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Asia can ‘leapfrog’ other regions in stewardship

Jane Ho, head of stewardship at BNP Paribas Asset Management, explains how Asia can learn from other region's efforts.
Jane Ho, BNP Paribas Asset Management

Asia has the opportunity to “leapfrog” other regions in terms of stewardship, according to Jane Ho, head of stewardship for Asia Pacific at BNP Paribas Asset Management.

Ho was discussing the progress Asia can potentially make in the context of recent figures for this year’s annual general voting season, which revealed that the French asset manager had an average opposition rate across all resolutions of 37%, although for Asia, this was slightly higher at 44%.

Both the figures globally and for the region rose this year after BNP Paribas AM increased its minimum threshold required for female board membership to 35% in Europe and North America and 20% in Asia, the Middle East and Latin America.

The issue of board membership in Asia has been quite topical after Hong Kong Exchanges and Clearing (HKEX), the Hong Kong bourse, introduced new rules that will require listed companies to have at least one female board member by the end of next year.

The move has drawn praise from a number of market commentators as an example of effective top-down regulations, although many have also expressed consternation that the requirement of just one female board member is not enough.

Ho praised the efforts of HKEX and also actions taken by a number of Chinese corporates such as Tencent and Meituan in addressing gender diversity.

She also acknowledged that in relation to ESG considerations generally, Asia was playing catch up but there was an opportunity to learn from best practice elsewhere and surpass other regions eventually.

“Obviously Asia started a little bit behind but maybe partly as indicated by those voting figures, we do have an opportunity to leapfrog. You can share global best practice from Europe,” she said.

“I think more broadly in Asia, companies are quite receptive to that in terms of the sharing of global best practice by international asset managers such as ourselves. So that’s a very positive thing.”

BNP Paribas AM has one of the strictest approaches to stewardship among its peers, at least based on its opposition rates. Not only will it vote against companies if they fail to meet their targets for gender diversity on boards (although Ho said there was some flexibility for companies that fell short of the threshold but showed a willingness to change), but the asset manager also votes against routine items over climate matters, for example companies that fail to disclose their GHG emissions (usually scope 1 and 2, although this can apply to scope 3 as well sometimes).

In relation to climate, Ho is sanguine about the progress that BNP Paribas AM has made with its engagement, although she noted that a lot of this has been achieved through banding together with other asset owners through Climate Action 100+, in particular.

“We have found this to be very effective, working together with others because we know we can’t solve climate by ourselves. As an ecosystem, it’s very positive as well depending on the jurisdiction and the company (and you’d appreciate that being in Asia), to have international investors working together and sharing resources with domestic investors to form an aligned view to the companies,” she said.

One recent development in Asia she is not fond about though is the increase in virtual AGMs. A lot of regulators permitted them during the pandemic, although she said she was not in favour of them.

“A lot of countries have allowed this to take place even without an emergency clause. We are quite against that. There are many reasons for that. One is that we feel the board should really be in front of shareholders and take our questions in person. I think we all acknowledge that does make a difference,” she said.

Part of the Mark Allen Group.