Our Approach to Proxy Voting
1. Basic Approach to Exercising Voting Rights
Asset Management One Co., Ltd.（the “Company”）has adopted “Creating the future through the power of investment” as its corporate message, and seeks to help realise solutions to social issues and the sustainable enhancement of the corporate value of investee companies by encouraging the optimal allocation of society’s resources. On this basis, we position the exercise of voting rights as one of our most important initiatives. We reflect the environmental, social and corporate governance materiality issues and focus areas identified by the Company in our engagement and proxy voting activities, and exercise voting rights so that corporate management is conducted in a manner that supports both the sustainable development of society and the enhancement of corporate value.
2. Governance of Proxy Voting （including the conflict-of-interest management framework）
In exercising voting rights, we establish proxy voting guidelines as set out below in accordance with the basic approach described in “1. Basic Approach to Exercising Voting Rights” above. We also review these guidelines as appropriate in light of changes in the economic and social environment so that they remain effective and aligned with the long-term interests of shareholders.
A. Governance Framework for Exercising Voting Rights
AM-One is committed to conduct voting activities in a fair and intelligent manner, following the basic policies and detailed guidelines & criteria set for each voting items. We pay particular attention to the occurrence of legal & regulatory violations, scandals and other contentious or high-profile cases where a company has caused substantial value destruction, as well as taking into account our engagement progress when exercising voting rights. In such occasions, a thorough discussion will be carried out at the “Exercise of Voting Rights Sub-committee” before we make final voting decisions. Additionally, in managing conflicts of interest that relate to AM-One’s parent or group companies etc., all voting decisions are further examined and made at the Stewardship Committee, following an advice from the Proxy Voting Advisory Council of which the majority of members are independent outside directors. AM-One’s Stewardship Committee, chaired by the CIO of Asset Management One Co., Ltd. in Tokyo and of which the Head of Risk Management Division is also a member, was established to oversee the implementation of stewardship activities（including voting and engagement activities）and the management of conflicts of interest.
（*）Conflict-of-interest management framework
In exercising voting rights, we have established a framework to ensure appropriate judgement and management with respect to voting on companies where there may be conflicts of interest involving our parent company, group companies or other related parties. Specifically, the Stewardship Committee referred to above oversees stewardship activities as a whole, including the exercise of voting rights, and manages conflicts of interest appropriately. Deliberations are conducted fully within the asset management division, which is independent of the corporate planning and sales divisions, and an appropriate system of checks and balances is maintained, including through the attendance of Audit and Supervisory Committee members at Stewardship Committee meetings. For proposals of the companies considered most important from a conflict-of-interest perspective, including parent companies, we obtain advice based on our guidelines from an independent proxy adviser, seek the views of the Proxy Voting Advisory Council, a majority of whose members are independent outside directors, and make an appropriate voting decision following deliberation by the Stewardship Committee. The results of such voting are reported to the Board of Directors as part of our monitoring framework.
B. Relationship with engagement and sustainable investment policies
In exercising voting rights, we place importance on making voting decisions not merely by applying formal criteria, but on the basis of constructive dialogue （engagement） with investee companies. Where proposal decisions are made based on such dialogue, the matter is deliberated as an important proposal by the Exercise of Voting Rights Sub-committee and an appropriate voting decision is made. If, in relation to material issues at individual companies that could have a significant impact on shareholder interests over the medium to long term, we consider a company’s response to be inadequate against the standards we seek in light of the environmental, social and corporate governance perspectives set out above, we request dialogue with the company’s management, including outside directors. If, despite having encouraged initiatives that would contribute to corporate value enhancement through such dialogue, no sufficient response is forthcoming, or if dialogue cannot be realised, and if, in light of our Sustainable Investment Policy, the company’s adverse impact on society is extremely significant and the risk of material damage to corporate value over the medium to long term is high, we will vote against the election of directors as part of an escalation step in our stewardship activities in order to urge stronger action by the company.
3. Policy and Guidelines on Exercise of Voting Rights
We have established proxy voting guidelines for each type of proposal. We assess proposals primarily from the perspectives outlined below. For details, please refer to the guidelines and proposal assessment criteria （PDF） below.
Asset Management One also exercises its voting rights associated with REITs.
4. Results of Exercise of Voting Rights at Shareholder Meetings
We disclose a summary of our voting results for non-Japanese equities in our annual Sustainability Report. For Japanese equities, detailed voting results for individual meetings and each voting item are published on an ongoing basis and made available on the website （in Japanese）.
