2. NAPF Stewardship Accountability Forum
Ian Barnes & Ian Pitfield
UBS Global Asset Management

3. NAPF Stewardship Disclosure Framework and UBS
Firm governance, including manager pay
Investment approach, including ESG
Engagement and voting

4. Engagement Natural fit with our investment business:
Significant passive assets under management
Long-term value oriented active manager

5. What we do to enhance and protect value for clients
Vote globally
Engage, mainly with Chairmen
Contribute to public policy debates
Work with other shareholders
Review portfolio holdings
Report to client on voting and engagement

6. Our credentials
Global voting experience – 7,075 meetings voted in 2013
Company knowledge – 7,000 company meetings per year
20 years of engaging with the Board – focus on key long-term issues
Active involvement in shareholder groups such as:
Asian Corporate Governance Association
IMA Governance & Engagement Committee
International Corporate Governance Network
Conference Board Governance Council
Published our 11th annual review for clients

7. Our voting for clients Year to 31 December 2013
Voted at 7,075 company meetings
In 50 markets
On 69,024 separate resolutions
Through 25 custodians
Not supported 4,171 resolutions (6% of total)
Intelligent application of our policy by the governance team
Working closely with our investment teams

8. Key participants in proxy voting chain
Issuer/Investee company
Issuer will announce time, date and location of meeting
Registrar / Transfer Agency / Tabulator
Registrar / Transfer Agency will issue voting papers (where applicable) and meeting information (in some countries this is issued by issuer direct to the registered shareholder)
Registered shareholder / Nominee / Local Sub-custodian
Registrar / Transfer Agency will issue voting papers (where applicable) and meeting information (in some countries this is issued by issuer direct to the registered shareholder
Global Custodian
Global custodian retains the local sub-custodian to be the registered holder of all securities, but may actually outsource the process of managing voting instructions received from clients to a third party agency or vendor
Proxy Voting Agency or Vendor (eg: ISS/Broadridge)
Proxy Voting Agencies can act in a dual capacity, ether as an outsourced vendor for the global custodian to handle instructions from beneficial owners, or on behalf of investment managers or beneficial owners to carry voting instructions to custodians
Investment Manager
Asset Owner
Some investors retain voting rights themselves, others allow discretionary investment managers or third party voting agencies to act on their behalf

9. The most important governance factors for us
Strategy is key – governance needs to focus on improving the long term performance of the company
Also:
The Chairman & the quality of the Board
Operational performance
Succession planning
Risk Management
Reputation
Remuneration
Engagement is very important and works best as a constructive dialogue rather than confrontation

10. Example of UBS Global Asset Management acting as a responsible shareholder
Vodafone
Sep-13 Vodafone announces sale of its 45% stake in Verizon Wireless for £84bn
Jun-12 – Jun-13 Meetings with Chairman
Jul-11 At the shareholder meeting we voted against the re-election of the Senior Independent Director given our concerns about the process to appoint a new Chairman
Apr-11 £6.8bn disposal of holding in French mobile operator
Oct-10 We wrote to the Senior Independent Director with our expectations of the qualities required of the new Chairman – now that process is in place for the Board to choose a new Chairman
Sep-10 £4.3bn disposal of China Mobil holding
Jul-10 At the shareholder meeting we voted against the re-election of the Chairman since no undertaking to replace him
Jul-10 Meeting of shareholders representing 19% of the equity with the Senior Independent Director to express concerns
Jun-10 Hosted meeting of shareholders to discuss our concerns
Feb-10 – Jun-10 Exchange of letters
Feb-10 We met the Chairman and Senior Independent Director to express our concerns about the poor operational performance and value-destroying acquisitions
Feb-07 – Feb-10 We had six meetings with Board members
Feb-07 We wrote to the Chairman to express our concerns about a potential acquisition
Source: Datastream, 04 November 2013.

11. Regional variations in Corporate Governance
The building blocks UK
Europe US
Japan
Checks and balances on the Board
Are the roles of Chairman and CEO usually split?
Yes
Varies No
Oversight of the Executives
Is there a large proportion of independent non executives on the Board
Shareholder oversight of major transactions
Do shareholders have a vote on major transactions

12. Final thoughts Governance + Investment = Better outcomes for clients
Boards need to be very effective and behaviour is very important
Good governance is trying to benefit company performance – so look at the governance 'outputs' as well as 'inputs'
Less groupthink from shareholders
Constant vigilance required