J.P. Morgan Asset Management is committed to delivering superior investment performance to its clients worldwide. We believe that one of the drivers of investment performance is an assessment of the corporate governance principles and practices of the companies in which we invest. We expect all our investee companies to demonstrate the highest standards of governance in the management of their businesses, as far as is reasonably practicable.
We believe that active portfolio management, focusing primarily on stock selection within a disciplined, risk controlled framework, offers the best means of achieving long term investment success. Superior performance comes from investing in well-managed, high-quality companies providing attractive and sustainable risk adjusted returns. We aim to achieve this through investment processes which have been refined over more than 40 years of active management experience, both in the Asian region and worldwide.
Central to this process is regular contact with our investee companies, in order to better understand their businesses and associated governance issues. As a fiduciary we recognize the importance of active ownership on behalf of our clients and we have an obligation to engage with the companies in which we invest, to ensure our clients' interests are represented and protected. We therefore meet routinely with the senior executives of all of our investee companies, in order to exercise our ownership responsibilities. Where a governance issue is material, in our view, we will engage with the company in order to better understand the issue and promote best practice. Our analysts and portfolio managers also take these issues into account as part of their investment process.
Hong Kong's "Principles of Responsible Ownership"
As a major institutional investor, J.P. Morgan Asset Management has a responsibility to its clients to ensure that all entrusted assets benefit from the highest standards of governance. To this end, we endorse the “Principles of Responsible Ownership”, promulgated by the Securities and Futures Commission, which encourages investors to engage with investee companies to provide effective oversight over their investments.
The code sets out the following principles:
- Investors should establish and report to their stakeholders their policies for discharging their ownership responsibilities;
- Investors should monitor and engage with their investee companies;
- Investors should establish clear policy on when to escalate their engagement activities;
- Investors should have clear policies on voting;
- Investors should be willing to act collectively with other investors when appropriate;
- Investors should report to their stakeholders on how they have discharged their ownership responsibilities; and
- When investing on behalf of clients, investors should have policies for managing conflicts of interests.
For details of our approach to each of these principles and how we discharge our responsibilities, please click here for a copy of our "Principles of Responsible Ownership".
J.P. Morgan Asset Management manages the voting rights of the shares entrusted to it as it would manage any other asset. It is our policy to vote shares held in our clients' portfolios in a prudent and diligent manner, based exclusively on our reasonable judgement of what will best serve the financial interests of the beneficial owners of the security. So far as is practicable we will vote at all of the meetings called by companies in which we are invested.
Effective monitoring of company performance is an essential component of ownership. As active investors we invest considerable resources in our research capabilities and our analysts and portfolio managers are expected to enter into a regular dialogue with our investee companies to ensure that we understand all aspects of their businesses. In order to demonstrate how we have discharged our ownership responsibilities, J.P. Morgan Asset Management maintains a clear record of our proxy voting and engagement activities through our quarterly Corporate Governance Report.
Conflicts of Interest Disclosure
J.P. Morgan Asset Management is part of the JPMorgan Chase Group, which is a multi-service banking group providing a broad range of banking and investment related services. This may give rise to a number of conflicts of interest as we discharge our engagement and voting responsibilities.
Protecting client interests' is our primary concern. Our Conflicts of Interest Disclosure policy sets out how we identify circumstances which may give rise to conflicts of interest, and how we have established mechanisms and procedures to manage these conflicts appropriately.
J.P. Morgan Asset Management is a member of the Asian Corporate Governance Association (ACGA).
To discuss corporate governance issues further, please contact:
Jonathan Lowe, Managing Director
Corporate Governance – Asia ex-Japan
+852 2800 2131