BCI Responsible Investing Newsletter

Responsible Investing Newsletter: Governance

Issue link: https://uberflip.bci.ca/i/1076427

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RESPONSIBLE INVESTING NEWSLETTER / 2019 2 2 A Message from the CEO/CIO Chief Executive Offi cer / Chief Investment Offi cer BCI's core purpose is to help our clients and their beneficiaries build meaningful futures by ensuring long-term returns are generated from the assets within BCI's portfolios. To meet their expectations, it is our responsibility to grow the value of our clients' investments. To that end, BCI is becoming a more active investor. We're investing directly and taking bigger equity positions so that we can have more influence over a company's strategic direction and help drive long-term value for our clients. As direct owners, we gain governance rights and seats on a company's board of directors. This means that we get a voice at the table when decisions are made concerning long-term strategy. As active owners we have oversight of a company's operations, can monitor cash flows, strengthen reporting, and push for best practices when it comes to ESG risks and opportunities. Ownership gives an investor the right to raise concerns and encourage positive changes. We integrate ESG considerations into our investment analysis, decisions, and processes. And as an active owner, we monitor ESG factors and engage with companies to raise awareness that good corporate governance is the over-arching framework for effective management of risks. When we invest in a company, part of the due diligence is assessing the governance. Once a company transitions into our portfolio, we restructure the governance to align with our interests and those of our clients. The investment industry is knowledge intensive; with good information we can capitalize on a company's competitive advantage and manage risk at a portfolio level. As owners, we outline our reporting expectations to management to ensure that we're getting the information we need to address issues that are important to us. Diversity, climate change, and board composition are, increasingly, topics of discussion across all asset classes. We believe that when a company enhances its governance and operational practices to effectively address ESG performance, it improves its ability to compete over the longer term, contributing to reliable returns for our clients.

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