Edinburgh-based investment giant Abrdn plc announced that for the 2024 proxy voting season it has “strengthened its approach to the independence of audit committees in developed markets, board diversity in FTSE 350 companies and companies that permit virtual only general meetings.”

Abrdn has assets under management and administration (AUMA) of almost £500 billion.

In the UK and US, Abrdn said it will vote against non-independent members of audit committees, and in continental Europe it will take this action if the committee is not majority independent. It will also vote against a non-independent audit committee chair.

On UK board gender diversity, Abrdn said it has previously taken voting action at the AGMs of FTSE350 companies where the board does not comprise at least one third female directors “and will continue to do so in 2024.”

Abrdn said it may also vote against the chair nomination committees if it has concerns regarding the committee’s efforts in succession planning to achieve the FCA’s diversity target of 40% female directors.

“These updates form part of our revised voting policy which provides views on best practice across numerous governance and sustainability topics, details of our voting approach and key voting policies for shareholder meetings taking place in 2024,” said Abrdn.

“A key focus area for 2024 season will be the independence of audit committees in developed markets. External research, including a paper by Stanford University, has linked audit committee independence to reduced misconduct and positive impact on earnings quality.

“In view of the significant oversight responsibilities borne by audit committees we will take voting action if composition is not in line with our expectations.

“In the UK and USA we will vote against non-independent members of the committee, and in continental Europe we will take this action if the committee is not majority independent. We will also vote against a non-independent audit committee chair …

“We believe that companies that make progress in diversity, equity and inclusion are better positioned for long-term sustainability and outperformance.

“In view of the FCA’s diversity targets for listed companies, which are based on the principle of ‘comply or explain’, we have set out our expectation that companies seek to comply with these targets.

“We have previously taken voting action at the AGMs of FTSE350 companies where the board does not comprise at least one third female directors and will continue to do so in 2024.

“However, we may also vote against the chair of the nomination committee if we have concerns regarding the committee’s efforts in succession planning to achieve the FCA’s diversity target of 40% female directors …

“The pandemic of 2020 ushered in the necessary format of virtual general meetings.

“While such a format can increase participation of investors by removing challenges presented by location or meeting concentration, we remain of the view that in-person meetings provide an important point of contact for investors and remain a valuable tool for accountability.

“Our preference is for companies to adopt a hybrid approach to balance accessibility with in-person accountability.

“As temporary pandemic regulation has come to an end, certain European markets have introduced legislation in relation to the format of general meetings.

“Notably, companies can seek shareholder approval to permit virtual-only general meetings within their Articles of Association.

“We have therefore strengthened our voting policy to clarify that we will generally vote against proposals which will permit wholly virtual general meetings.

“In applying our votes, we will have consideration of whether the proposals are to apply in exceptional circumstances only.”

Andrew Mason, Head of Active Ownership at Abrdn, said: “Our voting policies are targeted to ensure that the board directors are conducting their fiduciary duties in what we believe are the best interests of the company and shareholders given board governance promotes the long-term success and value creation of the company.

“Furthermore, as the complexity and number of issues tabled during the voting season continues to increase we will continue to actively vote in the best interest of our clients.”