Announcement of Acceptance of the Japan’s Stewardship Code*
* The Japanese version of the Stewardship Code was finalized by the Council of Experts Concerning the Japanese Version of the Stewardship Code on February 26, 2014.
Institutional investors should have a clear policy on how they fulfill their stewardship responsibilities, and publicly disclose it.
The investee companies of the funds WMP manages are the privately held companies such as small and medium sized companies or venture companies, both the very foundation of the Japanese industries. With the in-depth understanding of the vision of the investee companies, WMP engages in a broad range of management issues of the investee companies, and through constructive “purposeful conversation” with the respective management teams, contributes to their sustainable growth as an equity partner of the operation of the investee companies.
By maximizing the fund interests by the growth of the investee companies through such supporting activities, WMP fulfills its stewardship responsibilities and contributes to the sustainable development of the Japanese industries.
Institutional investors should have a clear policy on how they manage conflicts of interest in fulfilling their stewardship responsibilities and publicly disclose it.
As a manager of the funds, WMP has the authority to execute all tasks including investment decisions under the investment partnership agreement. In case there is a potential risk of conflicts of interest between the funds managed by WMP or between WMP and any of the funds managed by WMP, WMP makes decisions to maximize the interests of the fund investors, in accordance with the investment partnership agreement and in compliance with the applicable laws and regulations through appropriate processes to achieve the fairness to all stakeholders.
Institutional investors should monitor investee companies so that they can appropriately fulfill their stewardship responsibilities with an orientation towards the sustainable growth of the companies.
The privately held companies to which the funds managed by WMP invest, may not have the adequate disclosure system in place. For this reason, WMP, complying with the investment rules and protecting the confidential information of the clients, conducts detailed due diligence upon investment execution and discusses with the management team on measures to improve the governance. After the investment execution, WMP attends various meetings including board meetings for continuous discussion with the management team, regularly obtains financial information, and monitors the performance of the investee companies from both the quantitative and qualitative aspects.
Institutional investors should seek to arrive at an understanding in common with investee companies and work to solve problems through constructive engagement with investee companies.
As an equity partner of the operation of the investee companies, through a series of candid discussions with their respective management teams, WMP establishes the common understanding on the issues and risks, and works with the management teams for resolution. Taking into account various viewpoints of different stakeholders of the investee companies, WMP aims to navigate the investee companies for the sustainable growth and the increase in the company value.
Institutional investors should have a clear policy on voting and disclosure of voting activity. The policy on voting should not be comprised only of a mechanical checklist; it should be designed to contribute to the sustainable growth of investee companies.
WMP exercises its voting rights in accordance with the clear policy and process, and determines for or against relating to the agenda based on its internal policies. Additionally, through continuous and engaging discussions with the investee companies, WMP maintains in-depth understanding of the vision, shares the issues with the management for the sustainable growth of the investee companies, and makes clear its independent position through its votes.
Because most of the investee companies are unlisted, WMP does not disclose the results of its voting.
Institutional investors in principle should report periodically on how they fulfill their stewardship responsibilities, including their voting responsibilities, to their clients and beneficiaries.
WMP provides the fund investors with the information on the fund operations, performance and outlook of the investee companies through periodical reports and/or annual general meetings, etc. WMP fulfills its stewardship responsibilities by performing such reporting activities for the fund investors in a timely manner.
To contribute positively to the sustainable growth of investee companies, institutional investors should have in-depth knowledge of the investee companies and their business environment and skills and resources needed to appropriately engage with the companies and make proper judgements in fulfilling their stewardship activities.
A broad range of know-how and skills, including in-depth understanding and various expertise, is necessary to successfully perform stewardship activities for the investment to unlisted companies.
WMP seeks to improve such know-how and skills through discussions with the management teams of various investee companies, and internally shares various case studies to accumulate best practices and know-how relating to the stewardship responsibilities.
WMP strives to enhance its processes and resources to be an even more valued and trusted equity partner by the investee companies.