2021 ESG Annual Report

Approach to Proxy Voting

We believe that proxy voting is an integral aspect of investment management. Accordingly, proxy voting must be conducted with the same degree of prudence and loyalty accorded any fiduciary or other obligation of an investment manager. Neuberger Berman has developed custom Proxy Voting Guidelines that comprehensively lay out our voting positions, including the potential financial impact on a company from corporate governance, environmental and social issues. These Guidelines are updated as deemed appropriate and reviewed at least on an annual basis.

Bringing Transparency and Accountability to Proxy Voting In 2020, we launched NB Votes, an advance proxy vote disclosure initiative in which our firm announces our voting intentions in advance of the annual general meetings (AGMs) of a select group of companies in which we invest on behalf of clients. In 2021, we disclosed key votes and supporting rationales at 62 of our portfolio companies, double the amount disclosed in 2020.

The 2021 proxy season showcased important trends in shareholder engagement and active measures to improve company disclosures and policies around a range of issues. The number of proposals increased from 2020, as did shareholder support. Moreover, the array of matters expanded, with an increased focus on environmental and social issues. The backdrop for this momentum was the truly extraordinary period we have been living through—the challenges of the COVID-19 pandemic, calls for racial justice and reduced inequality, and the growing urgency of climate change. In this environment of greater engagement between shareholders and boards, we accelerated our efforts around NB Votes. Now in its second year, this program seeks to amplify our voice by pre-announcing a select array of our voting choices balanced across issues and with a balance of votes in support and against management recommendations. The program underscores our commitment to bringing more transparency into the proxy voting decision-making process and, while we remain the only large asset manager providing regular advanced disclosure, we encourage others to do the same to create a better- functioning system.

Our goals are as follows: • Encourage the companies we invest in to take steps to enhance long- term value for our clients • Improve the transparency of our voting process, for the benefit of clients and the companies • Demonstrate the fundamental, long-term focus of our investment teams, which informs our vote decisions In 2021, we disclosed votes at 62 of our portfolio companies where our clients had material economic exposure and where we identified significant issues for our clients. Of our votes disclosed in advance, we took positions against management 48% of the time and for management 52% of the time. A particular outcome in regard to supporting or opposing management was not our goal, but rather we vote in the best interest of our clients, including where we wanted to make our position known, with the understanding that the process of modifying policies and practices may take more than one “bite at the apple”.



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