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STEWARDSHIP CODE FEBRUARY 2011


Background

The UK Stewardship Code was published in 2010 by the Financial Reporting Council (“FRC”). The code requires institutional investors to disclose how they meet their share ownership obligations in respect of holdings of quoted shares in investee companies.

1 Policy Statement

This statement sets out the Arch International Group (the "Group") policy with regard to the Stewardship Code. Our overriding responsibility is to maintain long term value for our clients.

2 Conflicts of Interest

The Group's conflicts of interest policy is as set out in its compliance manual. When considering voting matters our general policy is to act in the best interests of clients. Where there is a perceived conflict of interest the Group will consider each case on its merits and may seek external advice on how best to proceed, or abstain from voting.

3 Monitoring Investee Companies

Investee companies are regularly monitored to determine when it is necessary to enter into an active dialogue with their boards. There may be cases where the Group may decline to receive information from investee companies that may make it an insider and therefore restrict its ability to vote or manage its holdings.

4 Escalation Guidelines

The Group seeks to build long term relationships with its investee companies through a number of communication channels. Where it is in disagreement with investee companies, the Group will seek to engage management to explain and attempt to resolve issues prior to voting.

5 Acting Collectively

The Group’s policy is to engage in discussions with the investee company but will also engage with other investors where appropriate. Where we consider such engagement to be in the best interest of shareholders, the Group will participate in collective engagement, having due regard to conflicts of interest and insider information.

6 Share Voting Policy

It is the Group’s policy to vote in all circumstances except where onerous restrictions (such as the ability to trade the underlying shares) would outweigh the benefits of voting. The Group’s voting decision will be taken on the basis of the information available to it at the time. If the Group has been unable to reach a satisfactory outcome through active dialogue with management then the Group will register an abstention or vote against a resolution.

7 Periodic Reporting

The Group keeps a record on voting activity and will on request disclose to its clients details of how it has discharged its responsibilities with respect to that activity.