For professional use only ABOUT US CONTACT US Home INVESTMENT SOLUTIONS FUNDS PRICES & PERFORMANCE LITERATURE NEWS & VIEWS MEDIA CENTRE UK STEWARDSHIP CODE BACKGROUND In July 2010, the Financial Reporting Council (FRC) published the first edition of the UK Stewardship Code. Following consultation in April 2012, the FRC announced limited changes to the Stewardship Code intended to increase accountability and engagement through the investment chain. The updated Code came into effect on 1st October 2012. By way of its seven Principles, this Code aims to enhance the quality of engagement between institutional investors and companies, in order to help improve long-term returns to shareholders and the efficient exercise of governance responsibilities. The Code encourages greater transparency about the way in which institutional investors oversee the companies in which they invest. Canada Life Asset Management Limited (Canada Life Investments*) regards the combination of constructive dialogue with companies and the considered use of voting rights, as the basis of its stewardship responsibilities. In our view shareholders have a vital role to play in encouraging a higher level of corporate performance by adopting a positive approach to corporate governance engagement with companies. We are an active investment manager. Fundamental research on stocks is crucial to the investment process, as are regular meetings with company representatives. In addition, Canada Life Investments has UK proxy voting procedures and looks to resolve any contentious issues. The Code’s seven Principles, and how and to what extent Canada Life Investments incorporates them into our investment process, are described below. * Canada Life Investments is the brand for investment management activities undertaken by Canada Life Asset Management Limited, Canada Life Limited and Canada Life European Real Estate Limited. PRINCIPLE 1 Institutional investors should publicly disclose their policy on how they will discharge their stewardship responsibilities. Canada Life Investments takes into account its stewardship responsibilities towards its clients, with regard to investment and performance, as well as its position as an agent on behalf of its clients. We recognise the responsibilities that come with significant share ownership and take them seriously, encouraging companies’ compliance with corporate governance as best practice. We routinely engage with and vote on all our UK equity holdings. We treat votes, and the influence these give us on behalf of our clients, as valuable assets and act accordingly in exercising them. The size of the clients’ shareholding and the materiality of any issue will determine the level of engagement we undertake. Our approach to stewardship is considered, constructive and pragmatic with the extent of any intervention determined on a case-by-case basis. In all our endeavours, the interests of our clients are paramount. PRINCIPLE 2 Institutional investors should have a robust policy on managing conflicts of interest in relation to stewardship and this policy should be publicly disclosed. First and foremost, Canada Life Investments will always seek to act in accordance with the best interests of our clients as investors when casting votes on their behalf. We believe that strong corporate governance at the companies in which we invest best serves our clients’ interests. It is extremely rare that we find conflicts of interest. However, on any potential conflicts of interest between Canada Life Investments, the investee company and/or a client, the guidance of the Association of British Insurer’s (ABI) Institutional Voting Information Service which provides governance and voting research, will take precedence. More generally, Canada Life Investments also maintains clear policies governing other areas of potential conflicts of interest that may arise in interacting with the companies in which we invest, all with the aim of taking reasonable steps to put the interest of our clients first. These policies include such areas as outside employment or directorships by Canada Life Investments personnel and the acceptance of gifts and entertainment. PRINCIPLE 3 Institutional investors should monitor their investee companies. Our team of investment managers and research analysts rigorously monitor companies in which we decide to invest; this is key to our investment approach. Our investment management team and research analysts generate independent research on companies. The monitoring process largely comprises meeting management, analysing company announcements and news flow, investment screening and studying external analytical research. The ABI’s Institutional Voting Information Service and the ISS ProxyExchange service provide reports regarding areas of concern which are likely to be discussed at forthcoming meetings. We generally aim to see investee companies at least once a year. This provides us with an opportunity to ask questions and to challenge their strategy, performance, corporate governance and other relevant issues in a constructive manner, which may influence the value of our clients’ investments. We occasionally become aware of inside information on quoted companies. This occurs either via company management or from brokers acting on their behalf. In the event we become ‘insiders’ we cease to trade in securities of the company until we are no longer insiders. PRINCIPLE 4 Institutional investors should establish clear guidelines on when and how they will escalate their stewardship activities. Monitoring, dialogue and voting processes occasionally highlight areas of concern. If we believe a decision or proposal by company management will negatively affect the company’s long-term investment potential, our investment managers will usually eliminate the holding from their portfolios. In the rare instances in which we decide to escalate our activities, we do so via meetings or conversations between our investment managers and company management. Following a meeting, we monitor the company’s response to ensure that steps are taken to address the issues raised. Assuming that it is not in the best interests of Canada Life Investments or our clients to dispose of the security, a variety of routes may be pursued and the form of any intervention is determined on a case by case basis. Intervention would normally include contact via the corporate broker, or to approach the company directly. The aim of any intervention undertaken by Canada Life Investments is to protect and enhance shareholder value for our clients. PRINCIPLE 5 Institutional investors should be willing to act collectively with other investors where appropriate. Canada Life Investments works with other investment institutions on collaborative engagement initiatives when it believes it to be in the interest of our own investors and is deemed the most effective course of action to address a specific issue or concern. Canada Life Investments has historically used its involvement with and membership in various trade bodies. The appropriateness of collective engagement is considered on a case-by-case basis. When participating in collective engagement, due regard is paid to any conflicts of interest and to our appetite for being made insiders. In deciding whether or not to act collectively with other investors, Canada Life Investments takes into account a range of factors. These include: whether or not collective engagement is likely to be more effective; the extent to which the objectives of the other investors are in accordance with our own; and the need for confidentiality. PRINCIPLE 6 Institutional investors should have a clear policy on voting and disclosure of voting activity. Canada Life Investments aims to exercise all proxy voting rights of the London Stock Exchange listed investee companies. We employ the services of a specialist proxy voting agency, which analyses resolutions and tests them against our voting policy. Our approach to voting includes careful consideration of explanations made by companies for departure from the UK Corporate Governance Code. We appreciate that companies differ and that the Corporate Governance Code should be applied with care and judgement, recognising that flexibility may be appropriate in certain circumstances. Canada Life Investments has a Securities Lending Arrangement with a Lending Agent. The Lending Agent is responsible for administering the arrangement and has procedures in place to ensure that Canada Life Investments retains the economic benefit of owning the securities and that Canada Life are informed of all upcoming voting events. All securities are recalled by the Lending Agent prior to the voting deadline to ensure that Canada Life Investments can vote on the full holding. PRINCIPLE 7 Institutional investors should report periodically on their stewardship and voting activities. Canada Life Investments maintains a record of all voting decisions. A summary of our proxy voting activities is published on a regular basis on our website under the ‘About Us’ section at www.canadalifeinvestments.com QUARTERLY VOTING DISCLOSURE Q2 2014 Disclosure Download PDF Q1 2014 Disclosure Download PDF Q4 2013 Disclosure Download PDF Q3 2013 Disclosure Download PDF Q2 2013 Disclosure Download PDF Q1 2013 Diclosure Download PDF Q4 2012 Disclosure Download PDF Q3 2012 Disclosure Download PDF Q2 2012 Disclosure Download PDF Q1 2012 Disclosure Download PDF Q4 2011 Disclosure Download PDF Q3 2011 Disclosure Download PDF Q2 2011 Disclosure Download PDF Version March 2014 ABOUT US OUR PEOPLE OUR HISTORY ABOUT GREAT-WEST LIFECO INC AWARDS TREATING CUSTOMERS FAIRLY UK STEWARDSHIP CODE PILLAR 3 DISCLOSURE FAQS CONTACT US SHARE THIS PAGE INVESTMENT WITH VISION © 2014 Canada Life Investments ABOUT US Our People Our history About Great-West Lifeco Inc Awards Treating customers fairly UK Stewardship Code Pillar 3 disclosure FAQs Contact us INVESTMENT SOLUTIONS Fixed Income International Equities UK Equities Specialist Equities Multi Asset Risk Profiled Property Fund Management Real Estate Finance FUNDS Fixed Income International Equities UK Equities Specialist Equities Multi Asset Risk Profiled Life & Pension Buy our funds PRICES & PERFORMANCE LITERATURE NEWS & VIEWS Latest News Market Views MEDIA CENTRE Press releases Press Office CONTACT US Buy our funds How to find us Canada Life (Onshore) Canada Life International (Offshore Isle of Man) Canada Life International Assurance (Offshore Dublin) Press Office Feedback Data Protection Accessibility Legal Cookies © 2014 Canada Life Investments. All rights reserved. The Canada Life Investments website is intended for institutional investors, professional investors and professional advisers only and is not approved for use by private investors. Canada Life Investments is the brand for investment management activities undertaken by Canada Life Asset Management Limited, Canada Life Limited and Canada Life European Real Estate Limited. Canada Life Asset Management Limited (no. 03846821), Canada Life Limited (no.00973271) and Canada Life European Real Estate Limited (no. 03846823) are all registered in England and the registered office for all three entities is Canada Life Place, Potters Bar, Hertfordshire EN6 5BA. Canada Life Asset Management is authorised and regulated by the Financial Conduct Authority. Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.