Statement of Compliance with the UK Stewardship Code
Tokio Marine Asset Management (London) Limited (‘TMAL’) is the European subsidiary of Tokio Marine Asset Management Co., Ltd., Tokyo ('TMA')[1], whose parent company is Tokio Marine & Nichido Fire Insurance Co. Ltd., one of the largest non-life insurance companies in Japan.
The Tokio Marine Asset Management group (‘TMA group’) has been managing assets on behalf of our client base since 1985 and employs over 200 people in Tokyo, Singapore, London, New York and Shanghai.
TMA's London subsidiary provides investment management, business development and client servicing to European institutional investors including distribution of performance for investment products managed out of Tokyo and Singapore, as well as distribution of market analysis from TMA's investment professionals in Asia.
The following statement has been prepared to demonstrate TMAL’s agreement to the Stewardship Code, which was launched by the Financial Reporting Council in July 2010. Our statement set out the approach taken to the key recommendations of the UK Stewardship Code.
Any questions on this statement of our approach to stewardship more generally should be addressed via our enquiry form.
- Principle 1: Institutional investment firms should publicly disclose their policy on how they will discharge their stewardship responsibilities.
How we discharge our stewardship responsibilities
TMAL supports the UK Stewardship Code and believes that regular dialogue with investee companies is an important component of investment process and helps develop knowledge of the investee’s business strategy, future prospects, corporate governance, board cohesion and attitude to risk.
We believe that proxy voting is the principal fundamental measure for communication with corporate management. Therefore, we aim to discharge our stewardship responsibilities by ensuring that TMA who conduct proxy voting on our behalf has clear voting policies and standards.
- Principle 2: Institutional investment firms should have a robust policy on managing conflicts of interest in relation to stewardship and this policy should be publicly disclosed.
Our policy for managing conflicts of interests
We may encounter conflicts of interest in respect of fulfilling its stewardship responsibilities. It is our duty to act in the best interests of all its clients. Therefore, we have implemented conflicts of interest procedures when engaging with investee companies and to ensure the appropriate handling of proxy voting decisions where there is a potential conflict of interest. As required by the Financial Services Authority (FSA), TMAL has in place a conflicts of interest policy and register.
- Principle 3: Institutional investment firms should monitor their investee companies
How we monitor our investee companies
TMAL recognises the importance of effective communication. The monitoring process largely comprises analysing company announcements and news flow, investment screening and studying external analytical research. Through these research activities we decide if a dialogue with the company is necessary. We review the effectiveness of our monitoring processes.
- Principle 4: Institutional investment firms should establish clear guidelines on when and how they will escalate their activities as a method of protecting and enhancing shareholder value.
Our guidelines for escalating engagement
We endeavour to maintain dialogue with investee companies. We will continue our dialogue with the company over an extended period if necessary.
Effective dialogue with investee companies provides the opportunity to discuss events or concerns as they arise. In the rare event that concerns are not addressed through such communication, we may consider to escalate the level of engagement.
- Principle 5: Institutional investment firms should be willing to act collectively with other investment firms where appropriate
Our willingness to act collectively with other investors
We believe that our thorough research process and long term investment philosophy will rarely lead to a situation where such engagement will be deemed necessary. Collective engagement may however be considered where such action is regarded to be in the best interest of our clients.
- Principle 6: Institutional investment firms should have a clear policy on voting and disclosure of voting activity
Our policy on voting and voting disclosure
Proxy voting judgments are made according to TMA Proxy Voting Policy. When acting on behalf of clients, portfolio managers and specialists adhere to the corporate governance principles, proxy voting policy and standards stated above, using proxy voting service vendors to assist in assessing the corporate governance of investee companies.
More detail on our policy to exercise Voting rights can be on found on http://www.tokiomarineam.com/investment_approach/voting_rights.html
- Principle 7: Institutional investment firms should report periodically on their stewardship and voting activities
How we report on stewardship to our clients
Depending on clients’ needs we prepare periodical reports, available to our clients. The content of these reports may vary subject to the requirements of individual clients. Our voting policy is available on our website.
[1] TMA follows the United Nations-backed Principles for Responsible Investment. These Principles provide a voluntary framework by which all investors can incorporate ESG issues into their decision-making and ownership practices and so better align their objectives with those of society at large.
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