The KGH Investment Stewardship team serves as a one-stop shop for portfolio managers. Our stewardship work aims to: 
1. Protect and increase the value of our client’s assets through engagement with businesses.
2. Promote long-term financial performance through business and management practices that support long-term financial performance.
3. Offer expert advice on environmental, social, and governance (ESG) issues for all investment strategies, whether indexed or actively managed.

This overlay strategy ensures that KGH can most effectively use its voice as a long-term, actively engaged shareholder to protect our clients’ economic interests.

To us. It’s not a question of compliance. Corporate governance is a function of the board of directors’ leadership and the quality of management provided by the executives. We believe that companies that practice good corporate governance, including how they manage the environmental and social aspects of their operations, provide better risk-adjusted returns over time.

Engagement

We engage in constructive dialogue. Our goal is to foster mutual understanding and ask probing questions, not to tell businesses what to do. Engagement is essential to our stewardship program because it allows us to evaluate a company’s approach to governance in the context of its unique circumstances.

To that end, we work with approximately 1.500 companies each year on a variety of ESG issues. We meet with executives and board directors, communicate with the company’s advisors, and, as needed, engage with other shareholders. Participation informs our voting and investment decisions.

Proxy Voting

As our broadest form of engagement, we engage in proxy voting. Every year, we vote on over 130,000 proposals at over 15,000 shareholder meetings around the world. Our initial role will be to assist management. When we have concerns, we prefer to engage in the first instance and give management time to address or resolve the issue.

We vote against management proposals if the company is unresponsive or does not appear to be acting in the best interests of shareholders over the long term.

ESG Integration

We believe that the best companies strategically manage all aspects of the business ESC considerations are integral to our investment stewardship activities. Our clients are long-term investors, and ESG risks and opportunities tend to be material and have the potential to impact financial returns over the long term.

The best companies make certain that their investors, as well as other company constituents, have enough information to understand the drivers of, and risks to, long-term financial performance. The KGH Investment Stewardship team assists investment teams in incorporating material ESG considerations into their investment analyses.

Voting Guidelines Reports and Position Papers

Our voting guidelines are simply that: guidelines designed to help companies understand our thinking on key governance issues. They serve as the standard against which we evaluate a company’s approach to corporate governance and the items on the shareholder meeting agenda.

Our policies are implemented in a practical manner. Our vote decision is based on what we believe will best protect our clients’ long-term economic interests. The guidelines are reviewed and updated on an annual basis to reflect:

1. Changes in market standards
2. Evolving governance practice and
3. Insights gained from engagement over the prior year

We publish our full voting record annually and report on our voting and voting-related engagements every quarter. We publish a more detailed report on our thematic, ESG performance, and event-driven engagements twice a year. These semi-annual reports provide an overview of our engagements with the governance policy framework. our public speaking activities and insights gained from ESG thematic research.

By publishing research reports on ESG tonics and position papers on emerging trends, we hope to help shape the policy debate. We also make statements of support for market stewardship codes available.

These guidelines and reports, taken together, provide a sense of the breadth and depth of the work that the KGH Investment Stewardship team does to help protect and enhance the value of the assets that our clients have entrusted to us in order to help them achieve their long-term financial goals.