Furthermore to our acceptance of the original Stewardship Code in 2014; Strategic Capital, Inc. (hereinafter referred to as the “SC”) hereby revised our acceptance of “The Code of Responsible Institutional Investors” (The Japan Stewardship Code).
fulfils the stewardship responsibilities as follows;
- Institutional investors should have a clear policy on how to fulfil their stewardship
responsibilities and publicly disclose it.
- SC fully adheres to the responsibility to maximize return on investment in the medium
to long term for our investor clients.
- To achieve our goal, SC shall establish dialogue with the investee companies to
contribute to improvement of shareholders value. SC may continue dialogue
assertively until the proposal content to improve shareholders value is implemented.
- SC believes such investment activity is required to improve the shareholder value of
investee companies, and that the performance of investment returns will increase as a
result of such active engagement. SC also believes these investment methods should
contribute to the overall economic growth and expansion of the Japanese economy.
- Institutional investors should have a clear policy on how they manage conflicts of
interest in fulfilling their stewardship responsibilities and publicly disclose it.
- Since SC is an independent organization and there are no subsidiaries or affiliated
companies of the investment firm, as such there are no conflicts of interest between
SC and investee companies.
- SC does not allow proprietary trading of any securities in principal under our internal
policy and guidelines. Thus there are no conflicts of interest in the principal accounts
and the accounts of managed assets.
- In principal, internal rules are stipulated to prohibit; transactions between funds,
transactions between the investment management company and funds, and
investments of SC affiliated persons in the shares of investee companies.
- For the above reasons, SC has no Independent Directors or third-party committee for
decision-making or oversight of exercising voting rights.
- Institutional investors should monitor investee companies so they can appropriately
fulfil their stewardship responsibilities with an orientation towards the sustainable
growth of the companies.
- SC continues unwavering efforts to foster the sustainable growth of the corporate
value of investee companies.
- SC shall endeavor to understand the condition of companies in which the fund(s)
invest through the prompt and thorough analysis of all timely public disclosure such as
financial statements and other releases.
- Depending on our analysis, SC will gather information on the industry and market that
the investee companies belong to from external resources.
- SC shall endeavor to understand the management of investee companies and engage
in constructive dialogue with the management of such companies (CEO, Independent
Directors, etc.) and the person(s) in charge of Investor Relations of these corporations.
SC believes dialogue with the top management of investee companies is the most
important aspect of engagement.
- Institutional investors should seek to arrive at a common understanding with investee
companies and work to solve problems through engagement with purpose.
- As previously mentioned, SC believes dialogue with the top management of investee
companies is the most important aspect in our investments. SC continues to make the
best effort to mutually understand and maintain a productive relationship with
- SC shall consider exercising some of the privileges of shareholders under the Japanese
Company Act and regulations in order to satisfy SC’s stewardship responsibilities. The
following are such cases:
- The top management of investee companies refuse to meet with SC.
- The investee company does not accept proposals which benefit the company
and increase corporate value.
- The management policy of investee companies might damage their corporate
value and/or future corporate value.
- SC can proactively engage in collective engagement if there are other institutional
investors who can cooperate with us to create corporate value.
- With respect to the dialogue we establish with the investee companies, SC does not
attempt to acquire information not yet publicly available. Despite the above
mentioned purpose, it is possible SC could, unintentionally, obtain non-public
information. If this is to occur, SC will not participate in any stock trading of the
company in accordance with the law until such information will become public. If
necessary, SC will request the company to disclose such information publically.
- Institutional investors should have a clear policy on voting and disclosure of voting
activity. The policy on voting should not be comprised of only a mechanical checklist,
but should be designed to contribute to the sustainable growth of an investee
- SC understands proxy voting rights are basic rights of shareholders at the General
Meeting of Shareholders. SC shall exercise proxy voting rights to contribute to
maximizing the shareholders’ value of investee companies.
- In compliance with SC’s proxy voting policy as disclosed on our website, SC will
examine all the agenda contents individually and exercise voting rights.
- The results of the exercise of voting rights will be announced on SC’s website including
the reasons for voting.
- However, to protect the interests of clients, SC may chose not to disclose voting
activity where the funds shareholding of an investee company is not already publically
disclosed to the market.
- Although SC does not plan to appoint advisors for exercising proxy voting rights, SC
would provide appropriate information to such an advisory firm if required.
- Institutional investors in principle should report periodically on how they fulfil their
stewardship responsibilities, including voting responsibilities, to their clients and
- SC discloses dialogue as well and the approach to engagement with major investee
companies to clients periodically in investment reports.
- To contribute positively to the sustainable growth of investee companies, institutional
investors should have in-depth knowledge of the investee companies, their business
environment, skills, and resources needed to appropriately engage with the companies
to make proper judgments in fulfilling their stewardship activities.
- Before conducting meetings with an investee company, SC shall endeavor to acquire
and analyze all publicly available information on the company and ongoing trends in
- SC will exchange opinions with other shareholders of the investee company if it is
necessary to improve the corporate value of the company.
- When SC executes a right to submit shareholder proposals to the investee company at
the shareholders meeting, SC may share our thoughts and explain the actions we feel
it is necessary to take.
- June 2014, Enactment
- July 2017, Revision