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Longview Partners

PRI reporting framework 2017

You are in Direct - Listed Equity Active Ownership » Engagement

Engagement

Overview

LEA 01. Description of approach to engagement

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate whether your organisation has a formal engagement policy.

01.2. Indicate what your engagement policy covers:

01.3. Attach or provide a URL to your engagement policy. [Optional]

URL

Attach document


01.4. Provide a brief overview of your organization’s approach to engagement

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.  

01.5. Additional information [optional]


LEA 02. Reasoning for interaction on ESG issues

02.1. Indicate the method of engagement, giving reasons for the interaction.

Type of engagement

Reason for interaction

Individual/Internal staff engagements

Collaborative engagements

Service provider engagements

02.2. Additional information. [Optional]


Process

Process for engagements run internally

LEA 03. Process for identifying and prioritising engagement activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.

03.1. Indicate whether your organisation has a formal process for identifying and prioritising engagement activities carried out by internal staff.

03.2. Describe the criteria used to identify and prioritise engagement activities carried out by internal staff.

03.3. Additional information. [Optional]

If Longview becomes aware of a governance issue, or has concerns that the company’s management is not acting in shareholders’ interests, the relevant Research analyst will contact the company to discuss the matter.  The Research analyst will make clear our concerns, as well as our expected level of performance regarding governance matters.  In most circumstances this dialogue will be with the CEO or CFO of the company, however if more appropriate, we will contact the Chairman or Head of the Remuneration Committee. If the response from the company is deemed unsatisfactory then the issue will be highlighted specifically with the rest of the Research team and the CIO.  At this point, the team will decide whether the response requires escalation.  If an issue is serious enough that it is deemed likely to cause a material change in our valuation of the business, or a reduction in our Quality rating, we will write to senior management, or express our views through robust discussions with the appropriate member of the management team. We are willing to challenge management in an attempt to protect and enhance the interests of our clients and will exercise our right to vote against management, where appropriate.  Furthermore, if after lengthy discussions we believed that 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.


LEA 04. Objectives for engagement activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.

04.1. Indicate if you define specific objectives for your engagement activities.

04.2. Indicate if you monitor the actions that companies take following your engagements.

04.3. Indicate whether your organisation defines milestones and goals for engagement activities carried out by internal staff.

04.5. Additional information. [Optional]


Process for engagements conducted via collaborations

LEA 05. Process for identifying and prioritising collaborative engagement

New selection options have been added to this indicator. Please review your prefilled responses carefully.

05.1. Indicate whether your organisation has a formal process for identifying and prioritising collaborative engagements

05.3. Additional information [Optional]


LEA 06. Objectives for engagement activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.

06.1. Indicate if you define specific objectives for your engagement activities carried out collaboratively.

06.2. Indicate if you monitor the actions companies take following your collaborative engagements.

06.3. Indicate whether your organisation defines milestones and goals related to engagement activities carried out via collaborations.

06.5. Additional information. [Optional]

Our policy on engagement focuses on meetings and dialogue with company directors and management on a one-on-one basis. Collective engagement with other shareholders would be considered if we believed this would result in a more positive outcome for our clients, is consistent with our policies and procedures and meets all legal requirements. For example, collective engagement would be considered prior to an important company vote, where we felt that our ability to lobby other investors may result in a more positive outcome for our clients. Consequently, we are able to evaluate any resulting management decisions and actions. Ultimately, if after lengthy discussions we believed management was failing to act in shareholders' interests, we would tend to sell our holding in order to minimise the loss of shareholder value.
We would anticipate collaboration at this level to be infrequent.


General processes for all three groups of engagers

LEA 09. Share insights from engagements with internal/external managers (Private)


LEA 10. Tracking number of engagements

10.1. Indicate if you track the number of engagements your organisation participates in.

Type of engagement
Tracking engagements

Individual / Internal staff engagements

Collaborative engagements

10.2. Additional information. [OPTIONAL]


Outputs and outcomes

LEA 11. Number of companies engaged with, intensity of engagement and effort (Private)


LEA 12. Engagement methods (Private)


LEA 13. Engagements on E, S and/or G issues (Private)


LEA 14. Companies changing practices / behaviour following engagement (Private)


LEA 15. Examples of ESG engagements (Private)


Communication

LEA 16. Disclosure of approach to ESG engagements

16.1. Indicate whether your organisation proactively discloses information on its engagements.

16.5. Indicate what engagement information your organisation proactively discloses to clients/beneficiaries.

Engagement information disclosed

          Details of specific engagement example and topics discussed.
        

16.6. Indicate how frequently you typically report engagements information

16.8. Additional information. [Optional]


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