Proxy Voting


Rally Total Impact Fund and Rally Global Equities Impact Fund both hold shares in public companies. Shareholders have the right to vote on proposals at company annual and special meetings. At Rally, we are active investors and we use voting opportunities as one way to engage with companies to support positively impactful practices. 

We do it through ‘proxy voting,’ which simply means we don’t attend the meetings in person but cast our vote ‘by proxy’ in advance.

Traditional investors are often invested in companies that have harmful practices. Such investors often use proxy voting to try to change those harmful practices. Because we are impact investors, investing only in companies that are already positively impactful, really for us proxy voting is about spurring an already good company to be even better.

We undertake proxy voting in house, guided by our proxy voting guidelines. The guidelines are comprehensive, to cover issues such as executive compensation, a company’s impact on employees and impact on the environment, shareholder rights and corporate stewardship. To illustrate, the following are some of our environment-related proxy voting guidelines:

  • We will vote for proposals that ask companies to adopt the UN Global Compact or another set of environmental standards as long as these standards are at least as stringent as those in the UN Global Compact
  • We will vote for proposals that ask companies to improve their environmental performance, as long as the action requested is based on sound evidence, can realistically be achieved by the company, does not hurt the company’s long-term performance and is not detrimental to the interests of its stakeholders
  • We will vote for reasonable proposals calling for companies to improve oversight, management and reduction of their carbon emissions. This includes setting clear performance targets aligned with the Paris Agreement
  • We will vote for reasonable proposals that encourage boards and management to disclose steps they are taking to address climate-related risks
  • We will vote for proposals that ask companies to conserve water or to improve how they manage their use of water, provided the proposal would not be detrimental to the company or its stakeholders in the long term
  • We will vote for proposals for greater disclosure of companies’ potential risks related to their use and disposal of water and effects on water, and their plans to address those risks

2021 Voting Overview


2021 was our first year of casting votes.

326 Proposals
Almost half of the votes concerned the election of directors and 13% concerned executive compensation. Other topics included the amendment of company articles, dividend allocation, employee share ownership, board size and even climate action and human rights.

We voted with management 70% of the time; against, 30% of the time.

Case Study: Auditor Independence

Auditor independence is vital to shareholders. A company’s annual financial statement is usually the only independently verified information shareholders have about the company’s performance and financial condition. Shareholders must be confident that they can rely on this information and that the independence of the auditors who reviewed the information has not been compromised.

  • From time to time, companies engage their external auditors to provide them with tax advice or other services. We believe that hiring the external auditor to perform other work has the potential to compromise the independence of those auditors. We strongly prefer auditors that do not perform services for a corporation other than the annual audit. We will vote against auditors if more than 25% of the fees paid to the auditors in the previous year were for services other than the annual audit.
  • Companies that use the same accounting firm and audit partner to conduct their audits for long periods of time run the risk of developing too close a relationship that can compromise the independence of their annual audit. At a minimum, companies should change their audit partner every seven years, regardless of whether or not they are required to do so by law. We will vote against the auditors if the company has kept the same audit partner for more than seven years.

In 2021, there were 21 ballots related to auditor appointment. Of these, we voted against management 15 times (71%). Of these votes, 14 were because the auditor tenure was over seven years and 2 were because over 25% of fees were for services other than the annual audit.

Case Study: Climate Action Policy

A company’s environmental performance has a material effect on its profitability. Environmental damage, in addition to exacerbating the already fragile and precarious state of the planet, carries material risks, such as legal liability and a damaged reputation. Sound environmental practices, on the other hand, can improve a company’s financial performance and its reputation as well as reducing its environmental footprint. The consequences of climate change are material risks that investors and businesses of all kinds must address. Companies are under increased pressure from their investors to reduce their carbon emissions in order to meet the targets of the Paris Agreement, intended to limit the increase in global temperatures to 1.5-2°C above pre-industrial levels.

  • Companies need to consider their long-term business plans and capital expenditures to adapt to a low-carbon economy and lower future demand for fossil fuels. We will vote for reasonable proposals that encourage boards and management to disclose steps they are taking to address climate-related risks.
  • Reducing carbon emissions can also benefit a company by reducing its energy use and costs, lowering its exposure to climate change risks and positioning it to benefit from carbon credits. We will vote for reasonable proposals calling for companies to improve oversight, management and reduction of their carbon emissions. This includes setting clear performance targets aligned with the Paris Agreement.

In 2021, one of our public company investments put forth a resolution to approve, on a consultative basis, its Climate Action Policy. The Climate Action Policy sets out the long-term objective of neutrality in greenhouse gas emissions, as well as the company’s major principles and positions in this area. The priority lines of action included:

  • Setting short- medium- and long-term emission mitigation targets in line with the Paris Agreement
  • Contributing to the electrification of the economy by supporting regulatory legal initiatives aimed at increased electrification of consumer uses of the economy, promoting the “polluter pays” principle, eliminating subsidies to high emission industries, and promoting the replacement of fossil fuel energy generation systems
  • Integrating climate science and adaptation and resilience standards in the design, construction and management of energy generation, storage and distribution networks and infrastructure
  • Formalising agreements and work with multilateral bodies and civil society organisations, with particular engagement in the fight against climate change, and particularly the UN Framework Convention on Climate Change
  • Leading the main international indices on the fight against climate change

We supported this resolution at the company’s AGM in June 2021, in line with management recommendations.

Case Study: Proxy Access

Shareholders should have the right to nominate directors provided that the nominees are well-qualified and prepared to act in the interests of all shareholders. In order to nominate directors, a shareholder or group of shareholders should be required to hold enough shares to have a meaningful stake in the company but not so many as to be prohibitive for most shareholders. Shareholders should be permitted to nominate no less than one-quarter of the board seats.

  •  We will vote for proposals to allow shareholders to nominate directors if they include an ownership threshold that is reasonable given the number of shares outstanding.
  • We will also vote for proposals to give equal treatment in proxy materials to shareholder and board nominees for director.

Three of our portfolio companies had a shareholder proposal related to proxy access. In all three cases, the proposal requested the removal of the current limit of 20 shareholders to reach the minimum threshold of 3% required to nominate a director. Removing the current limit of 20 shareholders would enhance the rights of shareholders, particularly smaller shareholders.

Although all three proposals only requested the removal of this 20-shareholder cap, we noted that in each case the company’s current policy only allowed shareholders to nominate 20% of board seats, which is lower than our preference of no less than 25%. That said, we were in support of the specific change proposed by the shareholders and voted in favour of all three proposals.