We engage with companies on corporate governance issues as part of our overall investment strategy and we incorporate the results from our engagement into our Quality criteria. "Engagement" to us means that we seek to meet with company board directors and executives to discuss strategy and corporate responsibility issues. We are comfortable discussing any contentious issues on company meeting agendas and have ongoing dialogue with management regarding the outlook of the business and the issues and risks affecting it. Consequently, we are able to evaluate any resulting management decisions and actions. We will also discuss the quality of the company’s reporting as well as the finance and remuneration schemes and strongly support those that align management’s interests with those of shareholders.
We evaluate our engagement with companies through our ongoing dialogue with company management. We incorporate the results from our engagement into our investment criteria. Whilst we put our views forward strongly in these meetings, we do not consider ourselves activist. Ultimately, if after lengthy discussions we believed management was failing to act in shareholders’ interests, we would reduce our Quality rating to Q3 and sell our holding in order to minimise the loss of shareholder value.