Proxy voting policy and process

MLC¹ represents unitholders and policyholders in matters of corporate governance through a Proxy Voting Policy, which is designed to protect and enhance the investment value of our funds' assets and recognise the strong link between good corporate governance and investment value.

The Proxy Voting Policy outlines that MLC assess and vote all proxies for every resolution in respect of holdings beneficially owned by MLC entities in companies publicly listed in Australia, excepting entities for which MLC has no discretion to vote. MLC's decision to assess and vote all proxies in which we have discretion to vote represents a serious commitment to encouraging these companies to be accountable for their actions and to uphold good corporate governance.

Where resolutions are assessed as contentious they are referred to a Proxy Voting Committee (PVC) for consideration on the exercise of the vote. Contentious issues can include (amongst other things) any of the following:

• Executive remuneration, including whether there are any performance hurdles to be met (share price or company specific), the options/shares/rights are granted at an unreasonable discount to market price, and whether retention incentives are being offered
• Option issue resolutions where the hurdles are not relative (absolute share price only), or hurdles not clearly stipulated, or measurable
• Option issues for non-executive directors
• Changes to the voting rights of ordinary shareholders
• New share issues or placements if the rights or standing of existing shareholders are impacted.
• Takeovers, schemes of arrangement and business restructures
• Share buy-backs, if preference is given to any shareholder or group of shareholders over others.
• High profile general meetings
• Group shareholder action
• Re-election of directors and board composition.

The PVC will make an assessment utilising information from a number of sources. These include the following:

• Commentary on any nominated resolution from MLC's appointed investment managers holding the related security in the MLC funds that they manage. Investment managers may also speak to the PVC directly on complicated matters or where the PVC requires additional background regarding a resolution. MLC believe that our investment managers provide highly valuable insight into contentious resolutions, as it is their responsibility to perform ongoing indepth analysis on company decisions and speak to companies directly regarding matters of concern;
• Market information and reports from independent corporate governance groups such as ISS Risk Metrics that provide comprehensive details on the following: resolution background, analysis, commentary, discussions with company representatives and voting recommendations.

MLC also considers:

• best practice standards of corporate governance such as the Financial Services Council Bluebook, the ACSI Guidelines and the ASX Corporate Governance Council recommendations when considering the voting decision and reviews its processes on an ongoing basis.
• historical data on previous resolutions and company policy/practices.

Every resolution is considered and voted upon according to the Proxy Voting Policy. Resolutions that are not considered contentious are voted according to standing instructions.
The assessment and proxy voting of international holdings has been delegated to MLC’s international equity managers.