The Association of Member Nominated Trustees (AMNT) officially launched its new AGM voting toolkit this month (08-Dec-15). The 34 policy ‘Red Lines‘  (19 Governance, 10 Social and 5 Environmental) are designed to help pension trustees hold investee companies – and the fund managers who manage their investments in them – better to account when it comes to stewardship and voting.

Two years in the making, the initiative addresses an important principle: in the face of a potentially very large information imbalance, trustees need a strong frame of reference to confidently hold their asset managers to account for their stewardship responsibilities. The AMNT’s proposed frame of reference is the Red Line Voting Policy.

The strident tone suggested by the name is matched in some of the detail. A one-size-fits-all standard for CEO to employee pay ratios will pose significant challenges for both investors and companies, as pointed out by keynote speaker Sir Vince Cable from the launch event platform at the Guildhall. Directors used to the comply or explain environment of the UK Corporate Governance Code may choke into their board-room coffee at the demands for strict adherence to a nine year tenure limit as a measure of independence. Likewise, CDP’s combative ‘disclose to CDP or you’re out’ stance is unlikely to assuage issuers coming to terms with rapidly evolving sustainability management and reporting requirements. Equally, the notion that CDP (or any research vendor, Manifest included) should hold the trump card on the election of Chairs at FTSE350 companies is likely to sit uncomfortably with many.

But dwelling on these concerns would be to miss point: transparency in the institutional investment chain leaves much to be desired, and trustees need full support in terms of time, information and knowledge. In that spirit, the Red Line Voting project and its underlying principles is to be welcomed.

Indeed, over the past 15 years of in-depth  fund manager vote monitoring using Manifest’s Governance Watch service for asset owners, we have seen at first hand just how much pension funds need and want to be able to better understand how their fund managers use their voting rights as a part of the stewardship process. Without doubt, the fundamental challenge is a very large information imbalance.

This imbalance is exacerbated by the relative lack of resourcing afforded to responsible investment. The regulatory fall-out from the Global Financial Crisis has led to deeper understandings of the causes of the crisis and the revelations of system-wide governance failings unearthed during the reform process bring to mind a more poignant and apt interpretation of the term ‘Red Lines’.

Originally, the term ‘Thin Red Line’ derived from an account of the Battle of Balaklava in the Crimean War, immortalised in Rudyard Kipling’s poem Tommy. It has since has become a figure of speech for any thinly spread military unit holding firm against attack. In light of the intense downward pressure on resourcing responsible investment in the investment chain, such an image is (sadly) helpful in understanding the nature of the challenge faced by trustees.

For its part, Manifest has the tools, knowledge and proven experience needed to support asset owners and asset managers alike.  Manifest provides the independent and objective information advantage needed to implement and manage Red Lines and in the New Year, Manifest will be presenting Red Lines Monitor in readiness for the 2016 AGM season.

Red Lines Monitor, a new online service based on our GovernanceWatch technology and knowledge infrastructure, will support both pension funds in understanding their fund manager voting, and fund managers in reporting and explaining their voting approach. Whether you are an AMNT member, PLSA member of an asset manager, Red Lines Monitor will support your Red Lines implementation.

To find out more about Manifest Red Lines Monitor, simply register your interest by sending a quick email to

Last Updated: 11 December 2015


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