* ShareAction study finds wide spread in voting patterns
* Some backed managements most times in "controversial"votes
* Fund firms fight back, say company engagement crucial
By Simon Jessop and Sinead Cruise
LONDON, May 18 (Reuters) - Some asset managers sided withcompany managements too often in contentious votes at annualgeneral meetings last year, according to campaign groupShareAction which suggested they were not fulfilling stewardshipresponsibilities to clients.
But the fund firms defended their positions, saying that -unlike many investors - they engaged with companies throughoutthe year to ensure boards were held to account.
Since the financial crisis, politicians and regulators havesought to encourage asset managers to be better stewards of theshares they manage on behalf of clients, to ensure companies arewell run and maximise returns for investors.
While the number of votes needed to vote down a companyresolution can vary, the actions of the asset managers iscrucial as they often hold quite large blocks of votes.
ShareAction, a shareholder activist group, compared therecords of Britain's 33 largest fund firms - which manage 13.8trillion pounds in assets - in a series of "controversial"votes, defined as resolutions put forward by UK companies thatattracted more than 30 percent of dissent among investors.
Nine votes saw that level of opposition in 2014, andShareAction chose the eight that related to pay or boardcomposition.
It found a wide spread of votes among the asset managers.
But it highlighted that six asset managers, including M&G, Hermes Investment Management and Aberdeen AssetManagement, were found to have backed company managements inmost of the votes, "despite apparent problems with the proposedresolution".
"Our survey suggests a wide range of big names in assetmanagement aren't exercising their stewardship responsibilitiesat some of the world's biggest companies," said ShareActionChief Executive Catherine Howarth.
At the other end of the scale, however, some asset managers,including Columbia Threadneedle Investments, Alliance Bernstein,Aviva Investors and Goldman Sachs Asset Management,opposed management or abstained in each of the eight votes.
Hermes said it voted at more than 10,500 company meetings in2014 and engaged with more than 400 companies in more than 50countries. "Our approach to engagement, including voting, asdirected by our clients is with the objective of achievingbeneficial change, not to mount a campaign or 'box tick'," saidExecutive Director Leon Kamhi.
M&G also said it preferred to engage with companies beforepotentially voting against them, if needed. "Successfulstewardship is not demonstrated by the frequency of votesagainst AGM resolutions," a spokesman said.
Paul Lee, head of corporate governance at Aberdeen AssetManagement, said: "We are prepared to be tough when we believe acompany is doing the wrong thing or when change is required, bethat in our regular discussions with management and the board orat the AGM."
(Editing by Pravin Char)