Proxy Voting Policies, Procedures, and Guidelines

Introduction

Global Systematic Investors LLP (“GSI”) is an investment management firm authorised in the United Kingdom by the Financial Conduct Authority with permission to provide certain regulated products and services. GSI may provide investment services and products to a variety of clients. In doing so, GSI will endeavour to treat all clients fairly, including when voting proxies on behalf of its clients.

Currently, given the additional costs associated with voting proxies, GSI believes that it is not in the best economic interests of its clients to vote most, if not all, proxies. However, if GSI believes that an individual circumstance warrants voting or if the firm’s view on the costs and benefits changes, then the following procedures apply.

Proxy Voting Procedures

GSI’s Investment Committee (the “Committee”) is responsible for overseeing the proxy voting process. The Committee may delegate responsibility to oversee specific areas of compliance with these procedures to one or more of its members. In addition, the Committee may authorise other individuals, including those working for firms outside GSI, to vote proxies on behalf of GSI’s clients.

Generally, GSI considers proxy voting on a case by case basis. When the firm believes that an issue to be voted on is likely to affect the economic value of the portfolio or fund or that its vote may influence the ultimate outcome of the contest, and that the benefits of voting the proxy exceeds the expected costs, then GSI will make every reasonable effort to vote the proxy.

Conflicts of Interest

There may be occasions where voting proxies present a conflict of interest between GSI, its employees, and one or more of GSI’s clients. GSI and its employees are required to put the interests of their clients first. However, most proxy votes will be cast in accordance with predefined procedures and guidelines, which minimises the potential for any conflict of interest.

If such a conflict is identified, the conflict will be reported to the firm’s Compliance Officer and recorded in the Conflicts Register. The Compliance Officer will determine whether the conflict needs to be referred to the Investment Committee. If so, the Investment Committee will determine to appropriate course of action to manage the conflict in the best interests of the firm’s clients.

Proxy Voting Guidelines

GSI’s proxy voting guidelines (the “Guidelines”) are intended to assist the firm in casting votes that are in the best interest of its clients. However, there may be occasions when the firm determines that the best interests of its clients are served by voting on certain issues contrary to the Guidelines. When the Guidelines do not cover potential voting issues, the firm will endeavour to vote in a manner that is consistent with the spirit of the Guidelines and in the best interests of its clients.

GSI generally votes for:

  1. Routine business decisions.
  2. Amendments to reverse anti-takeover provisions.
  3. Auditors recommended by management.
  4. Directors, except cases where GSI is aware of abuses of position, conflicts, or other failures of corporate governance.
  5. Indemnification of Directors.
  6. Separation of auditing and consulting responsibilities.
  7. Confidential voting.
  8. Proposals that are designed to improve a company’s management of its environmental, social, or governance responsibilities.
  9. Separation of the CEO role from that of Chairman.

GSI generally votes against:

  1. Anti-takeover proposals.
  2. Compensation that is disproportionate and not connected to company performance.
  3. Directors in the instances where GSI is aware of abuses of position, conflicts, or other failures of corporate governance.

GSI reviews on a case by case basis:

  1. Consolidation of the CEO and Chairman roles.
  2. Dissident proxy battles.
  3. Implementation of or changes to employee equity option plans.
  4. Increases to a company’s issued equity or debt capital.
  5. Merger proposals.
  6. Related party transactions.
  7. Any items not considered above.

Proxy Voting Records

GSI will maintain records of all proxies voted. If GSI has voted over a period, a summary of votes cast for that period will be published on the firm’s website.