About stewardship activities

We have established the "Basic Policy on Stewardship Activities," based on which we have developed and published various policies on our website, including:
･"ESG Investment Policy" including considerations of sustainability
･"Policy for Constructive Dialogue with Companies, etc.," which specifies constructive and purposeful dialogue with investee companies
･"Policy on the Exercise of Voting Rights," which specifies the exercise of voting rights

To fulfill our fiduciary responsibilities, we have established the "Policy on Customer-First Business Operations" to prioritize the interests of our clients. We have also developed the "Policy on Conflict of Interest Management" to prevent any unjustified harm to our clients' interests.

In conducting stewardship activities, we have established a "Stewardship Committee" within the Asset Management Division to ensure a clear separation between business management and asset management. The Stewardship Committe, which is led by the Chief Investment Officer (CIO) and consists of relevant individuals from the Asset Management Division involved in stewardship activities, sets the policies associated with stewardship activities.
In addition, the "Stewardship Supervisory Committee" (hereinafter referred to as the "Supervisory Committee"), which consists of outside board directors and legal compliance officers responsible for conflict of interest management, supervises overall stewardship activities, reports to the Board of Directors, and makes recommendations for improving stewardship activities as necessary. To ensure independence from management and execution and perform its check function, the Supervisory Committee requires at least half of its members, including the chairperson, to be outside board directors.

Regarding the exercise of voting rights, we manage the exercise of voting rights toward companies with which we currently have capital relationships (affiliates of Daiwa Securities Group Inc. Main Office) and companies with which we have business relationships (distributors of our company's investment trusts and their parent companies), and monitor specific companies where conflicts of interest may arise.

We have traditionally regarded research on companies as one of the core operations of asset management companies. Centered around our corporate research analysts, we utilize both internal and external information networks to gather information continuously and broadly, striving to accurately understand the circumstances of companies and other entities.

In addition, the "Policy for Constructive Dialogue with Companies, etc." stipulates important items to focus on in dialogue with companies and other entities. Our corporate research analysts, fund managers, and corporate governance personnel engage in dialogue from various standpoints with these companies. We strive to internally share insights gained through dialogue and promptly identify any matters that may pose a risk of impairing corporate value.

Based on the "Basic Policy on Stewardship Activities," we have established the "Policy for Constructive Dialogue with Companies, etc."

Corporate research analysts, fund managers, and corporate governance personnel engage in dialogue based on the "Policy for Constructive Dialogue with Companies, etc.," striving to share recognition with companies to enhance their mid- to long-term value and sustainability.

Basically, we engage in dialogue with companies independently, regardless of whether it relates to active or passive management. We also consider collaborating with other institutional investors as "collaborative engagement."

Based on the "Policy for Constructive Dialogue with Companies, etc.," we do not accept any undisclosed material information (material facts) from companies during dialogue.

Based on the "Basic Policy on Stewardship Activities," we have established the "Policy on the Exercise of Voting Rights."

We believe that enhancing the predictability of our voting rights exercise and ensuring that companies understand the reasons for our support or opposition contribute to constructive dialogue with those companies. For this reason, we disclose detailed criteria for our votes in support or opposition. Additionally, we engage in dialogue with companies as necessary to determine our support or opposition. For proposals where our voting decisions differ from our support or opposition criteria, or where individual judgments are made according to our policy, we provide the reasons for those decisions when disclosing the results of our voting rights exercise. We will continue to strive to clearly disclose reasons for our proposals which we determine require such disclosure.

For specific companies where conflicts of interest may arise, we will exercise our voting rights based on the "Policy on the Exercise of Voting Rights." For proposals requiring individual judgment under this policy, we will apply advice from an external specialized organization (Glass, Lewis & Co., LLC) to exercise our voting rights, thereby ensuring the elimination of conflicts of interest and the neutrality of our voting decisions.

In stock lending transactions, there may be instances where the record date for voting rights is crossed. Even in such cases, we will manage the situation to ensure that valid voting rights are secured in accordance with the nature of our proposals.

We regularly publish reports that summarize the key content of our stewardship activities.

From the perspective of separating management, execution and operations, we have established the independent "Stewardship Committee" within the Asset Management Division to oversee the stewardship activities of our company. In addition, the Stewardship Supervisory Committee, more than half of the members of which are outside directors, ensures independence from management and execution while performing a check function over all stewardship activities.

In our stewardship activities, we continuously strive to enhance our capabilities for appropriate dialogue and decision-making by sharing information and insights regarding the financial, non-financial, and sustainability aspects of companies obtained by our corporate research analysts, fund managers, and corporate governance personnel from their standpoint.

Furthermore, we have set "contribution to a sustainable society" as one of our guiding principles, and we are systematically working to contribute to the sustainable growth of society. We regularly conduct self-assessments of our implementation of the code and publish the results of these assessments through our reports.