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Principle 4 - Our guidelines for escalating engagement
Standard Life Investments will always use reasonable endeavours to enhance and improve shareholder value through constructive engagement with the companies in which it invests. Our engagement process is described in more detail in Principle 3.
The method of engagement will depend on the nature of the issue that has given rise to it. Where the matter concerns operational issues, financial control and the execution of strategy, meetings will generally be conducted with senior members of the executive team. Issues of stewardship that are related to long-term sustainability, board oversight and governance, corporate culture, risk appetite, environmental care and relations with other stakeholders will be taken up with the most appropriate member(s) of the board.
In certain cases, we shall consider escalating our engagement on a particular issue. The tactical aspects of escalation are determined on a case-by-case basis. Consideration is likely to be given to engaging with the chairman, the senior independent director, the independent directors, the company’s advisers, and, if appropriate, the company’s regulators. At all stages of engagement escalation, we seek to ensure our views are represented by those who have appropriate seniority and experience. Where we feel it is appropriate to do so, we will also make our views known through public statements.
We recognise and welcome the benefits that can accrue from collective engagement with other investors. Such collective engagement often forms part of engagement escalation. Our approach to collective engagement is described in Principle 5.
Where the issue is related to a matter upon which shareholders are entitled to vote, we shall vote in accordance with the best interests of our clients, and in those instances where we vote against the motion or abstain, we will engage the company to explain the reasons for this decision. See Principle 6 for more information.
In exceptional circumstances where we are unable to resolve the issue, we shall exercise our discretion to table a motion at special or general meetings convened by the board or to call for a general meeting. We may also call on the board to make an undertaking at such meetings.