Japan's Stewardship Code
Strategic Capital Inc. announces: as a “responsible institutional investor” we accept Japan’s Stewardship Code (the “Code” hereinafter).
Strategic Capital Inc. as an institutional investment firm performs its stewardship responsibilities in investing the Japanese publicly held corporations.
Strategic Capital Inc. (“SCI”) understands and fulfils the stewardship responsibilities, in the following:
“Principles for Responsible Institutional Investors (Japan's Stewardship Code)”
- Institutional investors should have a clear policy on how to fulfil their stewardship responsibilities and publicly disclose it.
- Strategic Capital Inc. has full responsibilities to maximize return on investments of the medium to long term returns for our clients.
- To achieve our goal, SCI shall establish dialogs aggressively with the investee companies and contribute to improve the shareholders’ value.
- We believe such investment activities require improving the shareholder value of the companies in which we invest. As a result, the performance of investment return will further expand. We also believe these investment methods should contribute to the Japans overall economic growth and expansion.
- Institutiol investors should have a clear policy on how they manage conflicts of interest in fulfilling their stewardship responsibilities and publicly disclose it.
- Since SCI is an independent organization, there are no conflicts of interest between us and the investee companies.
We do not allow proprietary trading of any securities under our internal policy and guidelines. Thus there are no conflicts of interest in the principal accounts and the accounts of managed assets.
Within the transactions between the funds we manage and our employees, or any other affiliated persons in our organization, SCI has established specific internal rules and guidelines that have been implemented to avoid possible conflicts of interests.
- Institutional investors should monitor investee companies so they can appropriately fulfil their stewardship responsibilities with an orientation towards the sustainable growth of the companies.
- SCI as a “responsible institutional investor” accepts this Code, and will continue our efforts to foster sustainable growth in the corporate value of the investee companies.
- The investment decision making of SCI shall endeavour to understand the condition of companies in which we invest through activities such as financial statement analysis of and interviews with investee companies.
- Depending on our analysis, we will gather information such as the activities of industries that the investee companies belong to from external resources.
- SCI shall endeavour to understand the management of investee companies and engage in constructive dialogue with the management of such companies (CEO etc.) and the person(s) in charge of Investor Relations of these corporations. We believe dialogue with the top management of investee companies is the most important aspect of our investments.
- Institutional investors should seek to arrive at a common understanding with and work to solve problems through constructive engagement with investee companies.
- As previously mentioned, we believe dialogue with the top management of investee companies is the most important aspect in our investments. We continue to make the best effort to mutually understand and maintain a productive relationship with investee companies.
- SCI shall consider exercising some of the privileges of shareholders under the Japanese Company Laws and regulations in order to satisfy our stewardship responsibilities. The following are such cases:
- The top management of investee companies refuse to meet with SCI
- The investee company do not accept SCI’s shareholder proposals to benefit the company for increasing its corporate value.
- The management policy of investee companies might damage their corporate values and/or future corporate value.
- With respect to the dialogue we establish with the investee companies, we are not attempting to acquire information not yet publically available.
- Despite the above mentioned purpose, it is possible we could, unintentionally, obtain non-publicly announced information. If this is to occur, we will not participate in any stock trading or transactions that are affiliated with the corporation and will strictly comply with all internally established rules and guidelines.
- 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 investee companies.
- SCI understands proxy voting rights are basic rights of shareholders at General Meeting of Shareholders. SCI shall exercise proxy voting rights to contribute to maximizing the corporate value.
- Complying with SCI’s proxy voting policy, disclosed on our website, we exercise each proxy voting right after scrutinizing targeted shareholder proposals.
- Although SCI is not planning to deploy advisors for exercising proxy voting rights, we would provide appropriate information to such advisory firm.
- Institutional investors in principle should report periodically on how they fulfil their stewardship responsibilities, including voting responsibilities, to their clients and beneficiaries.
- SCI introduces and discloses dialogs as well as engagement with major investee companies to our clients in our investment reports, periodically.
- Proxy voting results, together with the main points of each engagement activity with investee companies, shall be disclosed on our website.
- 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, SCI shall endeavour to acquire and analyse all publically available information on the company and ongoing industry trends in their industry.
- SCI will exchange opinions with other investors of the investee company if it is necessary to improve corporate values of our investments.
- When SCI executes a right to submit shareholder proposals to the investee company at the shareholders meeting, we will share our thoughts and explain the actions we feel necessary to take.