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Jarislowsky, Fraser Limited

PRI reporting framework 2017

You are in Direct - Listed Equity Active Ownership » Engagement » Process » Process for engagements run internally

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]

The firm has a long history of taking an engaged approach to share ownership, regularly meeting company management and advocating for good corporate governance practices.

We believe that well-governed companies pursue higher-quality business practices and are more aligned with the long-term interests of their stakeholders. For this reason, corporate governance practices are a core component of all research reports and company reviews. In addition, proxy voting is fully integrated into our investment process, with all decisions approved by the Investment Strategy Committee. When governance practices fail to live up to our standards, we seek constructive engagement with company managements, and in some cases with Boards of Directors to improve practices.

Our commitment to, and the way we engage on, good governance is a more mature and formalized example of how we deal with ESG factors in general. The data, disclosures and conversations around environmental and social issues are less mature than those around governance. However, we are having these conversations with management and other industry participants.

See question 4 for summary historical engagements.

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.

04.4. Indicate if you do any of the following to monitor and evaluate the progress of your engagement activities carried out by internal staff.

other description

          Our engagement with companies is nuanced and case-specific, and as such is evaluated on a case-by-case basis.

04.5. Additional information. [Optional]

We believe that good governance drivers better business practices and ultimately leads to increased shareholder returns.  We value transparency and accountability.   This belief is deeply integrated into our investment approach and we regularly discuss various aspects of governance with management as part of our normal course approach to long-term engaged ownership.  This is further reinforced in our proxy voting policy, which lays out our approach to issues such as Board structure, independent committees and executive compensation.   In the 12 months ending June 30, 2016, while we agreed in full with management on 19% of proxy meetings,  we had at least one point of distinction on the other 81%.  

The list below is a sample of some of our focused and higher-impact historical engagements. While not exhaustive, we believe this to be a representative sample of our tireless commitment to doing what is right for shareholders.   As we take stock in 2017, engagements are going to be as relevant as ever, although the issues that we focus on will continue to evolve.  

  • 21 focused engagements between 2004-2016
    • 6 different countries
    • More than 8 different industries
    • 8 aimed at holding management and the Board accountable
    • 8 aimed at attaining fair treatment for all shareholders
    • 7 regarding contested M&A
    • 4 regarding compensation

We employed a variety of engagement strategies including management engagement, board engagement and/or nominations, proxy/shareholder engagement and regulatory/legal filings.   We consider ten of the engagements to be successful,  eight were partially successful/ongoing, and three were unsuccessful.

In addition, in 2016, we engaged with 6 portfolio companies to encourage them to disclose on climate change via the CDP Climate Change Questionnaire: three did not respond, two said they would review, and one expected to complete the survey.  We have renewed these efforts on a collaborative basis in 2017.