i) Basic Principles of Engagement

NOMURA ASSET MANAGEMENT ("NAM" or "we" hereafter) considers that engagement (constructive "purposeful dialogue") with investee companies is an effective way to fulfill its stewardship responsibility, and we intend to do so proactively.

NAM believes that engagement should be held based on the deep understanding of investee companies and their business environment. In this way, we will strive to grasp companies' specific circumstances. We then encourage companies to realize increase in corporate value and sustainable growth through their appropriate management practices and properly manage their progress toward the realization of such an appropriate management practices through engagement. At the same time, we do not believe that encouraging companies with management issues to improve them is the only method of engagement. We believe it is also very important to reassure well-managed companies of our support as investors.

Because NAM's operation underlies medium-to-long term investment based on thorough research and analysis of fundamentals, we believe that medium-to-long term fundamentals are key to engagement. However, we expect the contents of the dialogue with each investee company to vary depending on the business environment and the companies' specific business circumstances.

Based on the above principles, we set forth the basic stance on performing engagement as shown below, with an intent to fulfill our stewardship responsibilities by deepening mutual understanding through our day-to-day dialogue with investee companies:

  1. (1)Maintain an amicable and constructive stance when communicating with investee companies.
  2. (2)Deepen understanding not only on financial information, but also on non-financial information of the investee companies, which includes ESG issues, the background to certain strategies and management philosophy.
  3. (3)Exchange ideas and opinions with investee companies regarding capital efficiency.
  4. (4)Exchange ideas and opinions regarding the cause and recurrence countermeasures in the event of incidents that breach accepted standards and promote effective corporate management.

NAM will promote investee companies to create value and achieve sustainable growth through such activities. We will also reflect the status of engagement in our proxy voting and investment decisions.

There may be some cases where we receive material facts that have not been disclosed under the insider trading regulations or information that has a risk of being considered insider trading in the course of performing engagement. Such fact or information must, if received, be treated properly in accordance with laws and regulations, applicable rules and internal rules.

ii) Engagement Process

Engagement ProcessEngagement Process