At CenterSquare Investment Management (CSIM), active ownership is integral to the investment process. Our engagement with portfolio companies allows us to build upon our institutional base of knowledge of the companies in which we invest. Our active ownership practices include ongoing engagement with management, boards, and advisory bodies, and on-site due diligence as inputs into our proxy voting decisions made at the portfolio level. CSIM’s Proxy Voting Policy (“Policy”) applies to securities held in the accounts of clients and guides our proxy voting decisions. In certain situations, a client or its fiduciary may provide CSIM with a proxy voting policy. In these situations, the CSIM will comply with the client’s policy.
Retention and Oversight of Proxy Advisory Firms – Institutional Shareholder Service (ISS), together with other proxy research providers as we may retain from time to time (the “Research Providers”), are independent advisers that specialize in providing a variety of fiduciary-level proxy-related services, including in-depth research, global issuer analysis, and voting recommendations.
CSIM has retained Research Providers to analyze proxy issues and make recommendations on those issues. While we may review and utilize the recommendations of one or more Research Providers in making proxy voting decisions, we are in no way obligated to follow such recommendations. CSIM votes all proxies based on its own Policy in the best interests of each client. In addition to research, ISS provides vote execution, reporting, and recordkeeping services to CSIM.
Voting Proxies for Certain Non-U.S. Companies – Voting proxies of companies located in some jurisdictions may involve problems that restrict or prevent the ability to vote such proxies or entail significant costs. These problems include, but are not limited to: (i) proxy statements and ballots written in a language other than English; (ii) untimely and/or inadequate notice of shareholder meetings; (iii) restrictions on the ability of holders outside the issuer’s jurisdiction of organization to exercise votes; (iv) requirements to vote proxies in person; (v) the imposition of restrictions on the sale of the securities for a period of time in proximity to the shareholder meeting; and (vi) requirements to provide local agents with power of attorney to facilitate our voting instructions. As a result, we vote clients’ non-U.S. proxies on a best efforts basis. ISS has been retained to assist in connection with voting non-U.S. proxies.
Well-governed companies are characterized by a primary focus on shareholders’ interests, accountable boards of directors, appropriate transparency in financial disclosure, performance-driven cultures, and appropriate consideration of all stakeholders.
CSIM utilizes the ISS Sustainability Proxy Voting Guidelines to guide our proxy voting decisions. CSIM’s Global ESG Coordinator, portfolio managers, and research analysts determine the appropriate voting position informed by expanded analysis in service of the client’s best interest. Our expanded analysis, including consideration of environmental, social, and governance impacts, often includes, but is not limited to: (i) a discussion with the issuer’s investor relations, management team, and/or members its board of directors; (ii) historical precedent; (iii) existing and alternative voting guidelines; (iv) other sources of voting recommendations (such as Glass-Lewis); and (v) views expressed by our clients.
Each voting decision is dependent upon its unique circumstances. CSIM may override, in part or in full, any of ISS’ recommendations if we believe it is not in the best interests of our clients. We maintain a record of such overrides and accompanying rationale. Proxy voting reports are available to clients upon request.
In certain instances, a conflict of interest may arise when CSIM votes a proxy. For example, CSIM may manage an issuer’s retirement plan or an employee of CSIM may have a business relationship that may affect how CSIM votes a proxy. When CSIM perceives a material conflict of the interest, the conflict is reported to the Chief Compliance Officer. It is expected that CSIM will abstain from making a vote decision and allow ISS to vote in order to mitigate the material conflict of interest.
Some accounts have at their discretion elected to participate in security lending programs. Generally, the ballots for these securities are not submitted to ISS by the custodian. In some instances, the custodian will report the number of shares on loan for reconciliation purposes, but the procedure is not standardized among all custodians.
ISS provides CSIM online access to client proxy voting records. CSIM receives and monitors multiple reports each week for pending proxy ballots, votes against management, and shareblocking. A summary of the proxy votes cast by CSIM is available to clients for their specific portfolio. Due to confidentially and conflict of interest concerns, CSIM does not disclose to third parties how it votes client proxies.
CSIM’s proxy voting procedures are disclosed in Form ADV Part 2A. A copy of this is available to our clients, without charge, upon request. All requests may be sent to Liz Conklin, Director of Operations, CenterSquare Investment Management LLC, 630 West Germantown Pike, Suite 300, Plymouth Meeting, PA 19462 or at firstname.lastname@example.org.