CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Governance Influencers

Narmada Motors Ltd. proposes to pay its promoter-chairman remuneration that raises shareholder concern. A large mutual fund, which holds 6% shares, votes against after consulting its stewardship policy, and discloses its vote in its annual voting disclosure. Which stewardship feature does this best illustrate?

This illustrates active stewardship: the fund followed a stewardship policy, evaluated the remuneration proposal, voted against it, and publicly disclosed its vote. Such engagement and transparency in voting are core expectations of institutional investors acting as governance influencers.

AInsider trading prevention
BActive engagement and transparent voting disclosure by an institutional investorCorrect
CPassive indexing with no voting
DSqueeze-out of minority holders

Explanation

Stewardship codes expect institutions to have a policy, monitor investee companies, vote responsibly and disclose voting. The fund did exactly this. Passive non-voting would contradict the facts.

Did you get it right without looking?

One question tells you little. A timed set on Governance Influencers shows your real accuracy, how long you take and where you lose marks.

Practise Governance Influencers Free diagnostic mock

More Governance Influencers questions