Policy for Fulfilling Stewardship Responsibilities
Basic Policy
We at JPX hereby announce that we accept the "Principles for Responsible Institutional Investors: Japan's Stewardship Code" (hereinafter referred to as "the Code") to properly fulfill our stewardship responsibilities as an asset owner in the management of our corporate pension plan.
Our corporate philosophy is to contribute to the realization of an affluent society by promoting the sustainable development of the market. In terms of stewardship activities, we believe that our proactive fulfillment of stewardship responsibilities as an asset owner will lead to the realization of this goal.
Regarding our corporate pension plan, we will promote efforts to develop our human resources and improve their investment capabilities so that they can conduct business in a fair and honest manner while taking the best interests of our corporate pension's beneficiaries into consideration. In our position as an asset owner, we will encourage the sustainable growth of our investee companies and the improvement of their corporate value, and thereby fulfill our fiduciary responsibilities to our corporate pension's beneficiaries.
Here at JPX, we have a contract-type, defined-benefit corporate pension plan. Since the plan is not managed by us directly but through asset managers, we will require them to conduct stewardship activities, and evaluate and monitor said activities to ensure their effectiveness.
Our Response to the Principles of Japan's Stewardship Code
Principle 1: Institutional investors should have a clear policy on how they fulfill their stewardship responsibilities, and publicly disclose it.
We will establish and publicly disclose our policy on how we fulfill our stewardship responsibilities as an asset owner in the management of our corporate pension plan. We will also require the asset managers that are entrusted with the management of our corporate pension plan to accept the Code and to establish and disclose clear policies on how they fulfill their stewardship responsibilities. In addition, we will require the asset managers to engage in activities that encourage the sustainable growth of investee companies and the medium- to long-term enhancement of their corporate value through constructive engagement based on sustainability considerations. For our part, we will monitor the stewardship activities of our entrusted asset managers to ensure that they are in line with our policy.
Principle 2: Institutional investors should have a clear policy on how they manage conflicts of interest in fulfilling their stewardship responsibilities and publicly disclose it.
We will require the entrusted asset managers to establish clear policies on how they manage conflicts of interest in fulfilling their stewardship responsibilities, publicly disclose said policies, and comply with them. When the entrusted asset managers exercise their voting rights in JPX, we will respect their judgments and not intervene, thereby avoiding the occurrence of conflicts of interest that could arise in their management of our corporate pension plan.
Principle 3: 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.
We will require the entrusted asset managers to assess the status of the investee companies regularly and accurately and report to JPX periodically on the details of said assessments in fulfillment of their stewardship responsibilities.
Principle 4: 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.
We will require the entrusted asset managers to establish clear policies in advance on how to engage in dialogue with investee companies in order to enhance the investee companies' corporate value from a medium- to long-term perspective and promote their sustainable growth. In addition, we will require the entrusted asset managers to seek to arrive at an understanding in common with investee companies and work to solve problems through constructive engagement with them. Finally, we will require the entrusted asset managers to consciously engage in dialogue on sustainability issues that is consistent with their investment strategies and that leads to the sustainable growth of investee companies and medium- to long-term improvements in their corporate value.
Principle 5: 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.
Since we entrust our asset managers with the asset management of our corporate pension plan and are not in a position to exercise voting rights in the investee companies, we will require the entrusted asset managers to establish clear policies on voting and disclosure of voting activity in fulfillment of their stewardship responsibilities, and to disclose their voting activity based on said policies.
Principle 6: Institutional investors in principle should report periodically on how they fulfill their stewardship responsibilities, including their voting responsibilities, to their clients and beneficiaries.
Since we entrust our asset managers with the asset management of our corporate pension plan and are in a position to fulfill our stewardship responsibilities through them, we will require the entrusted asset managers to report periodically on their activities for fulfilling their stewardship responsibilities. We will report the results to our corporate pension's beneficiaries at least once a year.
Principle 7: To contribute positively to the sustainable growth of investee companies, institutional investors should develop skills and resources needed to appropriately engage with the companies and to make proper judgments in fulfilling their stewardship activities based on in-depth knowledge of the investee companies and their business environment and consideration of sustainability consistent with their investment management strategies.
We will require our entrusted asset managers to have in-depth knowledge of the investee companies and their business environment, and to have the capabilities necessary to enhance the investee companies' medium- to long-term corporate value and to promote their sustainable growth through constructive dialogue that is based on sustainability considerations and consistent with the asset managers' investment strategies. In addition, we will strive to provide education and training to ensure that our liaisons can make appropriate judgments on the entrusted asset managers' stewardship activities.
Principle 8: Service providers for institutional investors should endeavor to contribute to the enhancement of the functions of the entire investment chain by appropriately providing services for institutional investors to fulfill their stewardship responsibilities.
We are not a service provider for institutional investors.
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