Shareholder Rights Directive
Engagement Policy
Introduction
This policy sets out the way in which Healthy Investment (“the Society”) engages with the companies in which it invests, in line with the requirements of the Shareholder Rights Directive (Asset Managers and Insurers) Instrument 2019.
As an active owner and long term investor, Healthy Investment has a duty to be a good steward of the funds we manage, and is committed to providing strong stewardship as a vital role in its responsible investment practices. We recognise the importance of shareholder engagement and the contribution that Environmental, Social and Governance (ESG) considerations can make to sustainable investment outcomes.
The Society takes its stewardship responsibilities very seriously, in line with its mutual status and its primary obligation to look after members’ interests.
How the Society integrates shareholder engagement with its investment strategy
The Society’s investments in companies are managed by external fund managers, who also manage shareholder engagement on the Society’s behalf. We expect our fund managers to look after our customers’ money responsibly and engage with companies they invest in.
When appointing a fund manager, the Society undertakes a tender process which assesses a range of factors, including not only the manager’s investment approach and fees, but also factors such as their values and cultural fit with the Society and the approach they take to stewardship and company engagement.
The investment strategy of the Society is set by the Society’s Board and managed by the Investment Committee. Our fund managers report to the Society’s Investment Committee to demonstrate how they have complied with their stewardship and shareholder engagement responsibilities. As part of its responsibilities, the Committee reviews the performance of the fund managers, including their engagement record. Full terms of reference of the Investment Committee are available on the Society’s website.
The Society’s approach to monitoring companies in which we are invested and how shareholder votes are exercised
The above activities are all delegated by the Society to the fund managers who have the requisite expertise, experience and infrastructure. They have in place appropriate policies and practices that enable them to discharge these duties appropriately and to be able to provide detailed reports on the activities they have undertaken.
The fund managers produce their own Stewardship Policies and provide us with information on how they engage with the companies in which they invest and how they have used their votes as a shareholder.
The Investment Committee meets with the fund managers to review how they have discharged their obligations in respect of these requirements. The Society also undertakes compliance monitoring reviews of the fund managers, which include consideration of their approach to stewardship and engagement.
Conflicts of interest in relation to the Society’s engagement
Investment strategy
The Society’s arrangements with fund managers
The Society’s investments in companies are managed by external fund managers. To ensure that our fund managers have a proper understanding of the Society’s business we actively engage with them to discuss the nature of the business, the underlying strategy and objectives and the expected profile and duration of the associated liabilities.
We require the fund manager to explain to us how their proposed investment strategy aligns to our strategy and objectives and how they expect to undertake engagement with the companies in which they will invest. We expect the fund managers we work with to exercise the full range of shareholder rights and responsibilities on our behalf and to demonstrate their approach to stewardship and engagement.
We evaluate the fund managers against criteria that includes their investment performance track record, fees and value for money, cultural fit with the Society, their understanding of our objectives and strategy and their approach to engagement.
We review the performance of the fund managers on a regular basis, to ensure that the Society can continue to meet the reasonable expectations of its members, balancing performance, risk and liquidity considerations.
