but regionally focused and based as this allows us to take local market norms into consideration in our voting process. The analysts in each regional team generally take responsibility for specific sectors. They are responsible for voting analysis, voting-related engagement and the vote determination and instruction. In each region, an advisory committee of representatives of different BlackRock investment teams receives periodic reports on voting but it does not determine how to vote.
As a fiduciary to our clients, our firm is built to support the long-term value of assets our clients are invested in. From BlackRock’s perspective, sound management of business-relevant sustainability issues can contribute to a company’s sustainable long-term financial performance. Incorporating these considerations into the investment research, portfolio construction, and stewardship process can enhance long-term risk adjusted returns for our clients.
Voting is the most broad-based form of engagement we have with companies, providing a channel for feedback to the board and management about investor perceptions of their performance and governance practices. BlackRock votes annually at more than 18,000 shareholder meetings, taking a case-by-case approach to the items put to a shareholder vote. Our analysis is informed by our internally developed proxy voting guidelines, our pre-vote engagements, research, and the situational factors at a particular company.
We aim to vote at all shareholder meetings of companies in which our clients are invested. In cases where there are significant obstacles to voting, such as share blocking or requirements for a power of attorney, we will review the resolutions to assess the extent of the restrictions on voting against the potential benefits. We generally prefer to engage with the company in the first instance where we have concerns and give management time to address the issue. We will vote in favour of proposals where we support the approach taken by a company’s management or where we have engaged on matters of concern and anticipate management will address them. BlackRock will not support management proposals where we believe the board or management may not have adequately acted to advance the interests of long-term investors. We ordinarily refrain from abstaining from both management and shareholder proposals, unless abstaining is the valid vote option (in accordance with company by-laws) for not supporting management, there is a lack of disclosure regarding the proposal to be voted, or an abstention is the only way to implement our voting intention. In all situations the economic interests of our clients will be paramount.
Our voting guidelines are intended to help clients and companies understand our thinking on key governance matters. They are the benchmark against which we assess a company’s approach to corporate governance and the items on the agenda to be voted on at the shareholder meeting. We apply our guidelines pragmatically, taking into account a company’s unique circumstances where relevant. We inform voting decisions through research and engage as necessary. We review our voting guidelines annually and update them as necessary to reflect changes in market standards, evolving governance practice and insights gained from engagement over the prior year.
BlackRock voting guidelines:
- Australian securities
- Hong Kong securities
- Asia ex Japan and Hong Kong securities
- Latin America securities (in English and Spanish)
- Canadian securities
- Europe, Middle Eastern and African (EMEA) securities
- US securities
- Chinese securities (in English and Simplified Chinese)
- Japanese securities (in English and Japanese)
Our market-specific voting guidelines are available on our website at https://www.blackrock.com/corporate/about-us/investment-stewardship#Principles-and-guidelines”
Insight
Insight describes their voting process as follows:
“Insight retains the services of Minerva Analytics (Minerva) for the provision of proxy voting services and votes at meetings where it is deemed appropriate and responsible to do so. Minerva provides research expertise and voting tools through sophisticated proprietary IT systems allowing Insight to take and demonstrate responsibility for voting decisions. Independent corporate governance analysis is drawn from thousands of market, national and international legal and best practice provisions from jurisdictions around the world. Independent and impartial research provides advance notice of voting events and rules-based analysis to ensure contentious issues are identified. Minerva Analytics analyses any resolution against Insight-specific voting policy templates which will determine the direction of the vote.” In addition, please refer to our Proxy Voting Policy, which sets out in detail our approaching to voting on resolutions:
b. Summary of voting behaviour over the year
BlackRock
| Summary Info | |
| Manager name | BlackRock |
| Fund name | Dynamic Diversified Growth Fund |
| Approximate value of Trustees’ assets | £6.9M as at 31 March 2024 |
| Number of meetings eligible to vote | 579 |
| Number of resolutions eligible to vote | 7,308 |
| % of resolutions voted | 6,872 votes | 94.03% |
| % of resolutions for votes | 6,239 votes | 85.37% |
| % of resolutions against votes | 433 votes | 5.93% |
| % of resolutions voted with management | 6,518 votes | 89.19% |
| % of resolutions voted against management | 354 votes | 4.84% |
| % of resolutions abstained | 100 votes| 1.37% |
| % of resolutions withheld | 11 votes | 0.15% |
Insight
| Summary Info | |
| Manager name | Insight |
| Fund name | Broad Opportunities Fund |
| Approximate value of Trustees’ assets | £7.5m as at 31 March 2024 |
| Number of equity holdings in the fund | 11 |
| Number of meetings eligible to vote | 12 |
| Number of resolutions eligible to vote | 164 |
| % of resolutions voted | 100% |
| % of resolutions voted with management | 100% |
| % of resolutions voted against management | 0.0% |
| % of resolutions abstained | 0.0% |
| % of resolutions voted, for which at least one vote was against management | 0.0% |
c. Most significant votes over the year
Insight
Insight describes its process for determining the ‘most significant’ votes as follows:
“The strategy invests in listed closed-end investment companies with a focus on cash-generative investments in social and public, renewable energy and economic infrastructure sectors. The corporate structure of closed-end investment companies held in the strategy includes an independent board which is responsible for providing an overall oversight function on behalf of all shareholders. This governance framework includes a range of aspects including setting out investment objectives, and on an ongoing basis ensuring that the underlying strategy and portfolio activities within it remain within the agreed framework. This governance framework, that is with an independent board acting on behalf of shareholders, generally limits contentious issues that can arise with other listed entities and a result the number of significant votes in any given year is lower.”
BlackRock
BlackRock describes its process for determining the ‘most significant’ votes as follows:
“BIS prioritizes its work around themes that we believe will encourage sound governance practices and deliver sustainable long-term financial performance at the companies in which we invest on behalf of our clients. BIS’ year-round engagements with clients to understand their focus areas and expectations, as well as our active participation in market-wide policy debates, help inform these priorities.
The BIS periodically published “Vote Bulletins” on key votes at shareholder meetings to provide insight into details on certain vote decisions we expect will be of particular interest to clients. There bulletins are intended to explain our vote decisions relating to a range of business issues including ESG matters that we consider, based on our global Principles and engagement priorities, potentially material to a company’s sustainable longterm financial performance. Other factors we may consider in deciding to publish a vote bulletin include the profile of the issue in question, the level of interest we expect in the vote decision and the extent of engagement we have had with the company. The bulletins include relevant company-specific background, sector or local market context, and engagement history when applicable. BIS publishes vote bulletins after the shareholder meeting to provide transparency for clients and other stakeholders on our approach to the votes that we consider to be most significant and thus require more detailed explanation. We publish details of other significant votes (including vote rationales, where applicable) quarterly to the BIS website.
Our vote bulletins can be found here https://www.blackrock.com/corporate/about-us/investment-stewardship#engagement-and-voting-history”
d. Most significant votes over the year by Fund
Most Significant votes for BlackRock:
BlackRock – Dynamic Growth Fund
| Company name | Broadcom Inc. | Santos Limited |
| Date of vote | 03 April 2023 | 06 April 2023 |
| Approximate size of fund’s holding as at the date of the vote (as % of portfolio) | BIS does not typically provide this information. We have directed clients to look this information up themselves. | BIS does not typically provide this information. We have directed clients to look this information up themselves. |
| Summary of the resolution | Advisory Vote to Ratify Named Executive Officers’ Compensation | Approve the Amendments to the Company’s Constitution |
| How you voted | Against | Against |
| Where you voted against management, did you communicate your intent to the company ahead of the vote? | We endeavour to communicate to companies when we intend to vote against management, either before or just after casting votes in advance of the shareholder meeting. We publish our voting guidelines to help clients and companies understand our thinking on key governance matters that are commonly put to a shareholder vote. They are the benchmark against which we assess a company’s approach to corporate governance and the items on the agenda to be voted on at the shareholder meeting. We apply our guidelines pragmatically, taking into account a company’s unique circumstances where relevant, Our voting decisions reflect our analysis of company disclosures, third party research and, where relevant, insights from recent and past company engagement and our active investment colleagues. Our market-specific voting guidelines are available on our website at https://www.blackrock.com/corporate/about-us/investment-stewardship#principles-and-guidelines | We endeavour to communicate to companies when we intend to vote against management, either before or just after casting votes in advance of the shareholder meeting. We publish our voting guidelines to help clients and companies understand our thinking on key governance matters that are commonly put to a shareholder vote. They are the benchmark against which we assess a company’s approach to corporate governance and the items on the agenda to be voted on at the shareholder meeting. We apply our guidelines pragmatically, taking into account a company’s unique circumstances where relevant, Our voting decisions reflect our analysis of company disclosures, third party research and, where relevant, insights from recent and past company engagement and our active investment colleagues. Our market-specific voting guidelines are available on our website at https://www.blackrock.com/corporate/about-us/investment-stewardship#principles-and-guidelines |
| Rationale for the voting decision | [SF-M0500-010] Pay is not aligned with performance and peers. | [SF-S0000-009] Shareholder proposals best facilitated through regulatory changes. |
| Outcome of the vote | Fail | 90.4% (Pass) |
| Implications of the outcome e.g. were there any lessons learned and what likely future steps will you take in response to the outcome? | BlackRock’s approach to corporate governance and stewardship is explained in our Global Principles. Our Global Principles describe our philosophy on stewardship, including how we monitor and engage with companies. These high-level principles are the framework for our more detailed, market-specific voting guidelines. We do not see engagement as one conversation. We have ongoing direct dialogue with companies to explain our views and how we evaluate their actions on relevant ESG issues over time. Where we have concerns that are not addressed by these conversations, we may vote against management for their action or inaction. Where concerns are raised either through voting or during engagement, we monitor developments and assess whether the company has addressed our concerns. | BlackRock’s approach to corporate governance and stewardship is explained in our Global Principles. Our Global Principles describe our philosophy on stewardship, including how we monitor and engage with companies. These high-level principles are the framework for our more detailed, market-specific voting guidelines. We do not see engagement as one conversation. We have ongoing direct dialogue with companies to explain our views and how we evaluate their actions on relevant ESG issues over time. Where we have concerns that are not addressed by these conversations, we may vote against management for their action or inaction. Where concerns are raised either through voting or during engagement, we monitor developments and assess whether the company has addressed our concerns. |
| On which criteria (as explained in the cover email) have you assessed this vote to be “most significant”? | Vote Bulletin; BIS periodically publishes Vote Bulletins on key votes at shareholder meetings to provide insight into details on certain vote decisions we expect will be of particular interest to clients. Our vote bulletins can be found here: https://www.blackrock.com/corporate/about-us/investment-stewardship#vote-bulletins | Vote Bulletin; BIS periodically publishes Vote Bulletins on key votes at shareholder meetings to provide insight into details on certain vote decisions we expect will be of particular interest to clients. Our vote bulletins can be found here: https://www.blackrock.com/corporate/about-us/investment-stewardship#vote-bulletins |
Most Significant Votes for Insight
Insight – Broad Opportunities Fund
| Company Name | Ecofin US Renewables Infrastructure Trust plc | Aquila European Renewables Income Fund plc |
| Date of vote | 25/05/2023 | 05/06/2023 |
| Approximate size of fund’s holding as at the date of the vote (as % of portfolio) | 0.2% | 0.6% |
| Summary of the resolution | Resolution 4: To re-elect as a director, Patrick O’Donnell Bourke | Resolution 4: To approve the continuation of the Company as an investment trust |
| How you voted | For | For |
| Where you voted against management, did you communicate your intent to the company ahead of the vote? | n/a | n/a |
| Rationale for the voting decision | All board members stand for annual re-election at each AGM. Any potential change to the board could have added further uncertainty during an already volatile period and may not have been in the best interest of the shareholders. | Over the course of 2023, the company introduced a number of initiatives including asset life extensions, in some instances which contributed to increase in NAV per share; accretive share buybacks; debt refinancing which would enable further investment and/or return additional capital to shareholders and additional listing on a European exchange which could improve the company’s marketability and liquidity on the secondary market. We voted in favour of the resolution for a continuation of the company as this would allow time to evaluate the success of initiatives outlined above. Shareholders will have a further opportunity to vote on the continuation of the company in Q3 2024 which has been brought forward from 2027. |
| Outcome of the vote | Passed with over 87% of votes in favour | Passed |
| Implications of the outcome eg were there any lessons learned and what likely future steps will you take in response to the outcome? | The board is cognisant of the lack of ethnic diversity and is mindful of the AIC Code alongside the Hampton-Alexander and Parker Reviews. The 2022 Annual Report indicated that the board will endeavour to address this in future recruitment whilst ensuring appointments are made on merit and are subject to a formal, rigorous and transparent procedure. The board announced a review of the company’s strategy in September 2023 focussing on the sale company’s assets in order to maximise value for shareholders. At this stage, no further action is proposed pending the outcome of this strategic review. https://www.londonstockexchange.com/news-article/RNEW/strategic-review/16115810 | We note that 25.9% voted against this proposal and that the company has continued to engage with shareholders to allay their concerns. We continue to evaluate the effectiveness of initiatives and reassess this proposal at the next opportunity in Q3 2024. |
| On which criteria (as explained in the cover email) have you assessed this vote to be “most significant”? | In assessing our voting decision, we noted that votes were cast against proposal 5 (re-election of Patrick O’Donnell Bourke) at the previous AGM. We understand that this was predominantly from one shareholder due to board composition. https://www.londonstockexchange.com/news-article/RNEW/result-of-agm/15507645 The 2022 Annual Report acknowledged that the board’s composition did not meet one of the FCA’s new targets, namely that one individual on the board should be from a minority ethnic background. While the company recognises the benefits of greater diversity on the board, we agreed with the company’s assessment that in view of the portfolio size and potential increase to cost base, increasing the board’s size would not be appropriate at the present time. We voted in favour of re-election resolution as we consider the board has the skillset and experience appropriate to fulfil their governance obligations. | The company’s articles of association require that the directors propose an ordinary resolution at the AGM to be held in 2023, and every fourth AGM thereafter, that the company continue its business as a closed-ended investment company for a further four-year period. In the event that the resolution does not pass, the directors are required to draw up proposals for the reconstruction, reorganisation or liquidation of the company for consideration by shareholders at a general meeting to be convened within a six-month period. |