NOMURA ASSET MANAGEMENT

NOMURA

Examples of Engagement

We believe we should hold constructive dialogue with each investee company based on mutual understanding. It is also necessary for investors to deepen their level of understanding beyond the investor relations efforts of each company.
We make efforts to communicate regularly with as many investee and target companies as possible. Day to day communication with these companies enables us to hold "purposeful dialogue" to improve the prospect of constructive engagement activities.
Major themes of engagement include 1) business strategy to improve corporate value, 2) safety management and compliance, and 3) corporate governance structures for proxy voting.
The following examples are abstracts from dialogues held between Nomura Asset Management Tokyo and Japanese investee companies:

Dialogue Examples Related to Business Strategy to Improve Corporate Value

  • During a visit from the CEO of an electrical appliance manufacturer, we discussed their future management strategy over the medium-term management plan, and which business operations for them to focus on.
  • During a visit from the CEO of a wholesale company, we discussed its adherence to the Corporate Governance Code, such things as increasing its profit level in order to achieve an ROE of 8-10% and increasing its financial leverage to a more appropriate level.

Dialogue Examples Related to Safety Management and Compliance

  • We visited an automobile company and an auto component manufacturer to confirm the circumstances of a scandal in which each was involved and discussed how to deal with the situation in the future.
  • During a visit from the IR of a Chemical company that was reported to be involved in a scandal, we had discussed the impact of the scandal upon its reputation, and discussed they should continue work to raise its corporate value, by also strengthening its non-financial aspects, such as corporate governance and investor relations, including increasing improvement in its transparency.

Dialogue Examples Related to Corporate Governance

  • During a visit from a telecommunications company, we discussed the reasons why the rate of board meeting attendance by the outside director was low, and how to better manage this in the future.
  • We discussed with a chemical company about measures to improve the company's medium-to long-term performance by making it the focal topic of discussion at board meetings, and to enhance the cultivation of personnel in charge of management.

Dialogue Examples Related to Efforts Directed at ESG Issues

  • We advised investor relations of a financial institution to focus on not only CSR activities but also focus on improving its corporate structure such as enhancement of its corporate value, and to achieve sustainable growth, and stakeholder management. We also proposed some ESG issues that should be addressed in a way linked to such efforts.
  • Managers in charge of investor relations at a transportation company consulted with us and we proposed to them that, since their ROE results were lower than acceptable by the high quality of the services provided by the company, the company should try to increase its profitability by such means as improving its efficiency and raising its sales prices, and that an explanation should be provided from the standpoint of how CSR-related efforts are linked to the increasing of corporate value.