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Asset Stewardship Report

Our 2022 report showcases the engagement and voting activity we undertook in our mission to maximize value for our clients and address material risks and opportunities in their portfolios – including those addressing sustainability issues.

Driven by Value

We believe that companies that have sound governance and oversight of risk and opportunities will be better positioned to generate long-term value and manage risk.

As long-term holders of capital on behalf of our clients, the informed exercise of voting rights, coupled with value-driven engagement, is one of the most effective mechanisms of creating value for our clients. Accordingly, our stewardship program proactively identifies companies for engagement and voting in order to mitigate material ESG risks in our portfolios.

2022 in Review

In 2022, we voted at over 22,500 meetings on over 200,000 management and shareholder proposals.

Our Report

Effective Board Oversight

We continued our focus on encouraging stronger corporate governance practices via effective board oversight.

effective board oversight

Firms with poor corporate governance practices can be exposed to material risks, such as regulatory and legal risks, so we believe it is part of our duty to our clients to carefully monitor corporate governance practices of investee companies and engage with them on these matters.

We conducted more than 600 engagements on governance in 2022 in which we discussed concerns regarding board practices, shareholder rights, and executive compensation, among other topics. Many of these engagements occurred before company shareholder meetings. We also discussed governance topics in our off-season engagements, including an ongoing engagement campaign where we seek to understand best practices for executive compensation plans. This campaign is intended to inform our expectations on the topic and help us develop thoughtful objectives for our engagements with investee companies.

Engagement Topics Include

  • Corporate Structure
  • Director Elections and Governance Practices
  • Director Time Commitments
  • Executive Compensation
  • Shareholder Rights

Climate Risk Management

Climate risk is a longstanding core theme of our stewardship activities. In 2022, we continued our focus on this topic.

effective board oversight

Climate risk has been a focus of our asset stewardship efforts since 2011. Companies across markets and industries are exposed to varying levels of physical, regulatory, and economic risks related to climate change.

As long-term investors, we are focused on value, and we continue to engage with investee companies to ensure that they are analyzing climate change-related risks and disclosing on them properly, which can also limit regulatory and legal risk.

Our climate-related engagements typically focus on understanding how companies are both managing climate risk and addressing climate as an opportunity. We use these conversations to discuss best practices and share our expectations regarding climate-related disclosures.

In 2022, we adopted voting guidelines to promote consistency in disclosures related to climate-related risks and opportunities, and we began considering voting against directors at companies in several major indices where companies failed to provide sufficient disclosure regarding climate-related risks and opportunities related to that company, or board oversight of climate-related risks and opportunities, in accordance with the Task Force on Climate-related Financial Disclosures (TCFD) framework.

Engagement Topics Include

  • Board Oversight
  • Climate Change
  • Climate Transition Plans
  • TCFD Disclosure

Human Capital Management

We have prioritized the topic of human capital management since 2018. In 2022, we published our first formal guidance on the topic.

effective board oversight

Companies without effective human capital management strategies may become exposed to material risks related to their operations, reputation, and strategic execution, among other areas.

We primarily focus on improving corporate disclosures regarding human capital management, with an emphasis on the largest employers in our portfolio. We leverage insights from engagements with companies to inform our guidance on this topic.

Engagement Topics Include

  • Board Oversight of Key Metrics
  • Employee Voice
  • Freedom of Association
  • Navigating Labor Market Dynamics

Diversity, Equity, and Inclusion

We have focused on the materiality of diverse perspectives — particularly gender and racial and ethnic identities — since 2017.

effective board oversight

We conducted approximately 300 engagements on the topics of racial, ethnic, and gender diversity in 2022. We also have an ongoing targeted engagement campaign focused on DEI practices and disclosures at 35 of the largest US- and UK-based employers in our portfolio. Our goal is to increase our understanding of DEI best practices, monitor the state of DEI risk management at our investee companies, and drive greater adoption of our suggested disclosures across the market.

Companies that fail to oversee risks and opportunities related to diversity, equity, and inclusion can be exposed to material risks including reputational, strategic, financial, regulatory, and human capital risks. Our stewardship efforts in this area seek to encourage improved corporate disclosure and data on companies’ DEI practices.

Engagement Topics Include

  • Board Oversight
  • DEI Strategy and Goals
  • Racial Equity Risks
  • Workforce Diversity Disclosure 

Case Study Engagements

Learn more about our successes and outcomes from our 2022 high-profile engagements with some of our investee companies.

Voting and Guidance Library

View all of our voting guidelines and expectations.

About our Asset Stewardship Program

Our Asset Stewardship program is focused on identifying issues that impact long-term sustainability of our portfolio companies. 

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