Since 1975, Walden has partnered with its clients to encourage portfolio companies to strengthen their corporate responsibility and accountability through shareholder engagement. As long term investors, we encourage each company we engage to take actions that are consistent with the long term interests of the company and its shareholders. Our experience demonstrates that effective shareholder engagement can lead to improved corporate policies, more sustainable business practices, and greater transparency and accountability.
We believe good companies must be open to change, especially if it can enhance the sustainability of their business by limiting risk and protecting share owner value. As long term investors, we recognize that companies aren’t perfect and change takes time to implement. Our long term approach to investing encourages companies to work with us.
|Areas of Engagement|
|Walden has been at the forefront of countless initiatives to encourage companies to better their ESG performance through shareholder engagement. Following are examples of some of the topics we engage companies on:
|Shareholder Engagement Strategies|
|We regularly initiate dialogue with corporate managements to address issues of concern to our clients, both during the process of evaluating companies for investment and once we are shareholders. Because Walden’s clients are long-term investors, we are able to establish constructive and enduring relationships. Walden meets regularly with many companies to discuss emerging issues, learn best practices, and monitor progress toward stated goals.|
|In cases where companies are not sufficiently responsive or where dialogue breaks down, we are able to take our concerns directly to other shareholders through the shareholder resolution process. Sponsoring a shareholder resolution allows an issue to be voted on by all shareholders through the proxy ballot. Importantly, filing a resolution often encourages negotiations with management leading to an early agreement and allowing withdrawal of the resolution before the proxy ballot is printed. Walden’s resolutions have, many times, achieved record levels of support, compelling management to take action.|
|Proxy voting provides a valuable opportunity for investors to express their positions as shareholders on key issues related to corporate governance and corporate social responsibility. Walden offers its clients a comprehensive proxy voting service designed to accommodate the various financial and ESG objectives of our clients.|
|How We Measure Success|
|Success can take many forms – stronger recycling programs, more inclusive human resource policies, comprehensive ESG reporting, to name a few. However, building corporate and public awareness of material ESG concerns is frequently the first step on the continuum of change. Walden believes that engagement resulting in increased understanding of an ESG priority is a significant sign of progress. Sometimes success comes quickly, but more often it is incremental. Because Walden’s investment approach emphasizes the selection of companies that we intend to hold long term, we are frequently able to establish strong and constructive relationships with their management over many years.|