| Overall Rating | Bronze |
|---|---|
| Overall Score | 43.58 |
| Liaison | Christopher Homeister |
| Submission Date | Oct. 30, 2023 |
Salisbury University
PA-9: Committee on Investor Responsibility
| Status | Score | Responsible Party |
|---|---|---|
|
1.00 / 2.00 |
Christopher
Homeister Director of Campus Sustainability Campus Sustainability |
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indicates that no data was submitted for this field
Does the institution have a formally established and active committee on investor responsibility (CIR) or equivalent body?:
Yes
The charter or mission statement of the CIR or other body which reflects social and environmental concerns or a brief description of how the CIR is tasked to address social and environmental concerns:
The Board of Trustees (the Board) of each Vanguard fund is responsible for fiduciary oversight of the fund, fund corporate governance, proxy votes, and adopting proxy voting guidelines. For this purpose, the Board has tasked the Investment Stewardship Oversight Committee (the Committee) with oversight of the proxy voting and stewardship function for the firm’s internally managed global equity funds, and it has delegated the day-to-day operations of these funds’ proxy voting process to the Investment Stewardship team. In 2019, the Board delegated full proxy voting responsibility for Vanguard’s externally managed funds to the external managers of those funds. This created a greater alignment of investment management and investment stewardship on a fund-by-fund basis.
The Investment Stewardship Oversight Committee comprises a senior management group led by Vanguard Chairman and CEO Tim Buckley. The group includes senior executives from investment management, global risk, legal, compliance, investment products, finance, communications, the head of Vanguard’s U.K. and European businesses, and investment stewardship, including John Galloway as the global head of Investment Stewardship. The Committee is accountable to the board of each fund.
The Committee is deliberately structured to be a multidisciplinary team—one that reflects diversity of gender, ethnicity, skill, and experience—so that it can make better decisions around policy, strategy, and risk oversight. It does not include anyone whose primary duties include external client relationship management or sales. This clear separation between oversight of proxy voting and client relationship functions is intended to eliminate any potential conflict of interest in the proxy voting process.
The Committee meets at least quarterly and provides ongoing oversight, guidance, and strategic vision both by approving governance policy to be presented to the Board and by advising the Investment Stewardship team on proxy voting decisions for complex, high-impact, and/or controversial matters.
Vanguard’s mission is to give investors the best chance for investment success. We believe responsible investment is consistent with our fiduciary duty to manage investments in the best interest of clients. Our policy and approach to responsible investment is outlined below.
Passive equity
Index funds have revolutionized investing by providing millions of investors with broad market exposure at a very low cost. They predominantly track benchmarks constructed without consideration of ESG criteria. Because ESG risks can undermine returns over the long run and our index funds are essentially permanent owners of the companies in which they invest, Vanguard’s Investment Stewardship team votes proxies, engages with company directors and executives, and advocates for market-wide adoption of governance best practices to address these material risks. Although we want companies to mitigate material risks, we do not dictate strategy.
Active fixed income
ESG risk is one element of Vanguard Fixed Income Group’s bottom-up financial analysis for potential investments. The team quantifies the financial materiality of ESG risk and assesses whether a security’s current valuation properly reflects that risk.
Active equity
The majority of Vanguard’s active equity funds are managed by external firms. This approach provides us with diversity of thought and broader access to top talent. Each firm has its own philosophy and process, and many consider ESG factors when selecting securities.
Vanguard’s Oversight and Manager Search team is responsible for monitoring the external managers’ performance. As part of that oversight, the team reviews the external managers’ sustainability and ESG risk practices. By allowing the managers to vote their own proxies, Vanguard enables our managers to integrate their own analysis and direct engagement with portfolio companies into their investment strategies.
ESG products
Some investors simply don’t want exposure to ESG risks or want to avoid companies that don’t align with their values. Vanguard currently offers more than a dozen exclusionary (or negatively screened) equity and fixed income ESG products across the globe. These products use transparent exclusion measures to remove certain companies from their investment universe based on predetermined ESG screening criteria.
Please see the following link for more information about sustainability at Vanguard:
https://corporate.vanguard.com/content/corporatesite/us/en/corp/who-we-are/we-care-about/sustainability.html
The Investment Stewardship Oversight Committee comprises a senior management group led by Vanguard Chairman and CEO Tim Buckley. The group includes senior executives from investment management, global risk, legal, compliance, investment products, finance, communications, the head of Vanguard’s U.K. and European businesses, and investment stewardship, including John Galloway as the global head of Investment Stewardship. The Committee is accountable to the board of each fund.
The Committee is deliberately structured to be a multidisciplinary team—one that reflects diversity of gender, ethnicity, skill, and experience—so that it can make better decisions around policy, strategy, and risk oversight. It does not include anyone whose primary duties include external client relationship management or sales. This clear separation between oversight of proxy voting and client relationship functions is intended to eliminate any potential conflict of interest in the proxy voting process.
The Committee meets at least quarterly and provides ongoing oversight, guidance, and strategic vision both by approving governance policy to be presented to the Board and by advising the Investment Stewardship team on proxy voting decisions for complex, high-impact, and/or controversial matters.
Vanguard’s mission is to give investors the best chance for investment success. We believe responsible investment is consistent with our fiduciary duty to manage investments in the best interest of clients. Our policy and approach to responsible investment is outlined below.
Passive equity
Index funds have revolutionized investing by providing millions of investors with broad market exposure at a very low cost. They predominantly track benchmarks constructed without consideration of ESG criteria. Because ESG risks can undermine returns over the long run and our index funds are essentially permanent owners of the companies in which they invest, Vanguard’s Investment Stewardship team votes proxies, engages with company directors and executives, and advocates for market-wide adoption of governance best practices to address these material risks. Although we want companies to mitigate material risks, we do not dictate strategy.
Active fixed income
ESG risk is one element of Vanguard Fixed Income Group’s bottom-up financial analysis for potential investments. The team quantifies the financial materiality of ESG risk and assesses whether a security’s current valuation properly reflects that risk.
Active equity
The majority of Vanguard’s active equity funds are managed by external firms. This approach provides us with diversity of thought and broader access to top talent. Each firm has its own philosophy and process, and many consider ESG factors when selecting securities.
Vanguard’s Oversight and Manager Search team is responsible for monitoring the external managers’ performance. As part of that oversight, the team reviews the external managers’ sustainability and ESG risk practices. By allowing the managers to vote their own proxies, Vanguard enables our managers to integrate their own analysis and direct engagement with portfolio companies into their investment strategies.
ESG products
Some investors simply don’t want exposure to ESG risks or want to avoid companies that don’t align with their values. Vanguard currently offers more than a dozen exclusionary (or negatively screened) equity and fixed income ESG products across the globe. These products use transparent exclusion measures to remove certain companies from their investment universe based on predetermined ESG screening criteria.
Please see the following link for more information about sustainability at Vanguard:
https://corporate.vanguard.com/content/corporatesite/us/en/corp/who-we-are/we-care-about/sustainability.html
Does the CIR include academic staff representation?:
Yes
Does the CIR include non-academic staff representation?:
Yes
Does the CIR include student representation?:
No
Members of the CIR, including affiliations and role:
Tim Buckley - chairman and chief executive officer of Vanguard
Matthew Benchener - managing director of Vanguard Personal Investor
Joseph Brennan - managing director and Vanguard's global chief risk officer
Greg Davis - managing director and Vanguard's chief investment officer
John James - managing director of Vanguard's Institutional Investor Group
Chris McIsaac - managing director of Vanguard's International division
Thomas Rampulla - managing director of Vanguard's Financial Advisor Services division
Karin Risi - managing director of Vanguard’s Strategy, Product, Marketing and Communications division
Anne Robinson - general counsel of The Vanguard Group, Inc., and secretary of the Vanguard funds
Michael Rollings - chief financial officer and managing director of Vanguard's Finance division
Nitin Tandon - chief information officer and managing director of Vanguard’s Information Technology division
Lauren Valente - managing director of Vanguard's Human Resources division
Matthew Benchener - managing director of Vanguard Personal Investor
Joseph Brennan - managing director and Vanguard's global chief risk officer
Greg Davis - managing director and Vanguard's chief investment officer
John James - managing director of Vanguard's Institutional Investor Group
Chris McIsaac - managing director of Vanguard's International division
Thomas Rampulla - managing director of Vanguard's Financial Advisor Services division
Karin Risi - managing director of Vanguard’s Strategy, Product, Marketing and Communications division
Anne Robinson - general counsel of The Vanguard Group, Inc., and secretary of the Vanguard funds
Michael Rollings - chief financial officer and managing director of Vanguard's Finance division
Nitin Tandon - chief information officer and managing director of Vanguard’s Information Technology division
Lauren Valente - managing director of Vanguard's Human Resources division
None
Examples of CIR actions during the previous three years:
Please see the website links below:
https://corporate.vanguard.com/content/dam/corp/advocate/investment-stewardship/pdf/policies-and-reports/inv_stew_2021_annual_report.pdf
https://corporate.vanguard.com/content/dam/corp/advocate/investment-stewardship/pdf/policies-and-reports/inv_stew_2022_annual_report_april_2023.pdf
https://corporate.vanguard.com/content/dam/corp/advocate/investment-stewardship/pdf/policies-and-reports/inv_stew_2021_annual_report.pdf
https://corporate.vanguard.com/content/dam/corp/advocate/investment-stewardship/pdf/policies-and-reports/inv_stew_2022_annual_report_april_2023.pdf
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