Sumitomo Mitsui Trust Bank’s clients have extremely high expectations for the bank in regards to the performance of fiduciary duties and stewardship responsibilities as a responsible investor. The bank is constantly looking for new ways to develop and strengthen its conflict of interest management structure, increasing transparency so that clients may enter into transactions with ever greater peace of mind. Below is an introduction to the latest developments in its approach to fiduciary responsibilities, in particular its improved measures against conflicts of interest, as an indicator of the progress made within the financial industry in Japan as a whole.
To date the bank has leveraged its significant expertise and comprehensive capabilities to conduct asset management operations in order to maximize returns for beneficiaries based on the “Fiduciary Spirit” it has adhered to since its founding. In recent times, with the increasing specialization and complexity of financial services, a variety of conflict of interest risks have arisen – between both business divisions within the company and between in-group companies. As such, and also from the standpoint of “Fiduciary Spirit”, the bank believes that it is necessary to take more comprehensive steps to prevent situations in which the interests of clients may be unfairly impaired.
Increased scrutiny of fiduciary responsibilities coincides with current capital market reforms in Japan, where companies are encouraged to be transparent and actively engage with stakeholders through the introduction of the Stewardship Code and the Corporate Governance Code. As the bank acts as an investment manager, it is held accountable for its investment activities by disclosing its engagements and proxy voting actions publicly. To do so, the bank has strengthened its framework of fiduciary responsibilities, and built up its conflict of interest management structure. All the bank’s officers and employees recognize the importance of the practical implementation of stewardship responsibilities and fiduciary duties, and having built an appropriate structure the bank acts transparently and faithfully in carrying out its operations as it seeks to maximize returns for its beneficiaries.