The policy on proxy voting applies to the invested assets of University of Wisconsin System Trust Funds.
The purpose of this policy is to describe who is responsible for identifying, analyzing, and voting various types of shareholder proxies, proposals put to shareholder vote which may impact the future and fortunes of the companies in which University of Wisconsin System Trust Funds are invested.
The general policy of the UW System Board of Regents is to ensure that the voting of proxies is conducted in a diligent manner that reflects the Board’s stewardship and fiduciary responsibilities. To this end, the following guidelines are to be adhered to:
1. Shareholder proxies dealing with “routine” corporate governance and management issues or other issues of a predominately financial or shareholder value/rights nature are generally to be voted by the investment managers, in accordance with each manager’s proxy voting guidelines. “Routine” issues generally include such items as the following:
- election of directors;
- election of auditors;
- elimination of preemptive rights;
- amendments to corporate charters or bylaws which might materially affect shareholder rights;
- management recommendations regarding adding or amending indemnification provisions in charters or bylaws;
- authorization to issue common stock under option and incentive plans under most circumstances;
- issuance of additional shares of stock for corporate purposes under most circumstances (e.g., not for expressly preventing a takeover);
- acquisitions and mergers;
- changes to the Board of Directors, proposals relating to cumulative voting, annual election of directors, and staggered Boards; and
- outside director compensation (cash plus stock plans).
2. Shareholder proxies dealing with some aspect of “social responsibility” are generally to be voted (or directed to be voted) internally by the UW System Trust or Assistant Trust Officer(s) in accordance with the following general guidelines:
A. Disclosures Overall
1. UW System will generally support resolutions calling for disclosure of additional information pertaining to a particular issue involving potential social impacts if:
a. The requested information is believed to be of value to a majority of shareholders when evaluating the company or its managers.
b. The costs of disclosure are reasonable.
c. The requested information will not disadvantage the company competitively or economically.
B. Labor and Human Rights
1. UW System will generally support management if the company’s position:
a. Is not detrimental to the long-term viability of the company or shareholder value.
b. Reflects society’s values and attitudes on labor and human rights.
C. Health and Safety
1. UW System will review and analyze health and safety proposals from an economic and social perspective on a case-by-case basis based on the following:
a. The effect the resolution may have on long-term shareholder value.
b. The company’s competitiveness and sustainability if the resolution addresses a specific state or federal law.
c. The extent to which the resolution reflects society’s values and attitudes on health and safety for employees and consumers.
D. Environmental Practices and Animal Welfare
1. UW System will generally support increased environmental reporting if:
a. The company’s product or service has the potential to affect the environment adversely.
b. The company has been the subject of adverse publicity or litigation because of its environmental practices.
c. The company has failed to provide adequate information, as determined by UW System staff, about its environmental practices to shareholders.
2. UW System may support proposals requesting disclosure reports of operations, risks, environmental impacts, fines, litigation and policies as it relates to fracking and flaring and other environmental concerns.
3. UW System may support proposals requesting increased disclosure on the treatment of animals in the company’s operations and its efforts to provide for more humane treatment.
E. Climate Change
1. UW System may support proposals requesting disclosure regarding operations, decision making, liabilities, and use of resources as they relate to climate change.
1. UW System may support proposals requesting disclosure regarding operations, decision making, liabilities, and use of resources as they relate to sustainability.
G. Diversity and Non-Discrimination
1. UW System may support proposals requesting the company to diversify its board.
2. UW System will generally support proposals requesting disclosure reports on diversity and non-discrimination programs and policies.
3. UW System will generally support proposals calling for the adoption of a sexual orientation non-discrimination policy.
H. Political Expenditures
1. UW System may support disclosure of the total amount a company budgets and/or spends on the various types of political expenditures.
2. UW System will generally support political expenditure proposals if:
a. Current disclosure on political contributions is insufficient or significantly lacking compared to its peers.
b. There are verifiable or creditable allegations of funds mismanagement through donations.
c. There is no explicit board oversight or evidence that board oversight on political expenditures is adequate.
I. Cyber Security
1. UW System may support proposals requesting greater disclosure of a company’s policies, potential risks, and oversight as these relate to cyber security.
Oversight, Roles, and Responsibilities
The Board of Regents is responsible for the regular review and update of the guidelines provided within this policy for the voting of proxy proposals dealing with some aspect of social responsibility. The Board may request reporting of the proxy voting results. UW System Trust Funds is responsible for identifying and analyzing these types of proxy proposals, and voting or directing the voting of the proxies in accordance with these guidelines.
Related Regent Policies and Applicable Laws
RPD 31-13, Social Responsibility Investment Considerations
History: Res. 6086, adopted 04/10/1992, created Regent Policy Document 92-4; Res. 8534, adopted 04/05/2002, amended Regent Policy Document 92-4; subsequently renumbered 31-10; Res. 10121, adopted 10/05/2012, amended Regent Policy Document 31-10; Res. 10602, adopted 12/11/2015, amended Regent Policy Document 31-10.