Home Court Advantage

Institutional investors take varying approaches to global stewardship, some adopting a global benchmark, while others tune their approach through dedicated regional policies or employing a local stewardship team to adjust to local norms with “boots on the ground”. 

In investors’ home market, anecdotal evidence indicates that asset managers pay particularly close attention to the performance and governance of companies. In Germany, local active investors like Deka and Universal Investments commonly make public remarks about German companies – Bayer, Adidas, and Siemens, to name a few - but refrain from doing so elsewhere. Similar behaviours are seen in other European and global markets.

This prompts us to question:

Do asset managers steward companies in their local market the same as those abroad?

To answer this question, we used AQTION’s voting data statistics tool. Using the ReSearch function within the voting module, we can quickly access how particular investors vote on specific types of proposals in a given index over a defined timeframe. The table below showcases the output – the proportion of director election proposals supported by three of the largest investors from four countries across the main indices from those four countries, from January 2023 to December 2024.

Table 1: Vote Statistics: Proportion of Support for Director Elections per investor in each index (Jan-23 to Dec-24)

• All three German investors give wide support for director elections in the UK market. While DWS approve nearly all director elections in the US, Deka withhold its support here the most. DWS and Allianz GI are the harshest in Germany, whereas Deka vote harshest in the US and more favourably in Germany.
• All three French investors give wide support for director elections in the UK market. While AXA IM supports director elections in the US similarly to at French companies, BNP Paribas AM and Amundi AM are considerably harsher in the US market (notably, BNP Paribas AM support less than half of director elections in the US); a similar trend is seen to a lesser extent in Germany. 
• All three UK investors give wide support for director elections in the UK market, giving the lowest average support to director elections at German companies. Outside of the UK, LGIM are most common to withhold support, the lowest being in France. Relative to non-UK markets, US companies receive favourable treatment from all three investors.
• All three US investors give wide support for director elections in the US and UK markets, withholding support more greatly in France and Germany – BlackRock and Fidelity showing little difference between these two markets, with T. Rowe being more supportive in France.

From this foundation, we can then look at the relative differences in voting behaviours across the markets and take the average for each regional group of investors.

Relative Vote Difference in each Market, Averaged Across Investor Regions

• German investors behave in line with non-local investors in their home market.
• French investors are more supportive in their home market relative to non-local investors.
• UK investors are more supportive in their home market relative to non-local investors.  
• US investors are more supportive in their home market relative to non-local investors.  

Concluding Remarks

The voting statistics show that investors tend to be more supportive of director elections in their home market despite anecdotal evidence of public statements, which could be extrapolated to the depth of private engagement, creating an image of higher standards of accountability. The apparent inverse relationship may relate to sensitivities around the size of ownership and level of influence domestic investors have in their home markets, incentivising impact through dialogue rather than binary votes. Investors are also more likely to have relationships with local companies and other institutions (including governments), which could impact voting behaviours.

In addition, topics emerging from engagement may not always be aligned with reasons to vote against directors, especially when comparing active and passive investors, and the mandates of stewardship teams versus portfolio managers.

Votes can be misinterpreted, whereas direct engagement and understanding the expectations of institutional investors are key, regardless of a company’s origin or the location of its investors.