AXA Investment Managers –Corporate Governance & Voting
PolicyFebruary 2023
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Table of contents

1. PREAMBLE ................................................................................................................................ 3
2. Company Boards and Directors ...................................................................................................5
3. Executive Remuneration ......................................................................................................10
4. Reporting and Audit ............................................................................................................. 13
5. Shareholder Rights ............................................................................................................... 14
6. Mergers and Acquisitions.....................................................................................................17
7. Environmental and Social Issues .......................................................................................... 18
8. Implementation ................................................................................................................... 20
8.1. OVERSIGHT ........................................................................................................................................... 20
8.2. COMPANY DIALOGUE .......................................................................................................................... 20
8.3. VOTING ................................................................................................................................................. 20
8.4. STOCK LENDING ................................................................................................................................... 21
8.5. CONFLICTS OF INTEREST ...................................................................................................................... 21
8.6. REPORTING .......................................................................................................................................... 21

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1. PREAMBLE
Our general approachgreener and more sustainable world. Climate action
is critical for human progress, and it is our
responsibility, as steward of our clients’ assets, tomitigate the risks posed to our investments by
climate change, including through our long-term
dialogue with our investee companies. Our belief isthat this transition will not succeed if the social andgovernance pillars are not part of the equation.
Similarly, we believe that appropriately addressing,when material, social (such as human capitalmanagement and retention) and governance issues(to ensure alignment of interests between
management, shareholders, and company) enables
effective risk mitigation of potential regulatory,
reputational, and/or financial risks, that are
ultimately detrimental to long-term performance.

AXA IM's approach to corporate governance –namely our proxy voting and shareholder
engagement work – derives from our strongly held
belief that company management, directors andinvestors all have critical yet unique roles to play insustaining the health of financial markets andensuring the efficient allocation of capital.
Corporate governance refers to the system by whicha corporation is directed and controlled. It concerns
rights, responsibilities of the different stakeholders
in the corporation such as the functioning of theBoards, managers, shareholders.
The effective governance of individual corporations
by directors and the attentiveness of institutional
investors, as the primary owners of publiccompanies, are required to produce sustainable
performance that serves the best interests of all
marketplace stakeholders. Accordingly, we believethat delivering long-term financial returns requires
effective consideration of all value drivers, including
sustainability factors, in the assessment of ourinvestments’ risk/return profile. In that respect, we
believe that institutional investors have an
obligation to exercise their rights as owners andengage with portfolio companies in a responsible
way. As an investor with a widely diversified
portfolio and long-term horizons, we believe thatsustainable corporate governance increases theresilience of our investments and creates theframework to ensure that a corporation is managed
in the long-term interest of its stakeholders. Voting
at Annual General Meetings is a key component ofstewardship with our investee companies, and aright given to the shareholders, as such, we intend
to exercise our voting rights in a way that is
responsible and prudent, in order to deliver the best
economical outcome to our clients. We consider thisto be part of the fiduciary duty for a fund manager
like AXA IM.

Therefore, we have developed this Policy to help
guide us in performing our duties and tocommunicate the principles which underpin this
aspect of our responsible investment activity to themarketplace.
This policy provides the foundation for AXA IM's
proxy voting and company engagement activities, aswell as for participation in related public policy
discussions. This policy is applicable to listed equity
holdings managed by all AXA IM entities on behalfof clients who have given AXA IM full discretion to
vote.
The building blocks of this policy are based oninternationally recognised best-practice principles
and our lengthy experience as an asset manager
invested and engaging with companies fromdifferent regions with heterogenous governancepractices. AXA IM supports the development ofindustry standards aimed at guiding our activities
as a responsible asset manager. We are notably amember of the United Nations-backed Principles
for Responsible Investment (PRI), a supporter of
the Task Force on Climate-related Financial
Disclosures (TCFD), a signatory of the UK
Stewardship Code (the Code), and an endorser of
the International Corporate Governance Network

As Transition Leaders, we are convinced we have a
key role to play in financing the transition to a3

2. Support for management: As a transition
leader, we aim to support the companies inwhich we invest and therefore their boards,
by voting in favour of proposals unless they
are inconsistent with the appropriate
direction of travel.

(ICGN) Stewardship Principles1. We wish to play arole in defining those standards, and to act inaccordance with the principles and best practices
as defined by such relevant initiatives.
A flexible policy guided by engagement with theinvestee companies

3. Engagement: In the event of a resolutionthat is contrary to our policy, standards ofgood governance or the protection of thelong-term interests of shareholders, we willseek to engage with the company before
voting against a resolution, on a best effort
basis and depending on several factors,
including the severity of the ESG risk tackled
via the resolution and the significance of ourholdings. We strive to vote in an informed
manner, to have a quality vote, guided byour policy and any additional information
provided by the company, or thereby tochange the approach taken by thecompany. We will seek to inform thecompanies engaged of any potential voteagainst management in advance, and thereasons for that vote. For the othercompanies, we will inform them of ourvoting intention on a best-efforts basis.

We believe that the principles included in this policy
provide a robust framework for the proper
governance of companies. However, in applying
these principles, we are cognisant of the fact thatcompanies are dynamic and a “one size fits all”
approach is not appropriate. We are committed toexercise this Policy across different portfolios andmarkets, but Corporate Governance standards canvary from a market to another. Therefore, this policy
prescribes general principles, but AXA IM will take
into consideration specific circumstances such as
geography, company size, market capitalization,
number of our holdings, and most importantly theongoing engagement with the management anddirectors of the company concerned. Our approachis based above all on a regular dialogue with thecompanies we invest in, an understanding of theiractivities, their sector and the challenges they face.
General Principles

The core principles of AXA IM's Corporate
Governance and Voting Policy include the following:

1. No abstention: AXA IM aims to vote against
or for a resolution and abstain in rare cases,
guided by exceptional circumstances.

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The complete list is available in our annual
Stewardship report.

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2. COMPANY BOARDS AND DIRECTORS
We consider the Board to be the cornerstone ofgood corporate governance as it is the decisionmaking body charged with overseeing a company’s
affairs on behalf of its owners.

We consider that the role of non-executive directors
includes:Directors have, either by law or in De Facto terms,
fiduciary responsibility for acting in the bestinterests of the company and are accountable to theshareholders as a whole.
As such, we push investee companies to constituteboards whose approach enables the creation of
long-term sustainable value, thus taking into
account the management and supervision ofstrategic, operational and material ESG factors andthe interests of key stakeholders. It is essential thatthe board is able to establish and maintain robust
governance to support and sustain the company's
strategic objectives. The company's long-term
strategy and value creation including ESG factors
should be communicated so that shareholders
understand how the board identifies, manages andmitigates these risks.
NON-EXECUTIVE DIRECTORSThe key role of non-executive directors is to ensurethat management concentrate on optimising longterm shareholder value.
The detachment of non-executive directors fromthe day-to-day management of the company meansthat they have the capacity to look at the interestsof the company over the longer term. It is
nonetheless vital that non-executive directors are
truly engaged with the business in their supervisory
capacity and able to bring a long-term perspective
to deliberations so that management decisions are
not dominated by short-term considerations.

•Contributing to the right strategy for thecompany;•

Considering material risk issues, including
environmental and social issues impacting
the company;•

Participating in Board discussions on major
issues of business development;•

Appraising the performance of key
executives, including the Chief Executive;•

Monitoring results and pressing for
appropriate corrective action whennecessary;•

Ensuring that the company has the rightexecutive leadership and appropriate
succession plans;•

Safeguarding shareholders’ funds by using
the ability to challenge management andinitiate change when necessary;•

Ensuring effective company communication
with shareholders; and•Carrying out specific corporate governancefunctions, principally via Board committees
which deal with real or apparent conflicts ofinterests in the areas of financial reporting,remuneration and nomination of new
members to the Board.

Market integrity also requires that key participants
exercise their responsibilities with diligence andhonesty. Events of the last decade have highlighted
the ramifications to companies, investors andsociety of inattention to these basic principles.
INDEPENDENCE
Boards have to manage the company’s relationshipwith a wide range of interests including theexecutives, significant shareholders, employees,
suppliers and regulators. Oftentimes, thesestakeholders have directors representing theirinterest on the Board. Notwithstanding theparticular interest they represent, directors have afiduciary duty to act in the best interest of theNon-executive directors must exercise effective
oversight of the executives in relation to theirachievement of strategy and targets as well as
managing situations where there may be real or
potential conflicts between the interests ofmanagement and those of shareholders.

5collective shareholder body and to exercise
independent judgement when deliberating on thecompany’s affairs.

SHAREHOLDER REPRESENTATIVES
We are not in favour of direct proportionality
between the holdings of major shareholders andthe number of representatives they are allowed tonominate to the Board. Major shareholder(s)representatives should not be allowed to dominate
the Board simply by virtue of the holdings they
represent.

Due to inherent conflicts that may occur, we
require that a significant number of directors on
the Board be independent in a strict sense. Such
independent directors provide assurance that theinterests of a particular group are not allowed todominate the affairs of a company. We expect
Boards to align with national norms or bestpractice on independent director participation on
board.

BOARD DIVERSITYThe Board should comprise a range of directors who,
individually and collectively, understand thecompany’s strategy; can contribute their knowledge
and expertise to the development of its businesses;
understand the environment in which it operates;
have a knowledge of the markets where it conducts
its businesses; are aware of the risks associated withthe strategy; and have insights into the different
stakeholders, including regulators, customers,
shareholders and wider society, whose views
impact on the company or whose support isnecessary for its continued success.

An independent director is one who is free from
relationships or circumstances which could affect,
or appear to affect, the director’s judgement. No
checklist of descriptive characteristics will suffice tocapture whether a director is likely to behave in an
independent fashion. Nevertheless, factors webelieve may affect a director’s judgement andtherefore independence include where the director:• Is a former employee of the company within
the last five years;• Has (had within the last three years) amaterial business relationship with thecompany or is a representative of suchinterests;• Receives additional remuneration from thecompany other than in the capacity of adirector;• Has close family ties with any of thecompany’s directors, senior employees orcompany’s advisers;• Holds cross directorships with an executive
director;• Is or represents a significant shareholder;and;• Has served on the Board for a significant
length of time, from 9 years to 12 years
depending on market practice.

We believe that this requirement naturally points
to the need for a diversity of skills, knowledge,
experience, gender and nationality amongst thedirectors on the Board. We signal via our voting on
the Nomination Committee Chair, other directorrelated matters, or any other relevant resolution
reservations around the gender diversity level ofinvestee companies’ boards.
We are also mindful of all aspects of diversity
beyond gender, especially a diversity of origins,
ethnicities, and social backgrounds. For markets
where this is permissible, we may also take action
against the Nomination Committee Chair where
there is insufficient ethnic representation on the
Board.

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BOARD OVERSIGHT OF E&S ISSUES

Moreover, we expect Boards to evidence proper
governance of key ESG-related risk issues, unless
we may raise concerns under the reelection of theBoard Chair.

We will pay particular attention to the board
members’ experience and proven track-record inmanaging environmental and social issues. In thecontext of the energy transition, climate change, as
well as natural capital degradation and biodiversity
loss, competences of the board members on theseissues will be sought as we consider them to be key
and essential.

CHAIRMAN AND CEO
Our general preference is that companies separate
the roles of Chief Executive Officer (CEO) and
Chairman; with the CEO responsible for leading
executives in implementing Board strategy and the
Chairman leading the Board’s supervision of
executive performance. Where these functions are
combined, there would be no independent person
charged with leading the Board’s discharge of its
oversight responsibilities.

In that context, the TCFD guidance on governance,
mainly the disclosure of the board’s oversight ofclimate-related risks and opportunities, and how
the board is acting on those, in addition to
management’s role in assessing and managing
climate-related risks, are elements we examine inthose companies that are critical for the transition.

A company’s decision to combine these positions
will be reviewed on the merits, taking account of thecompany’s circumstances and whether there arechecks and balances to mitigate against power
being concentrated in the hands of one
individual. To guard against this risk, companies
who have combined the Chairman/CEO functions
should appoint a Senior Independent Director (SID)
to lead non-executive directors on matters where
the Chairman/CEO is conflicted and act as anadditional contact point for shareholders. The SID
should be vested with sufficient powers andresponsibilities to act as an effective counterpower.
In addition, where roles are combined, we would
expectthat
qualifiedandexperienced
independent non-executive directors compose atleast 50% of the Board, even in markets where
corporate governance norms accept a lower levelof board independence.

This approach would also apply to other ESG risks
that might emerge in our investee companies’ life
cycles, including but not limited to, social issues, anddata privacy. On all those issues, engagement
remains the first angle of approach tounderstanding the nomination committee’s
approach of board appointments. However, robust
disclosure on the desired ESG skills, and how
nominees contribute to the overall Board’s
expertise and effective oversight of sustainability
matters, is expected.
In that respect, we welcome the move by many
companies to establish a standing board committee
to oversee the company’s management of its
material environmental and social impacts and toensure that the company fulfils its reporting
obligation to enable shareholders to assess this
aspect of the company’s performance. We believethat it is increasingly important that boards address
and report on this activity as seriously as they dotheir other functions.

A decision to combine these functions should be
subject to periodic reviews to ensure that it
continues to be in the interest of the company andits shareholders.

Where we consider that a Board has not managed
environmental and social issues appropriately, we
will reflect our concerns by voting against relevant
directors standing for election.

Although we acknowledge the presence of a retiring
Chair & CEO as Chair to be beneficial in specific cases,
including to ensure a smooth and organizedtransition, appropriate checks and balances should7

be in place to prevent any risk of conflict of interestor undue influence from the non-independent Chair.

Therefore, we expect members of any key
committee to have appropriate experience andsufficient expertise in the areas relevant to theduties assigned to said committee. We also expect
key Committees to be majority independent, andhave a strong preference for Committee Chairs tobe appointed among independent directors.

AVAILABILITY
In light of the growingly complex and sophisticatedresponsibilities of the Board towards the Company,
its shareholders and an increasingly wider group of
stakeholders, it is crucial that the Nomination
Committee ensure that directors have sufficient
time to devote to their role.

BOARD ACCOUNTABILITY
The Board being the ultimate representative ofshareholders’ interests, we will hold relevant
directors responsible in case of poor managementof environmental, social or governance issues,
including (but not limited to) in the following cases:

We will therefore be mindful of the number andnature of external commitments held by directors,
and expect them to attend all board andcommittee meetings held.
In addition, limiting the number of boards mandates
an individual can hold, may encourage Board
refreshment and the appointment of candidates
with more diverse backgrounds.

•

Insufficient measures taken to address
climate issues, or any other relevant E&S
issues raised during one of our thematic
engagement;•

Lack of responsiveness following oppositionat the AGM, including on remuneration
proposals;•

Significant environmental, social or
governance controversy has occurred, andthe Board has proven to have failed to takethe necessary measures to prevent it;•

Measures were taken by the Board thatnegatively impacted shareholders’ rights.

NOMINATION COMMITTEEThe Nomination Committee leads the process forthe appointment of directors to the Board.
The Nomination Committee should ensure thatappointments to the Board are based on merit andthat directors’ track record, and that of thecompanies they have been associated with, is agood one.
BOARD COMMITTEES
Committees may be beneficial to the effectivenessof Board functioning by providing counseling andadvice to the Board on specific issues that could
require specific expertise.

ISSUES OF CONCERN – BOARDS
We may withhold support from director elections in the following instances:
1/ Information & election process• Insufficient information on the Board or where biographical details on proposed directors are
not provided;• Directors do not stand for election by shareholders on a regular basis;• The election of several directors is bundled into one resolution.
2/ Independence
The nominee is not considered to be independent, and:8•

Independent directors on the Board constitute less than one third (or the number recommended
by local best practice) of the total board (including management, employee directors, etc.).

3/Diversity:• Composition of the Board does not reflect necessary diversity.
4/ Board oversight of ESG issues• The structure of the Board does not allow for effective management and oversight of ESG
issues;• There are not enough directors with an experience and a proven track-record in managing
environmental and social issues.
5/ Dissociation of Chairman/CEO roles• The position of Chairman and Chief Executive are held by one person and the risk is not
mitigated by a Senior Independent Director and a majority independent Board;• The position of Chairman is held by the former Chair & CEO and no adequate counterpower
mechanisms are in place.
6/Availability• The number of directorships held by the nominee is excessive and/or the director has not
devoted sufficient time to the company.
7/Board committees:• Key committees are not majority independent;• The Board has not established audit, remuneration or nomination committees while executive
directors sit on the Board.
8/ Board accountability• To raise concerns about the company’s governance or ESG performance;• Concerns about a director(s) execution of their ESG-related responsibilities;• Concerns about the Board’s response to shareholders’ expectations.

93. Executive Remuneration
Boards, through the Remuneration Committee, areresponsible for adopting remuneration policies andpractices that promote the success of companies increating value for the longer term.

meeting.
We welcome this trend towards
accountability and encourage all companies toadopt this practice.
PERFORMANCE-RELATED REMUNERATION

The policies and practices should be demonstrablyaligned with corporate objectives and businessstrategy and reviewed regularly. It is necessary toensure that remuneration policies encourage highstandards of performance, aligning the interest of
management with those of long-term shareholders.

Annual bonuses and grants of options or conditional
shares to executives should be subject to definedand relevant performance criteria which should be
disclosed to shareholders. Targets should betailored to the requirements of the business and bereviewed in line with the evolution of thecompany’s strategy.

QUANTUM
Levels of remuneration should be sufficient to
attract, motivate and retain management of a highcalibre but should not be excessive by the standardsof employment conditions within the company,
sector or the executive’s country of residence.

It is the responsibility of the Remuneration
Committee, working with the Audit Committee, toensure that rewards reflect performance against
target. Remuneration arrangements should notentitle executives to rewards when this is notjustified by performance. Performance conditions
may be subject to criteria linked to the company's
performance from a financial point of view.
However, we also encourage investee companies tointroduce criteria linked to the company's nonfinancial performance. Subordinating a part of thevariable remuneration of executives to nonfinancial objectives will accelerate the transition ofcompanies towards more virtuous models.

When setting executive pay, the Remuneration
Committee and Board should therefore consider
pay and employment conditions for the general
workforce. We generally do not support repeatedincreases to the pay and conditions for senior
executives that are out of line with the pay
conditions proposed for the general workforce.
REMUNERATION DISCLOSURE
We expect companies to provide full andcomprehensive information on the company’s
remuneration policy and practices in the Annual
Report. The information provided should cover all
the elements of remuneration, including salary,
annual bonus, benefits, share-based compensation,pensions and details of executive service contracts
including notice periods and compensation
payable on termination. This information should be
provided on an individual basis.

Non-financial objectives should include ESG
elements in order to motivate management tomove the company towards a more sustainablemodel. These elements need to be tangible,
material, clearly explained to shareholders, andnot be used as a discretionary way of adjusting
executive remuneration outcomes.
We will pay attention to a choice of relevant metrics,
which are related to the activity of the company, itssector, its strategy, and are measurable,comparable and achievable metrics. Criteria usedshould be disclosed, detailed, stringent enough.

There is a growing trend for transparency andaccountability by the Board in its oversight ofexecutive remuneration on shareholders’ behalf.
Many jurisdictions provide shareholders with theopportunity to vote on the remuneration policy andits application during the year at the general

For companies which belong to the sectors which
are the most sensitives to climate considerations,
we expect specific climate-related criteria to be10

included in the variable remuneration of the main
executives.

The operation of share incentive schemes
represents a cost to shareholders. The operation ofsuch schemes should not lead to dilution ofshareholder equity in excess of the limits
acceptable to shareholders.

EXCEPTIONAL REMUNERATION
We do not support the payment of bonuses thatreward executives for executing transactions (suchas mergers or acquisitions) irrespective of their
future financial implications for the company.

We support initiatives to encourage executives tohold shares in the company equivalent to at least
one year’s salary. This further aligns the interest of
the executive with those of the company and its
shareholders. Many companies require executives
to retain awards accruing to them under long-term
share schemes until they meet the share ownership
requirement.

LONG-TERM SCHEMESLong-term incentives, by linking reward to
performance over the longer term, motivate
executives to create sustainable shareholder value.
The receipt of rewards under these schemes
should therefore be based on disclosed andchallenging performance conditions measured
over a period appropriate to the strategic
objectives of the company.

TERMINATION BENEFITS
Companies should align service contract termswith best practice in their relevant markets and inany case should not exceed the equivalent of 24months compensation.

The minimum period should be no shorter than
three years and we actively support longer
performance periods that are in tune with thecompany’s longer-term strategy. All new sharebased incentives or any substantive changes toexisting schemes should be subject to prior approvalby shareholders by means of a separate and binding
resolution. Their operation, rationale and costshould be fully explained so that shareholders canmake an informed judgement.

Boards and remuneration committees should
ensure that any compensation paid cannot beviewed as a reward for failure.
CLAW-BACK POLICYThe Board should consider means of reclaiming
rewards where performance achievements aresubsequently found to have been significantly
misstated so that bonuses and other incentives
should not have been paid.

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ISSUES OF CONCERN – REMUNERATION
We may withhold support from remuneration proposals in the following instances:
1/Quantum:• Remuneration is based on inappropriate peer comparisons;• Pay for senior executives is out of line with pay conditions for the general workforce.
2/Disclosure:• There is a poor level of disclosure of remuneration policy and practices;• There is an incomplete disclosure of performance metrics underpinning performance-related
remuneration.
3/Performance related remuneration:• Performance targets are not relevant to the company’s strategy, insufficiently challenging,or absent;• Rewards granted are not justified by the Company’s performance;• There is no ESG elements added to the performance-based remuneration (bonus or LTI), or
the KPIs selected are not relevant to the company’s long-term strategy, tangible, clearly
explained, or sufficiently stringent.
4/ Exceptional remuneration• Executives are rewarded for executing transactions irrespective of their future financial
implications for the company.
5/ Long-term schemes• The performance period for a long-term scheme is shorter than three years;• Stock options for executives are granted at a discount i.e. priced below prevailing market
price;• The company engages in option award backdating;• The dilution of shareholder equity through the issuance of shares for share incentive schemes
is excessive.
6/Termination payments:• Compensation payable on termination is excessive or not in line with market practice;• Termination payment is paid in a situation of failure;• Allows triggering of change in control payouts without loss of job or substantial diminutionof duties;• Enhanced compensation on change of control of the company.

124. Reporting and Audit
CORPORATE REPORTING

material to the company’s strategy andperformance;

In a well-functioning market, which enables
investors to perform their fiduciary role vis a vis
clients’ assets, it is critical that investment decisions
which impact the allocation of capital be based on
full and accurate information.
Robust disclosure is essential for investors toeffectively gauge companies’ business practices andstrategic planning related to E&S risks andopportunities. Thus, we support the adoption ofinternational frameworks that allow companies toreport on sustainability information. This allows us
to evaluate how the company’s strategy,
governance, performance and prospects, in thecontext of its external environment, lead to thecreation of value over the short, medium and longterm. The Board should provide sustainability
reporting that puts historical performance into
context, and portrays the risks, opportunities andprospects for the company in the future, helping
investors understand a company’s strategic
objectives and its progress towards meeting them.
This reporting should be easily accessible toshareholders, and should:•

Be linked to the company’s business model;•

Be genuinely informative and include
forward-looking elements where this will
enhance understanding;•Describe the company’s strategy, andassociated risks and opportunities, andexplain the board’s role in assessing andoverseeing strategy and the managementof risks and opportunities;

•

•

•

Use key performance indicators that arelinked to strategy and facilitatecomparisons;•Use objective metrics where they apply andevidence-based estimates where they donot;•

Be strengthened where possible byindependent assurance that is carried out
annually having regard to establisheddisclosure standards.

Full company accounts, audited by independent
external auditors, should be presented to acompany’s annual general meeting for shareholders’approval.
AUDIT COMMITTEE
The Audit Committee is responsible for exercisingoversight of the company’s process for internal
controls
andfinancialreporting.
Actingindependently from management, it has a particularrole to ensure that the interests of shareholders areprotected in relation to financial reporting. The
Committee is responsible for overseeing andproviding assurances to shareholders on the
integrity, objectivity and independence of theexternal audit process.
NON-AUDIT FEES
The Audit Committee should pay particularattention to the provision of non-audit services by
the external auditor and the risks that theprovision of such services may compromise theintegrity of external audit

Be accessible and appropriately integrated
with other information that enables
investors to obtain a picture of the whole
company;

AUDIT FIRM / AUDIT PARTNER ROTATION
There are now developments in many markets
supporting audit firm or audit partner rotation as amean to improve the independence and objectivityof the audit process. We support periodic rotation

Includeenvironmental,socialandgovernance related information that is13

as a further means to enhance the integrity andreliability of the external audit process.

ISSUES OF CONCERN – Reports & Account & Audit
We may withhold support from approval of Reports & Accounts and audit-related resolutions in
the following instances:
1/Disclosure• The company’s extra financial disclosure is lacking (e.g., oil major with no TCFD-aligned
disclosure);• Non provision of the audited accounts in a timely manner;• Concerns about the integrity of the information reported;• Non-reporting of material ESG performance, particularly in high-risk sectors and or
where sectorial peers are able to report.
2/Audit Integrity• Where an executive director is a member of the Audit Committee;• Non-audit fees are significantly higher than audit fees and no reasonable explanation isprovided;• The Audit firm has been in place for several years and no retendering of audit services
has been conducted by the Company or there has been no audit partner rotation for asignificant number of years.

5. Shareholder Rights
The ownership of shares in a company entitles
shareholders to corresponding rights in thecompany. We expect Boards to protect andfacilitate the exercise of shareholders’ ownershiprights. This includes giving shareholders reasonable
notice of all matters in respect of which they are
required to take action in the exercise of voting
rights, or which they may elect to take action on.

rights of minority shareholders to the benefit ofmanagement or a particular shareholder(s).
Barriers to the exercise of shareholders’ rights comein different forms. These include restrictions onshareholders’ voting rights; dilution of economic
interests through excessive issuance of shares; andprovisions which aim to limit the right ofshareholders to influence a company’s governance,or their ability to consider transformationaltransactions such as mergers, acquisitions or
disposals.

Major changes to the core businesses of acorporation and other corporate changes which
may in substance or effect, dilute the equity orerode the economic interests or share ownershiprights of existing shareholders, including mergers,
acquisitions, disposals, and issuance of equity
should not be made without prior shareholder
approval.

VOTING RIGHTS
In a shareholder democracy, the shareholder vote at
general meeting is the principal manner throughwhich shareholders can influence a company’s
governance and its strategic direction. Due to its
fundamental importance, we believe thatshareholders should have voting rights in direct
proportion to their economic interest (and risk
exposure) in a company. This is normally expressed

We are fundamentally opposed to measures that
seek to restrict, undermine, dilute or limit theexercise of ownership rights. In particular, we areconcerned about restrictions which seek to limit the14

as the one share, one vote principle.
therefore opposed to:•

We areadditional dilutive shares in the event of abid;

Measures that dilute the voting rights of any
shareholder by giving certain shareholders
voting rights in excess of their economic
interests;•

Proposals that cap shareholders’ voting
rights once ownership of a certain
percentage of shares is reached;•

Multi-class capitalisation structures created
to provide a particular class of shareholders
with disproportionate voting rights;•

Supermajority
votingrequirements
intended to limit the ability of shareholders
to effect change by effectively providing aveto to a large minority or a group ofminority shareholders;•Voting schemes that do not provide for
confidentiality of a shareholders' voteduring the election;•

Unduly restrictive shareholder disclosure
policies which have the potential to deprive
shareholders of their voting rights.

Transactions which transfer the legal title ofa key asset to a friendly foundation andhave the effect of frustrating a takeover bid;•

Proposed repurchase of the company’s
shares during a bid period at a price that issignificantly higher than the fair market
value of the shares; and•Blank-cheque preferred shares which may
be used as a takeover defence or may beplaced in friendly hands to help block a
potential takeover bid.

PRE-EMPTION RIGHTS
Issuance of new shares presents a risk of dilution toshareholders’ economic interests. It is establishedpractice in many jurisdictions to grant shareholders
the right to approve the issuance of new shares toguard against inappropriate dilution of theireconomic interest in a company.
The issuance of new shares may be on a preemptive basis (new shares are offered to existing
shareholders in proportion to their holdings in thecompany) or on a non-pre-emptive basis (where thepre-emption rights of shareholders are excluded).

ANTI-TAKEOVER PROVISIONSThe Board has an important role in ensuring that thecompany is properly valued during change ofcontrol transactions. However, we have concerns
about anti-takeover devices that have the effect of
discouraging transactions that may be attractive toshareholders or which limit shareholders’ ability tovoice their opinion on a change of control
transaction. Many of these devices serve toentrench management and do not allow
shareholders the opportunity to judge theperformance and prospects of the company under
its management relative to the proposal from thebidder.

We are vigilant in reviewing resolutions to issue
new shares, particularly if such requests are inexcess of the norms in the relevant market. Factors
we will take into consideration in reaching adecision include:

Devices that cause concerns include:••

Poison pills which deter takeovers by
granting the board the ability to issue

15•

The level of dilution of value and control forexisting shareholders;•

The strength of the business case: in orderto make a reasoned assessment
shareholders need to receive a clear
explanation of the purpose to which thecapital raised will be put and the benefits to
be gained - for example in terms of productdevelopment or the opportunity cost of notraising new finance to exploit newcommercial opportunities - and how thefinancing or proposed future financing fits
in with the life-cycle and financial needs ofthe company;•

The size and stage of development of thecompany and the sector within which it
operates;•

The stewardship and governance of thecompany. If the company has a track recordof generating shareholder value, clear
planning and good communications, thismaygiveshareholders
additional
confidence in its judgement; and•Availability of financing options that do not
involve the issue of new shares.
ISSUES OF CONCERN – Shareholder Rights
We may withhold support from resolutions that impact on shareholder rights in the following
instances:
1/Voting Rights:• Measures that dilute the voting rights of any shareholder by giving certain shareholders
voting rights in excess of their economic interests;• Proposals that cap shareholders’ voting rights once ownership of a certain percentage ofshares is reached;• Multi-class capitalisation structures created to provide a particular class of shareholders withdisproportionate voting rights;• Supermajority voting requirements intended to limit the ability of shareholders to effectchange by effectively providing a veto to a large minority or a group of minority shareholders;• Unduly restrictive shareholder disclosure policies which have the potential to deprive
shareholders of their voting rights.
2/Anti-takeover provisions:• Poison pills which deter takeovers by granting the Board to ability to issue additional
dilutive shares in the event of a bid;
• Transactions which transfer the legal title of a key asset to a friendly foundation and havethe effect of frustrating a takeover bid;
• Proposed repurchase of the company’s shares during a bid period at a price that issignificantly higher than the fair market value of the shares;• Blank-cheque preferred shares which may be used as a takeover defence or may beplaced in friendly hands to help block a potential takeover bid.
3/Pre-emption Rights• Proposed issuance of new shares with or without pre-emptive rights that are either inexcess of the market norms or are not justified.

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6. Mergers and Acquisitions
Mergers and Acquisitions require that we closely
evaluate the expected long-term success of thetransaction and may require a balancing of interests
on both sides of the transaction.
When evaluating a transaction, factors we take into
consideration will include:•

Short-term and long-term valuations, taking
the company's strategic potential into
consideration;•

Ability of the acquirer to successfully
implement the acquisition and integrate thecompanies;•

Strategic fit of the companies and ESG
factors bearing on future success;•Views of significant shareholders;•

Impact of the transaction on customers andother stakeholders;•Competitive landscape for the relevant
entities before and after the transaction;•

Leverage embedded into the transaction
and leverage after completion;•

Degree of management remuneration
misalignment with shareholder interests,

including change in control, bonus,
consulting and incentive award payments;•

Advisor conflicts resulting from successfees, investment banking opportunities andfuture interests in the surviving entity;•

Fairness of the process, such as whether
there was a fair auction, alternatives wereconsidered and the deal was evaluated byanindependent
committee
withindependent advisors;•

Market reaction to announcement of thetransaction;•

Corporate governance profile of any
surviving entity in which we will retain aninterest;•

Human capital impact of the transaction
taking account of the consequences for
employees and communities.

Due to the complexity of change of control
transactions, voting decisions will be made on acase-by-case basis jointly with fund managers, inline with the interests of their clients, and including
any material ESG considerations.

ISSUES OF CONCERN – Mergers and Acquisitions
We may withhold support from change of control transactions including mergers and acquisitions• Where our fund managers believe that the transaction is not in the long-term interestsof shareholders;• Favourable terms are offered to majority shareholders to the detriment of our clients.

7. Environmental and Social Issues
We believe that companies which operate without
due regard to the environmental and social impactof their activities are unlikely to deliver sustainablelong-term shareholder value and a company’s
management of relevant environmental and social
issues is a lead indicator of success or failure.

made to address issues we raise via our thematic
engagements.
VOTE ON TRANSITION PLANS
While acknowledging strategy as being of theprerogative of management, we welcome themovement by some investee companies to submit
an advisory vote on their transition plans, as a spacefor shareholder dialogue and increased engagement.
We welcome regular votes or other means ofshareholder communication on the progressagainst these announced strategies, and theirregular revision in line with science and investor
expectations.

We expect companies to align their policies andpractices with the Principles of the UN Global
Compact on Human Rights, Labour, Environment
and Ethical Behaviour and OECD Guidelines forMulti-National Enterprises.
CLIMATE
Climate change is a major risk facing society today,
and immediate action is required if significant
environmental and societal damages are to be
avoided. As part of our climate risks policy we urge
companies to:
o

o
o

o

We will analyse them and assess their consistency
with the company’s climate strategy. We will pay
special attention to proposals from companies withlarge greenhouse gas footprints. We will regularly
review the proposed plans and ask companies toreport to shareholders and stakeholders on theachievement of the objectives of these transition
plans, notably in the medium-term.

Commit to a net zero emission strategy,
with short-, mid- and long-term carbon
emissions reduction targets that are
based on climate science. There should
be a clear explanation of corresponding
capital allocation plans;
Integrate the company’s entire value
chain in the climate strategy;
Perform scenario analysis using a
scenario where global warming islimited to the Paris Agreement goals;
andAlign executive remuneration toclimate change objectives.

BIODIVERSITY
As part of our policy on Deforestation and
Ecosystem Protection, we encourage companies
with a material impact on biodiversity and natural
capital more globally to put in place effective
mitigation strategies within relevant timelines.
For these companies, insufficient improvements
in terms of disclosure of biodiversity-related
strategy and risk management may lead to adissenting vote cast against the Management(including by supporting biodiversity-relatedshareholder resolutions) or the Board. In
companies which are exposed to other ESG risks,such as social and data privacy risks, the Board
may also be held responsible for not taking thenecessary measures to address them.

In companies considered to be in risky sectors,
particularly exposed to climate issues, the Board
may be held responsible for not taking thenecessary measures to address them. In such cases,
a dissenting vote may be cast against theManagement, the Board Chairman, the Audit
Committee Chairman, or the appropriate
supervisory element of the governance structure incase risk management shortcomings are proven tohave occurred or enough commitments are not18In addition, aggressive tax practices pose material
financial risks to our portfolios, as a company’s
profitability dependent on tax savings leads toheightened vulnerability to regulatory changes. It
also increases the litigation and reputational risks
weighting on companies.

POLITICAL DONATIONS & LOBBYINGThe Board of Directors should ensure that charitableand political contributions and membership of tradeassociations are in line with the long-term interestsof the company and its shareholders. In particular,
the Board should disclose, monitor, and regularly
review whether the lobbying activities of tradeassociations are consistent with the company’s
public positioning on environmental, social andgovernance issues, and should be willing torelinquish their membership in case of
misalignment.

We therefore expect adequate tax disclosure toenable our understanding of the Boards’
priorities and risk management.
Investeecompanies should have a detailed tax policy andgovernance. They should also provide sufficient
disclosure on tax arrangements, and we
encourage a country-by-country reporting.
We will carefully review shareholder proposals
related to tax issues and may decide to support
them to encourage further transparency oncompanies’ tax practices. We may also decide, ona case-by-case basis, to vote against the Board
Chair or the Audit Committee Chair should
significant tax controversies arise.

TAX TRANSPARENCY
Corporate tax contributions enable governments
to generate revenues for essential services, andare thus crucial to financing the Sustainable
Development Goals (SDGs) and addressing global
inequality.

ISSUES OF CONCERN – Environmental & Social Issues
We may withhold support from relevant resolutions including approval of Reports & Accounts,
director elections, remuneration proposals or support relevant E&S-related shareholder proposals
in the following instances:
1/ Disclosure• Non-disclosure of quantitative and qualitative information (and where appropriate targets)on key environmental and social issues of relevance to the company, particularly in highrisk sectors (climate, biodiversity issues) and or where sectorial peers are able to report;• Failure to participate in the CDP (Carbon Disclosure Project) programmes;• Insufficient tax disclosure.
2/Performance• A material failure in the management of environmental and social risks with resulting
negative impacts on the company and stakeholders including employees, customers andcommunities;• Material breach of one or more Principles of the UN Global Compact on Human rights,
Labour, Environment and Ethical Behaviour and OECD Guidelines for Multi-National
Enterprises;• Support for lobbying positions contrary to the long-term interests of the company and its
investors.

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8. Implementation
8.1. OVERSIGHT

we will bring the issue to the attention of the
Chairman and other non-executive directors. We
may also act in conjunction with other shareholders.

The Corporate Governance and Voting policy isvalidated by the Corporate Governance Committee
and by the Responsible Investment Strategic
Committee. The policy applies to listed equity
holdings managed on behalf of clients who havegiven AXA IM full discretion to vote.

If we are unable to resolve the issue throughengagement, we may consider using our clients’ownership rights to vote against relevant
resolutions or, submit resolutions at shareholders'meetings or requisition of an extraordinary general
meeting.

AXA IM has established a Corporate GovernanceCommittee which is charged with upholding goodstandards of corporate governance in investee
companies. The Corporate Governance Committee
is co-chaired by the Chief Investment Officer of AXA
IM Paris and the Head of AXA IM Group Research.
The Committee comprises representatives ofInvestment teams, who bring their investment
perspectives to the Committee’s deliberations, aswell as representatives from Responsible
Investment teams. It is organised by the Corporate
Governance team.

Governance engagement is key for us, and part ofour engagement policy (link), and portfolio
managers, relevant platform are involved in theengagement with the investee companies.
8.3. VOTING
We believe that voting at company meetings is an
important part of the dialogue between a company
and its shareholders and a fundamental aspect ofour fiduciary duty to our clients. We actively
monitor resolutions proposed for shareholder
approval at general meetings and exercise voting
rights on behalf of our clients.

In addition, members of our Compliancedepartment are represented on the Committee toensure that decisions are taken in line withprescribed process, free of conflicts and in theclients’ interests. Our Middle Office is also
represented on the Committee in view of theirimportant role to ensure that the voting chain andprocessing of voting instructions works correctly.

We recognise that practices vary in different
jurisdictions and that the companies in which weinvest are subject to different local laws andregulations on governance matters. Whenreviewing resolutions proposed at general
meetings we judge resolutions against
fundamental principles of good corporate
governance, while taking account of best practicestandards pertinent to the relevant market andthe Company’s particular circumstances.
As far as possible, we do not apply any specificrestrictions on voting regarding the type ofresolution nor the issuer in question, but theobjective is to vote at all possible general
meetings. Exceptions to these would be explainedin our annual voting report.

The Corporate Governance team implements thispolicy under the direction of the Committee.
8.2. COMPANY DIALOGUEAXA IM holds regular discussions with the Board andmanagement of investee companies on a range of
topics including the company’s strategy, operational
performance, acquisition and disposal strategy,
executive/Board performance, and management of
extra-financial drivers of risk and reward.
Our general policy is to be supportive of companies
in which we invest. However, where we haveconcerns that have not been or cannot beadequately addressed by a company’s management,

AXA IM makes use of the voting information
services of Institutional Shareholder Services, andProxinvest. The research received is used to20

augment knowledge of companies and resolutions
at forthcoming general meetings. All voting
decisions are made by the AXA IM Corporate
Governance team and are based on our Corporate
Governance & Voting Policy.
8.4. STOCK LENDING

decisions are taken prior to any reference or
discussions with clients who have not delegatedvoting rights to the Corporate GovernanceCommittee or have their own Policy. This is toensure that decisions are free from outside
influence.

Stock lending aids market liquidity and allows clientsto maximise revenues from their holdings and is atechnique used by AXA Investment Managers.
However, the attendant transfer of voting rights
along with the lent shares means that additional
scrutiny is required to ensure that lent shares are
not put to purposes that are detrimental to thelong-term interests of the shareowner. Shares will
not be lent where the objective of such activities is
to vote at general meetings.

In addition, where potential conflicts of interests
have been identified, recommendations to vote insupport of management resolutions contrary to ourregular Policy position will be escalated to the
Corporate Governance Committee. Any decision by
the Committee to vote contrary to the Policy
position in these cases will be supported by awritten record and, where appropriate, will be
notified to the relevant local internal governancecommittee and/or Compliance Department.

AXA IM adheres to the following key principles forstock lending:

An independent voting advisory service has been
appointed to take voting decisions on behalf of ourthird-party clients at the general meetings of ourparent company, AXA SA.

1. AXA IM intends to recall shares, aheadof record date, in advance of general
meetings to exercise voting right for
open-ended funds and mandates; andOur conflict-of-interest policy is available on our
website.

2. AXA IM will engage in stock lending witha robust responsible investment policy
in place as described in AXA IM
Responsible Investment policy.

8.6. REPORTING
Our Voting Records are accessible to the public anddetail how we voted at General Meetings ofcompanies held on our clients’ behalf. In addition,
we publish a Stewardship Report and a TCFD and
French Article 29 of the Energy Climate law’s reporton an annual basis and information on responsible
investment issues, engagement with companies andaggregated voting records for the relevant year.

8.5. CONFLICTS OF INTEREST
In relation to our stewardship activities, we haveadopted a set of guidelines to identify
circumstances which may lead to conflicts ofinterests. These guidelines include relationships
with listed affiliates such as our parent company,
AXA SA, key clients and significant suppliers.

Voting and Engagement reports are available on ourFund Center for our ESG, Sustainable and Impact
funds. We also provide our clients with detailed
quarterly reports on voting and engagement
activities upon request.

We manage conflicts within our voting activities
using the following approach. Firstly, the Corporate
Governance Committee has the sole responsibility
for taking voting decisions on behalf of clients who
have given AXA IM full discretion to vote. Voting

Information on AXA IM’s Responsible Investment
activities is available on our dedicated RI website.

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Issued by AXA INVESTMENT MANAGERS PARIS, a company incorporated under the laws of France, having its
registered office located at Tour Majunga, 6 place de la Pyramide, 92800 Puteaux, registered with the
Nanterre Trade and Companies Register under number 353 534 506, and a Portfolio Management Company,
holder of AMF approval no. GP 92-08, issued on 7 April 1992.
In other jurisdictions, this document is issued by AXA Investment Managers SA’s affiliates in those countries.

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