MIM’s US Small-Mid Cap Value Equity team (USSMCV) became concerned over the governance practices of a company whose common stock is owned in a portfolio that the team manages. The company is a provider of equipment for communications networks. The company announced plans to issue convertible preferred notes, to a private equity firm, which would pay a dividend, while the company does not pay a dividend to common stock shareholders. This raised two concerns from a governance perspective for the team. First, the team would prefer that the company use its cash to pay a dividend to common stock shareholders as well as preferred shareholders, as this would not show the company favouring one class of shareholders over another. Second, if the private equity firm were to convert its preferred to common equity, it would substantially dilute existing common shareholders, which we are one of.