Magni votes company proxies on behalf of clients and is guided in its votes by applying corporate governance best practices as described in Magni’s Sustainable Value Creation principles.
When Magni is voting a proxy, it means that one or more Magni clients have the associated security in an account. These accounts use a Magni Corporate Governance strategy so that the resulting portfolio contains the best governed companies, according to Magni research. Hence, the companies are already well run, and Magni is inclined to vote for proforma proposals. Each Magni vote on a company proxy is documented in a post published on Magni’s proxy blog.
No company is perfect, and all companies have opportunities for improvement. If the improvement areas overlap with a proposal, then Magni may vote against the board recommendation.
Some companies have supermajority provisions within the governance documents. These provisions are often methods for preventing hostile efforts by shareholders, including acquisition of significant equity provisions by undesired investors, alternative slates of director candidates, and unwelcome acquisition efforts. In the 1980s supermajority provisions became more common. These provisions may have been effective in some situations. At the same time, the provisions place a barrier between shareholders and company leadership as the will of the shareholders can be thwarted. If the board and leadership team build good relationships with the shareholders, the risk of hostile efforts being successful is much lower. The alternative to supermajority provisions is simple majority voting. If 50% plus 1 share vote for an idea, the shareholders can make changes.
Magni votes for board or shareholder proposals to change corporate governance by-laws to simple majority. Magni prefers a simple majority of outstanding shares, though Magni accepts a simple majority of shares voting. If Magni votes against any of these proposals, the decision along with the explanation is documented in the blog post.