Corporate Governance

As an independent asset management firm, we are committed to encouraging good corporate governance practices at the companies in which we invest. We seek to impact governance in several ways, including through proxy voting and listening to companies held in the portfolios we manage. We also seek to improve internal processes through research on governance matters and participation in industry surveys and events.

For questions about our corporate governance activities or policies, visit the links below or contact us at corporategovernance@dimensional.com.

Policies

  • Introduction

    At Dimensional Fund Advisors, our efforts to add value do not end once the portfolios we manage invest in a company. Our activity in corporate governance is an additional way that we seek to make a positive impact on the overall investment process.

    The mission of our corporate governance (CG) group is to maximize shareholder value. While shareholder value can be a broad concept, we believe that the primary goal of good governance is to ensure that shareholders are properly represented. This is best accomplished by having a competent and fairly compensated board of directors and putting in place a governance structure that minimizes the potential for conflicts of interest between shareholders on the one hand, and board members or management on the other hand. If conflicts are unavoidable, transparency and disclosure should be robust and meaningful so that shareholders can adequately assess the need for, and the potential impact of, the conflict of interest.

    We seek to encourage good governance practices in a variety of ways, including through the implementation of our proxy voting policy, by listening to companies held in the portfolios we manage, and sharing with such companies Dimensional policies regarding certain key areas of focus, such as executive compensation, proxy contests, mergers and spin-offs, and anti-takeover devices (including poison pills and staggered boards).

  • Anti-takeover provisions

    We believe that the market for corporate control, which often results in acquisitions that are accretive to shareholders, should be able to function without undue restrictions. Takeover defenses such as poison pills and classified boards can lead to entrenchment of management and reduced accountability at the board level.

    Poison Pills. In general, we intend to vote the shares of the portfolios we manage against poison pills, as well as all directors that put a poison pill in place without first obtaining shareholder approval. We generally intend to vote against those directors not only at the company whose board adopted the poison pill but also against such directors if they serve on boards of other companies held in the portfolios we manage. In considering a poison pill for approval, we may take into account the existence of ‘qualified offer’ and other shareholder-friendly provisions. For pills designed to protect net operating losses, we may take into consideration a variety of factors, including but not limited to the size of the available operating losses and the likelihood that they will be utilized to offset gains.

    Classified Boards. We believe that shareholders should be given the right to vote on the entire slate of directors on an annual basis and encourage boards to conduct annual elections for all sitting directors.

  • Related Party Transactions

    Related-party transactions have played a significant role in several high-profile corporate scandals and failures. Transfers of value from shareholders to management, or parties connected to management, are sometimes difficult to evaluate on their merits. As a result, even potentially beneficial transactions can reduce shareholder value due to the mere appearance of impropriety. As such, we believe related party transactions should be minimized and, when such transactions are determined to be fair to the company and its shareholders in accordance with the company’s policies and governing law, should be thoroughly disclosed in public filings.

  • General Industry Best Practices

    Dimensional’s policies and approach with regard to corporate governance also reflect certain industry best practices which seek to minimize undue limitations on shareholder rights. Examples of what we believe to be industry best practices in a few areas include:

    • Majority (rather than plurality) voting standard for election of directors
    • Majority (rather than supermajority) voting standard for other items such as bylaw amendments and mergers
    • Shareholder rights to call special meetings (25% threshold) and take action by written consent
    • Avoidance of dual class share structures
  • Responsible Investment Policy

    Responsible Investment Statement

    Effective as of February 2018

    General Statement

    Dimensional’s investment philosophy is based on the belief that in liquid capital markets, prices reflect all publicly available information about fundamental values. As such, Dimensional’s view is that securities traded in those markets reflect the aggregate risk and return expectations of all market participants and competition among market participants drives prices toward fair value.

    This belief in markets means that Dimensional expects any value or long-term profitability attributable to a company’s current environmental, social, and governance practices to be reflected in a company’s price. A company can improve its corporate governance practices by aligning company management with shareholder interests, such as by promoting strong board representation, as well as by reducing unnecessary environmental and social risks. Dimensional also believes efforts to improve corporate governance may be reflected in increased valuations through a combination of lower discount rates and higher cash flows. For this reason, Dimensional primarily focuses its responsible investment efforts on improving governance practices in companies within the investment portfolios it manages on behalf of its clients.

    Investors, particularly long-term shareholders with significant positions, can be well positioned to positively influence a company’s governance practices. We believe that shareholders have a right to be heard by company management and that it is our responsibility as an investment manager to judiciously exercise shareholder voting rights on behalf of the portfolios we manage, taking into account both the costs and potential benefits. Dimensional broadly incorporates governance considerations into the investment management process through its proxy voting, which incorporates practices to reflect shareholder interests, as well as communicating with portfolio companies to share Dimensional policies and areas of focus with regard to governance practices. Dimensional improves its internal processes through selected projects, research and consistent review of those processes.

    United Nations Principles for Responsible Investment (“UNPRI”)

    As part of its commitment to encouraging strong governance, Dimensional became a signatory to the UNPRI in August 2012. The UNPRI provides a framework for incorporating environmental, social, and corporate governance (“ESG”) considerations into investment management practices. Dimensional commits to adopt and implement the six principles of the UNPRI (the “Principles”) where consistent with its fiduciary duty to clients, including:

    Principle 1: Dimensional will incorporate ESG issues into investment analysis and decision-making processes.

    Principle 2: Dimensional will incorporate ESG issues into relevant policies and practices.

    Principle 3: Dimensional will seek appropriate disclosure on ESG issues from relevant portfolio companies.

    Principle 4: Dimensional will promote acceptance and implementation of the Principles within the investment industry.

    Principle 5: Dimensional will work to enhance its effectiveness in implementing the Principles.

    Principle 6: Dimensional will report on its activities and progress toward implementing the Principles.

    Responsible Investment Initiatives

    Corporate Governance Committee and CG Group

    Dimensional has established a Corporate Governance Committee that reports to the Investment Committee. The Corporate Governance Committee is composed of senior executives, officers, directors, and members of the portfolio management team and is responsible for administering Dimensional’s proxy voting policy, considering complex proxy voting cases, and overseeing the Corporate Governance Group.

    The Corporate Governance Group is a day-to-day working unit, which implements policies and oversees operations. This group includes dedicated analysts and resides within Portfolio Management. The group also utilizes investment management personnel in the Portfolio Management group.

    Investment Management

    Dimensional’s primary responsible investment focus is on improving governance practices at portfolio companies.  As an example, Dimensional generally excludes closely held companies from its universe of eligible securities for its clients on governance grounds, since companies with large strategic shareholders may not represent the interests of a broad set of shareholders. Dimensional may also choose not to purchase companies for its clients where, based on public information, in its judgment, there is a heightened concern of fraudulent or other behavior or situations that may make market information unreliable.

    Dimensional also takes environmental and social principles into consideration for certain portfolios it manages. If clients have particular social and/or environmental preferences, Dimensional can implement negative screens or overlays to its underlying investment strategies to provide those clients with tailored investment solutions. Many of these preferences are incorporated into Dimensional’s social funds and sustainability funds.

    In social funds, Dimensional seeks to incorporate social considerations into investment strategies by identifying and screening companies to reflect the values of its clients. Dimensional may utilize research from independent third-party vendors, depending on the requirements of each portfolio, to systematically exclude restricted securities.

    In sustainability funds, Dimensional seeks to address the sustainability issues important to investors while maintaining sound investment principles. Sustainability considerations are integrated within a robust investment solution that pursues higher expected returns through increased weighting to smaller market cap, lower relative price, and higher profitability securities. Using data collected by Dimensional and research from independent third-party vendors on company business practices, companies are systematically evaluated with regard to sustainability. Investment in those companies is emphasized, reduced, or excluded based on how they fare on key sustainability metrics, including the primary sustainability impact considerations of high greenhouse gas emissions or reserves that may produce those emissions. Dimensional’s approach to sustainability can offer investors the ability to pursue their sustainability and investment goals simultaneously.

    With regard to social and/or environmental considerations, it is Dimensional’s belief that investors decide whether those preferences should be aligned with their investment decisions, but that choice should not have to come at the expense of sound investment principles. These views are reflected in Dimensional’s social and sustainability funds.

    Approaching Corporate Governance

    • Proxy Voting

    Proxy voting is the act of exercising shareholder voting rights on behalf of clients, and Dimensional views proxy voting as an integral part of its investment management process. As Dimensional believes that stronger corporate governance practices will be reflected in higher security prices, Dimensional seeks to make proxy voting decisions consistent with the goal that boards and management of portfolio companies are focused on protecting and enhancing shareholder value. Dimensional may engage external vendors for voting execution and recommendations for certain shareholder meetings but remains responsible for voting decisions.

    Dimensional takes into consideration the costs associated with voting and generally will vote in instances where the expected economic benefit of doing so outweighs the costs for a given portfolio. Dimensional may use securities lending as a way to increase performance. For securities on loan, Dimensional will balance the revenue-producing value of loans against the value of casting votes. Dimensional does intend to recall securities on loan if, based upon information in Dimensional’s possession, it determines that voting the securities is likely to materially affect the value of a client’s investment and that is in the client’s best interests to do so.

    • Company Communications

    When there is potential to increase shareholder value in connection with corporate governance, Dimensional will listen to the management of companies and may share with such companies Dimensional’s policies and areas of focus with regard to governance best practices. Dimensional’s Corporate Governance Group communicates directly with portfolio companies to understand their approach to corporate governance, including management of material environmental and social factors. In all such communications, Dimensional’s aim is to seek additional information in the interests of protecting and enhancing the value of the investments of Dimensional’s clients.

    A majority of the conversations are prompted when the companies have not provided sufficient information in their disclosures for Dimensional to assess particular elements concerning the company’s proxy, including but not limited to, executive compensation, anti-takeover provisions, board composition and effectiveness, material sustainability factors, and shareholder proposals. In these conversations, Dimensional prioritizes its questions to hear from companies how the board aligns management and shareholder interests, and protects shareholder value.

    Though Dimensional uses its voice to communicate directly with the board and management, Dimensional does not try to impose change through dialog, as it is ultimately the board and management that decide how to run their company, and portfolio companies are aware that they will be held accountable by their large shareholders like Dimensional through the mechanism of proxy voting.

    • Industry Participation

    Dimensional may join or participate in events with relevant industry groups where an opportunity exists to improve its internal processes.

    • Internal Projects and Research

    Dimensional may conduct research on the implications of certain governance practices and what it means for a company to have good governance policies and practices.

    Disclosures and Reporting

    Dimensional discloses information concerning its proxy voting records on its website and in other governance-related materials as appropriate, and updates such information as new information becomes available from time to time. Dimensional also posts detailed proxy voting records on its website where required in accordance with applicable regulations.

    Dimensional will annually report on its progress towards implementing the UNPRI as required.

    Corporate Responsibility

    Dimensional is committed to improving its sustainability practices globally by seeking to understand the impact of its business operations on the environment and develop offices, plans, and processes that minimize those impacts. Dimensional’s corporate headquarters was awarded a three-star rating by Austin Energy Green Building.


    * “Dimensional” refers to the Dimensional separate but affiliated entities generally, rather than one particular entity. These entities are Dimensional Fund Advisors LP, Dimensional Fund Advisors Ltd., DFA Australia Limited, Dimensional Fund Advisors Canada ULC, Dimensional Fund Advisors Pte. Ltd. and Dimensional Japan Ltd.

  • Japan Stewardship Code

    Principles for Responsible Institutional Investors

    This statement describes Dimensional Fund Advisors LP's adherence to the principles of the Japan Stewardship Code. As used in this statement "Dimensional" refers to Dimensional Fund Advisors LP. Dimensional adopted the Japan Stewardship Code on August 28, 2014 and this statement has been revised as of November 29, 2017.

    Principle 1: Institutional investors should have a clear policy on how they fulfill their stewardship responsibilities, and publicly disclose it.

    We strive to maximize shareholder value at portfolio companies by supporting good governance practices. Dimensional's Proxy Voting Guidelines are published on our website and a summary of our Proxy Voting Policies and Procedures is available to our clients on request (the Guidelines and the Policies and Procedures being together "Dimensional's Proxy Voting Policies"). These documents explain our voting policy and how we deal with conflicts of interest and are reviewed at least annually.

    Principle 2: Institutional investors should have a clear policy on how they manage conflicts of interest in fulfilling their stewardship responsibilities and publicly disclose it.

    Dimensional maintains an explicit policy on managing potential conflicts of interest which is focused on the principle of preserving shareholder value. The procedures Dimensional follows in the event a conflict of interest arises are described in Dimensional's Proxy Voting Policies, which are available as set out above.

    Principle 3: Institutional investors should monitor investee companies so that they can appropriately fulfill their stewardship responsibilities with an orientation towards the sustainable growth of the companies.

    Dimensional monitors the corporate governance of the companies in which our portfolios invest, or "portfolio companies," primarily through the proxy voting process. Dimensional’s Corporate Governance Group members are available to listen to dissidents and portfolio company management and also are available to reach out to portfolio companies as appropriate to gather information necessary to make informed proxy voting decisions. Dimensional's Proxy Voting Policies have been formulated to encourage portfolio companies to adopt and maintain corporate governance policies that are consistent with our clients' best interests and the maximization of the value of their investments. Dimensional utilizes certain third-party proxy advisory firms for proxy research and vote execution processing, and monitors their services for adherence to Dimensional’s Proxy Voting Policies. Although Dimensional may consider the proxy voting recommendations, we remain ultimately responsible for all proxy voting decisions. Dimensional also reserves the right to vote counter to the Proxy Voting Policies if we believe that the best interests of our clients would be served by such a vote. Our Proxy Voting Guidelines are available on our website.

    Principle 4: Institutional investors should seek to arrive at an understanding in common with investee companies and work to solve problems through constructive engagement with investee companies.

    Dimensional sees corporate governance as a way to add value to the investment process and believes that stronger governance practices will be reflected in better company and stock performance. Dimensional maintains open lines of communication to listen to dissidents and management, maintaining a monitored email address (corporategovernance@dimensional.com) for dissidents or portfolio companies to contact Dimensional with corporate governance related material or meeting requests. Dimensional’s Corporate Governance Group members are available to communicate with dissidents and portfolio company management and also are available to reach out to portfolio companies as appropriate to gather information necessary to make informed proxy voting decisions. By exercising our voice to inform companies of our views on good governance, we believe that we can help promote their sustainable growth.

    Principle 5: Institutional investors should have a clear policy on voting and disclosure of voting activity. The policy on voting should not be comprised only of a mechanical checklist; it should be designed to contribute to the sustainable growth of investee companies.

    Dimensional's Proxy Voting Guidelines (available on our website) are developed considering the principle of seeking to preserve shareholder value. A summary of our Proxy Voting Policies and Procedures is available to our clients on request. We disclose our voting activity to the extent required by any applicable regulatory authorities. For separate account clients, we report our proxy voting activity if required in the client's agreement with us or by the client’s specific request. Dimensional and its affiliates publicly disclose on Dimensional's and its affiliates' websites the full voting history for all Dimensional funds, which includes disclosure of all of the voting history for Japanese portfolio companies.

    Principle 6: Institutional investors in principle should report periodically on how they fulfill their stewardship responsibilities, including their voting responsibilities, to their clients and beneficiaries.

    We disclose our voting publicly each year as detailed in our statement regarding Principle 5 above. We also provide our clients periodic updates on our voting activities if required in our agreements with them or by the client’s specific request. Dimensional also conducts an annual self-assessment of our adherence to the principles of the Japan Stewardship Code.

    Principle 7: To contribute positively to the sustainable growth of investee companies, institutional investors should have in-depth knowledge of the investee companies and their business environment and skills and resources needed to appropriately engage with the companies and make proper judgments in fulfilling their stewardship activities.

    Dimensional's Corporate Governance Committee includes many of the firm’s most senior investment personnel. The Committee oversees the firm’s governance activities and is responsible for the firm’s corporate governance policy. Dimensional also has a Corporate Governance Group which includes members of the firm’s global Portfolio Management team. Dimensional uses a number of external resources to deepen its knowledge of business and governance practices at investee companies, including daily market news, proxy voting research, and external corporate governance networks. As of the date of this statement, Dimensional also participates in numerous governance-related conferences, roundtables, and organizations, which include the Council of Institutional Investors and Harvard Corporate Governance Roundtable.


    Annual Review of Commitments under the Japan Stewardship Code

    As part of Dimensional Fund Advisors LP’s statement of adherence to the Japan Stewardship Code we regularly review our commitments as reflected in our statement of adherence. During the period November 1, 2017 to October 31, 2018, we took the following actions:

    • Reviewed and updated our proxy voting policy including changes to include additional criteria considered when evaluating director nominees and executive compensation plans.
    • Reviewed and updated our Responsible Investment Policy Statement including changes to include additional information about Dimensional’s policies regarding communications with issuers and recalling of shares on loan in connection with proxy votes.
    • Held quarterly meetings of our Corporate Governance Committee, which oversees governance activities and develops corporate governance policies.
    • Reviewed costs of voting for each Dimensional fund and accounts we manage (to the extent that information is available to Dimensional).
    • Held due diligence meetings with our proxy research providers.
    • Voted at over 2,000 meetings of Japanese portfolio companies on behalf of Dimensional funds and client accounts.
    • Publicly disclosed on our website our voting history for all Japanese securities held by the Dimensional funds.
    • Communicated with the management of over two dozen Japanese companies about executive compensation, director elections, and corporate governance best practices.
    • Participated in industry events, including the Council of Institutional Investors Spring Conference, the Society for Corporate Governance National Conference, the Spring and Fall meetings of the Harvard Corporate Governance Roundtable, and the Fall Engagement Summit.

    Overall, we believe we were able to add value and improve the governance of Japanese portfolio companies, and will continue to look for ways to do so going forward.


    For the proxy voting records of certain Japanese separate account clients, please click here.

  • Frequently Asked Questions

    Who is responsible for Corporate Governance at Dimensional?

    Dimensional’s global corporate governance activities are managed by the Corporate Governance (CG) group, which sits within Dimensional’s Portfolio Management department. The group implements policies, monitors day-to-day operations, and researches governance issues and industry trends. Our Corporate Governance Committee, comprised of senior management, is responsible for overseeing the CG group, formulating and recommending changes to policy, and making decisions on governance-related matters.

    What is Dimensional’s policy on proxy voting?

    Dimensional votes or refrains from voting proxies on behalf of mutual funds as well as those separate account mandates for which clients have given us the authority to vote according to its then current proxy voting policies and procedures. Our voting activities are intended to maximize shareholder value. This involves consideration of the feasibility, costs, and expected benefits of voting for each portfolio. Our proxy voting policies, summarized in the Statement of Additional Information (SAI) for the funds, further describe how we vote; answers to some specific questions are provided below.

    Does Dimensional vote proxies at every company meeting?

    Dimensional seeks to vote, or refrain from voting, proxies in a manner that we believe is in the best interest of each portfolio. In instances where the costs—including opportunity costs—of voting exceed the expected economic benefits, we may refrain from voting. Additionally, international market restrictions—such as share blocking, re-registration, and onerous power of attorney requirements—may preclude us from voting in certain markets or at certain company meetings.

    Does Dimensional utilize any third-party services in the proxy voting process?

    Yes. Dimensional has engaged Institutional Shareholder Services (ISS) to provide information on shareholder meeting dates, research on proxy proposals, and voting recommendations based on our proxy voting policies and procedures. ISS also provides vote execution through its proprietary voting platform. In addition to ISS, we may also review voting recommendations from Glass Lewis and other research providers for selected meetings. Third-party research is only one of several inputs into our voting decision on a given proposal. We retain final discretion on how to vote.

    Does Dimensional disclose its voting intentions or share ownership prior to voting?

    Dimensional generally does not disclose our voting intentions or the portfolios’ share ownership prior to voting, except as required by applicable laws and regulation.

    Does Dimensional make its proxy voting record publicly available?

    Yes. We disclose voting information for our US mutual funds on our public website. We also file form N-PX, containing the full voting record for our US-based mutual funds, with the US Securities and Exchange Commission on an annual basis.

    Is Dimensional a signatory to the United Nations Principles for Responsible Investment (UN-PRI)?

    Yes. Dimensional became a signatory to the UN-PRI in August 2012.

    How may I contact Dimensional’s Corporate Governance group?

    The group may be contacted via email: corporategovernance@dimensional.com.

  • Proxy voting policies, procedures, and guidelines

    Effective February 1, 2019

    General Approach to Corporate Governance and Proxy Voting


    When voting proxies, Dimensional seeks to act in the interests of the funds and accounts we manage. We seek to maximize shareholder value subject to the standards of the relevant legal and regulatory regimes, listing requirements, regional stewardship codes, and any social and sustainability guidelines of specific funds or accounts. Dimensional will evaluate management and shareholder proposals on a case-by-case basis.

    We expect the members of a portfolio company’s board to act in the interests of their shareholders. Each portfolio company’s board should implement policies and adopt practices that align the interests of the board and management with those of its shareholders. Since a board’s main responsibility is to oversee management and to manage and mitigate risk, it is important that board members have the experience and skills to carry out that responsibility.

    This document outlines Dimensional's global approach to key proxy voting issues and highlights particular considerations in specific markets.

    Global Evaluation Framework


    Uncontested Director Elections

    Dimensional may vote against individual directors, committee members, or the full board of a portfolio company in the following situations:

    1. There are problematic audit-related practices;

    2. There are problematic compensation practices or persistent pay for performance misalignment;

    3. There are problematic anti-takeover provisions;

    4. There have been material failures of governance, risk oversight, or fiduciary responsibilities;

    5. The board has failed to adequately respond to shareholder concerns;

    6. The board has demonstrated a lack of accountability to shareholders.

    Dimensional also considers the following when voting on directors:

    1. Board independence

    2. Director attendance

    3. Director capacity to serve

    4. Board composition

    Contested Director Elections

    In the case of contested board elections at portfolio companies, Dimensional takes a case-by-case approach. With the goal of maximizing shareholder value, we consider the qualifications of the nominees, the likelihood that each side can accomplish their stated plans, the company's corporate governance practices, and the incumbent board's history of responsiveness to shareholders.

    Auditors

    Dimensional will typically support the ratification of auditors unless there are concerns with the auditor's independence, the accuracy of the auditor's report, the level of non-audit fees, or if lack of disclosure makes it difficult for us to assess these factors.

    Anti-Takeover Provisions

    We believe that the market for corporate control, which often results in acquisitions which generally increase shareholder value, should be able to function without undue restrictions. Takeover defenses such as poison pills can lead to entrenchment of management and reduced accountability at the board level.

    Related-Party Transactions

    Related-party transactions have played a significant role in several high-profile corporate scandals and failures. We believe related party transactions should be minimized. When such transactions are determined to be fair to the company and its shareholders in accordance with the portfolio company’s policies and governing law, they should be thoroughly disclosed in public filings.

    Equity Compensation

    Dimensional supports the adoption of equity plans that align the interests of the portfolio company board, management, and company employees with those of shareholders.

    Dimensional will evaluate equity compensation plans on a case-by-case basis, taking into account the potential dilution to shareholders, the portfolio company's historical use of equity, and the particular plan features.

    Executive Compensation

    Dimensional supports compensation for executives that is clearly linked to the portfolio company’s performance. Compensation should be designed to attract, retain and appropriately motivate and serve as a means to align the interests of executives with those of shareholders. To the extent that compensation is clearly excessive and not aligned with the portfolio company’s performance or other factors, Dimensional would not support such compensation.

    Therefore, Dimensional reviews proposals seeking approval of a portfolio company’s executive compensation plan closely, taking into account the quantum of pay, company performance, and the structure of the plan.

    Director Compensation

    Dimensional will support director compensation that is reasonable in both size and composition relative to industry and market norms.

    Mergers & Acquisitions (M&A)

    Dimensional's primary consideration in evaluating mergers and acquisitions is maximizing shareholder value. Given that we believe market prices reflect future expected cash flows, an important consideration is the price reaction to the announcement, and the extent to which the deal represents a premium to the pre-announcement price. Dimensional will also consider the strategic rationale, potential conflicts of interest, and the possibility of competing offers.

    Dimensional may vote against deals where there are concerns with the acquisition process or where there appear to be significant conflicts of interest.

    Capitalization

    Dimensional will vote case-by-case on proposals related to share issuances, taking into account the purpose for which the shares will be used, the risk to shareholders of not approving the request, and the dilution to existing shareholders.

    Dimensional opposes the creation of dual-class share structures with unequal voting rights and will vote against proposals to create or continue dual-class capital structures.

    Shareholder Proposals

    When evaluating shareholder proposals, Dimensional considers the most important factor to be whether adoption of the proposal is likely to enhance or protect shareholder value.

    Dimensional will also consider the potential cost to the portfolio company, the portfolio company’s current handling of the issue (both on an absolute basis and relative to peers), and whether the issue would be better addressed through legislation or government regulation.

    Dimensional’s Approach to Environmental and Social Issues


    Dimensional believes that portfolio company boards are best positioned to address environmental & social (E&S) issues within their duties. We may communicate with portfolio companies to better understand the alignment of the interests of boards and management with those of shareholders on these topics. If a portfolio company is unresponsive to material E&S risks which may have economic ramifications for shareholders, Dimensional may support shareholder proposals and may also vote against or withhold voting from directors individually, committee members, or the entire board.

    For sustainability-focused funds, Dimensional may support shareholder proposals aimed at enhancing the disclosure around certain environmental issues. In limited circumstances, Dimensional may support proposals requesting companies take specific steps to address material risks from environmental issues. For socially-focused funds, Dimensional may support shareholder proposals aimed at enhancing the disclosure around certain social issues. In limited circumstances, Dimensional may support proposals requesting companies take specific steps to address material risks from social issues.

    Proxy Voting Principles for the United States


    Uncontested Director Elections

    Shareholders elect the board of a portfolio company to represent their interests and oversee management and expect portfolio company boards to adopt policies and practices that align the interests of the board and management with those of shareholders and limit the potential for conflicts of interest.

    One of the most important measures aimed at ensuring that portfolio company shareholders’ interests are represented is an independent board of directors, made up of individuals with the diversity of backgrounds, experiences, and skill-sets needed to effectively oversee management and manage risk. We expect portfolio company boards to be majority independent and key committees to be fully independent.

    Dimensional may vote against individual directors, committee members, or the full board of a portfolio company in the following situations:

    1. Problematic audit-related practices;

    2. Problematic compensation practices or persistent pay for performance misalignment;

    3. Problematic anti-takeover provisions;

    4. Material failures of governance, risk oversight, or fiduciary responsibilities;

    5. Failure to adequately respond to shareholder concerns;

    6. Lack of accountability to shareholders.


    Dimensional also considers the following when voting on directors at portfolio companies:

    1. Director attendance - Board members should attend at least 75% of meetings.

    2. Director commitments - Board members should ensure that they have the capacity to fulfill the requirements of each board membership.


    Contested Director Elections

    In the case of contested board elections at portfolio companies, Dimensional takes a case-by-case approach. With the goal of maximizing shareholder value, we consider the qualifications of the nominees, the likelihood that each side can accomplish their stated plans, the portfolio company's corporate governance practices, and the incumbent board's history of responsiveness to shareholders.

    Classified Boards

    We believe that shareholders should be given the right to vote on the entire slate of directors on an annual basis. Therefore, we encourage portfolio company boards to conduct annual elections for all sitting directors.

    Dimensional will generally support proposals to declassify existing boards at portfolio companies, and will oppose efforts by portfolio companies to adopt classified board structures, in which only part of the board is elected each year.

    CEO/Chair

    Dimensional believes that the portfolio company boards are best placed to determine whether the separation of roles is appropriate and will generally vote with management on shareholder proposals requiring that the chairman’s position be filled by an independent director.

    However, at portfolio companies with a combined CEO/Chair, Dimensional expects the board to appoint a lead independent director with specific responsibilities, including the setting of meeting agendas, to seek to ensure the board is able to act independently.

    Board Size

    Dimensional generally believes that portfolio company boards are best positioned to determine an appropriate size, and therefore will generally defer to the board in setting its size. However, Dimensional will oppose proposals to alter board structure or size in the context of a fight for control of the company or the board.

    Age/Term Limits

    Dimensional believes it is the responsibility of a portfolio company’s Nominating Committee to ensure that the company’s board of directors is composed of individuals with the skills needed to effectively oversee management and will generally oppose proposals seeking to impose age or term limits for directors.

    That said, portfolio companies should clearly disclose their director evaluation and board refreshment policies in their proxy.

    Poison Pills

    Dimensional generally opposes poison pills. As a result, we may vote against the adoption of a pill and all directors that put a pill in place without first obtaining shareholder approval. Votes against directors may extend beyond the company that adopted the pill, to all boards the directors serve on. In considering a poison pill for approval, we may take into account the existence of ‘qualified offer’ and other shareholder-friendly provisions.

    For pills designed to protect net operating losses, we may take into consideration a variety of factors, including but not limited to the size of the available operating losses and the likelihood that they will be utilized to offset gains.

    Cumulative Voting

    Under cumulative voting, each shareholder is entitled to the number of his or her shares multiplied by the number of directors to be elected. Shareholders have the flexibility to allocate their votes among directors in the proportion they see fit, including casting all their votes for one director. This is particularly impactful in the election of dissident candidates to the board in the event of a proxy contest.

    Dimensional will typically support proposals that provide for cumulative voting and against proposals to eliminate cumulative voting unless the portfolio company has demonstrated that there are adequate safeguards in place, such as proxy access and majority voting.

    Majority Voting

    For the election of directors, companies may adopt either a majority or plurality vote standard. In a plurality vote standard, the directors with the most votes are elected. If the number of directors up for election is equal to the number of board seats, each director only needs to receive one vote in order to be elected. In a majority vote standard, in order to be elected, a director must receive the support of a majority of shares voted or present at the meeting.

    Dimensional supports a majority (rather than plurality) voting standard for uncontested director elections. The majority vote standard should be accompanied by a director resignation policy to address failed elections.

    To account for contested director elections, portfolio companies with a majority vote standard should include a carve-out for plurality voting in situations where there are more nominees than seats.

    Supermajority Vote Requirements

    Dimensional believes that the affirmative vote of a majority of shareholders should be sufficient to approve items such as bylaw amendments and mergers. Dimensional will vote against proposals seeking to implement a supermajority vote requirement and for proposals seeking the adoption of a majority vote standard.

    Dimensional will vote against incumbent directors at portfolio companies that place substantial restrictions on shareholders' ability to amend bylaws.

    Right to Call Meetings and Act by Written Consent

    Dimensional will generally support the right of shareholders to call special meetings of a portfolio company board (if they own 25% of shares outstanding) and take action by written consent.

    Proxy Access

    Dimensional will typically support management and shareholder proposals for proxy access that allow a shareholder (or group of shareholders) holding three percent of voting power for three years to nominate up to 25 percent of a portfolio company board. Dimensional will typically vote against proposals that are more restrictive than these guidelines.

    Amend Bylaws/Charters

    Dimensional believes that shareholders should have the right to amend a company’s bylaws. Dimensional will vote against incumbent directors at portfolio companies that place substantial restrictions on shareholders' ability to amend bylaws.

    Exclusive Forum

    Dimensional is generally supportive of management proposals to adopt an exclusive forum for shareholder litigation.

    Auditors

    Dimensional will typically support the ratification of auditors unless there are concerns with the auditor's independence, the accuracy of the auditor's report, the level of non-audit fees, or if lack of disclosure makes it difficult to assess these factors.

    In addition to voting against the ratification of the auditors, Dimensional may also vote against Audit Committee members in instances of fraud, material weakness, or significant financial restatements.

    Stock-Based Compensation Plans

    Dimensional supports the adoption of equity plans that align the interests of portfolio company board, management, and company employees with those of shareholders.

    Dimensional will evaluate equity compensation plans on a case-by-case basis, taking into account the potential dilution to shareholders, the company's historical use of equity, and the particular plan features.

    Dimensional will typically vote against plans that have features that have a negative impact on shareholders. Such features include single-trigger or discretionary vesting, an overly broad definition of change in control, a lack of minimum vesting periods for grants, and the ability to reprice shares without shareholder approval.

    Dimensional may also vote against equity plans if problematic equity grant practices have contributed to a pay for performance misalignment.

    Employee Stock Purchase Plans

    Dimensional will generally support qualified employee stock purchase plans (as defined by Section 423 of the Internal Revenue Code), provided that the purchase price is no less than 85 percent of market value, the number of shares reserved for the plan is no more than ten percent of outstanding shares, and the offering period is no more than 27 months.

    Supplemental Executive Retirement Plans

    Dimensional will generally support shareholder proposals that ask the company to put to shareholder vote extraordinary benefits such as credit for years of service not actually worked, preferential benefit formulas, or accelerated vesting of pension benefits contained in supplemental executive retirement plan (SERP).

    Advisory Votes on Executive Compensation (Say on Pay)

    Dimensional supports reasonable compensation for executives that is clearly linked to the company’s performance. Compensation should serve as a means to align the interests of executives with those of shareholders. To the extent that compensation is excessive, it represents a transfer to management of shareholder wealth. Therefore, Dimensional reviews proposals seeking approval of a company’s executive compensation plan closely, taking into account the quantum of pay, company performance, and the structure of the plan.

    Certain practices, such as:
    • multi-year guaranteed bonuses
    • excessive severance agreements (particularly those that vest without involuntary job loss or diminution of duties or those with excise-tax gross-ups)
    • single, or the same, metrics used for both short-term and long-term executive compensation plans may encourage excessive risk-taking by executives and are generally opposed by Dimensional.


    At portfolio companies that have a history of problematic pay practices or excessive compensation, Dimensional will consider the company’s responsiveness to shareholders’ concerns and may vote against members of the compensation committee if these concerns have not been addressed.

    Frequency of Say on Pay

    Executive compensation in the United States in typically composed of three parts: 1) base salary; 2) cash bonuses based on annual performance (short-term incentive awards); 3) and equity awards based on performance over a multi-year period (long-term incentive awards).

    Dimensional supports triennial say on pay because it allows for a longer-term assessment of whether compensation was adequately linked to company performance. This is particularly important in situations where a company makes significant changes to their long-term incentive awards, as the effectiveness of such changes in aligning pay and performance cannot be determined in a single year.

    If there are serious concerns about a company's compensation plan in a year where the plan is not on the ballot, Dimensional may vote against members of the Compensation Committee.

    Clawback Provisions

    Dimensional typically supports clawback provisions in executive compensation plans as a way to mitigate risk of excessive risk taking by executives.

    Executive Severance Agreements (Golden Parachutes)

    Dimensional analyzes golden parachute proposals on a case-by-case basis.

    Dimensional expects payments to be reasonable on both an absolute basis and relative to the value of the transaction. Dimensional will typically vote against agreements with cash severance of more than 3x salary and bonus.

    Dimensional expects vesting of equity to be contingent on both a change in control and a subsequent involuntary termination of the employee (“double-trigger change in control”).

    Remuneration of Directors

    Dimensional will support director compensation that is reasonable in both size and composition relative to industry and market norms.

    Mergers and Acquisitions (M&A)

    Dimensional's primary consideration in evaluating mergers and acquisitions is maximizing shareholder value. Given that we believe market prices reflect future expected cash flows, an important consideration is the price reaction to the announcement, and the extent to which the deal represents a premium to the pre-announcement price. Dimensional will also consider the strategic rationale, potential conflicts of interest, and the possibility of competing offers.

    Dimensional may vote against deals where there are concerns with the acquisition process or where there appear to be significant conflicts of interest.

    Reincorporation

    Dimensional will evaluate reincorporation proposals on a case-by-case basis.

    Dimensional may vote against reincorporations if the move would result in a substantial diminution of shareholder rights.

    Increase Authorized Shares

    Dimensional will vote case-by-case on proposals seeking to increase common or preferred stock, taking into account the purpose for which the shares will be used and the risk to shareholders of not approving the request.

    Dimensional will typically vote against requests for common or preferred stock issuances that are excessively dilutive relative to common market practice.

    Dimensional will typically vote against proposals at portfolio companies with multiple share classes to increase the number of shares of the class with superior voting rights.

    Blank Check Preferred Stock

    Blank check preferred stock is stock that can be issued at the discretion of the board, with the voting, conversion, distribution, and other rights determined by the board at the time of issue. Therefore, blank check preferred stock can potentially serve as means to entrench management and prevent takeovers.

    To mitigate concerns regarding what we believe is the inappropriate use of blank check preferred stock, Dimensional expects portfolio companies seeking approval for blank preferred stock to clearly state that the shares will not be used for anti-takeover purposes.

    Dual Classes of Stock

    Dual class share structures are generally seen as detrimental to shareholder rights, as they are accompanied by unequal voting rights. Dimensional believes in the principle of one share, one vote.

    Dimensional opposes the creation of dual-class share structures with unequal voting rights and will vote against proposals to create or continue dual-class capital structures.

    Dimensional will vote against directors at portfolio companies that adopt a dual-class structure without shareholder approval after the company’s IPO. Implementation of a dual-class structure prior to or in connection with an IPO may not per se warrant a vote against directors but will be considered on a case-by-case basis.

    Shareholder Proposals

    When evaluating shareholder proposals, including proposals on environmental and social issues, Dimensional considers the most important factor to be whether adoption of the proposal is likely to enhance or protect shareholder value.

    Dimensional will also consider the potential cost to the portfolio company, the portfolio company’s current handling of the issue (both on an absolute basis and relative to peers), and whether the issue would be better addressed through legislation or government regulation.

    Director Election Guidelines for Europe, the Middle East, and Africa (EMEA)


    Dimensional will leverage its global framework when evaluating EMEA portfolio companies, but will apply the following market-specific considerations when voting on directors.

    United Kingdom

    Dimensional expects portfolio companies to follow the requirements of the UK Corporate Governance Code with regards to board and committee composition.

    France

    All portfolio company boards should be at least one-third independent; for non-controlled companies, at least half of board members (excluding those appointed pursuant to French law) should be independent.

    Executives should not serve on audit and remuneration committees. Dimensional will vote against executives who serve on these committees. Dimensional prefers the role of chairman and CEO to be separated; however, Dimensional may support a combined role if the board has a lead independent director with specific responsibilities, including the setting of meeting agendas.

    Dimensional will typically vote against the election of censors, but may consider providing support if the censor is to serve on an interim basis.

    Germany

    All portfolio company boards should be at least one-third independent; for non-controlled companies, at least half of board members (excluding employee-elected representatives) should be independent.

    Absent exceptional circumstances, Dimensional expects the role of chairman and CEO to be separated and will vote against the election of a director to serve in a combined role. Dimensional will generally also vote against the appointment of a former CEO as Chairman.

    Switzerland

    For all companies, boards should be at least one-third independent; for non-controlled companies, at least half of board members should be independent.

    Executives should not serve on audit and remuneration committees. Dimensional will vote against executives who serve on these committees. Additionally, Dimensional expects these committees to be majority independent and will vote against non-independent nominees if their election would result in the committee being less than majority independent.

    Dimensional expects the role of chairman and CEO to be separated and will generally vote against the election of a director to serve in a combined role.

    South Africa

    Dimensional expects portfolio companies to follow the recommendations of the King Report On Corporate Governance (King Code IV) with regards to board and committee composition.

    Proxy Voting Principles for Australia


    Uncontested Director Elections

    Shareholders elect the board of a portfolio company to represent their interests and oversee management and expect portfolio company boards to adopt policies and practices that align the interests of the board and management with those of shareholders and limit the potential for conflicts of interest.

    One of the most important measures aimed at ensuring that portfolio company shareholders’ interests are represented is an independent board of directors, made up of individuals with the diversity of backgrounds, experiences, and skill-sets needed to effectively oversee management and manage risk. We expect portfolio company boards to be majority independent.

    Dimensional believes that key audit and remuneration committees should be composed of independent directors. Dimensional will vote against executive directors, other than the CEO, who serve on the audit committee or who serve on the remuneration committee if the remuneration committee is not majority independent.

    CEO/Chair

    If a portfolio company’s board chair is not independent, the board should have a lead independent director with specific responsibilities, including the setting of meeting agendas. Dimensional may vote against executive board chairs if such measures are absent.

    Auditors

    Australian law does not require the annual ratification of auditors; therefore, concerns with a portfolio company's audit practices will be reflected in votes against members of the audit committee.

    Dimensional may vote against audit committee members if there are concerns with the auditor's independence, the accuracy of the auditor's report, the level of non-audit fees, or if lack of disclosure makes it difficult to assess these factors.

    Dimensional may also vote against audit committee members in instances of fraud or material failures in oversight of audit functions.

    Share Issuances

    Dimensional will evaluate requests for share issuances on a case-by-case basis, taking into account factors such as the impact on current shareholders and the rationale for the request.

    When voting on approval of prior share distributions, Dimensional will generally support prior issuances that conform to the dilution guidelines set out in ASX Listing Rule 7.1.

    Share Repurchase

    Dimensional will evaluate requests for share repurchases on a case-by-case basis, taking into account factors such as the impact on current shareholders, the rationale for the request, and the company's history of repurchases. Dimensional expects repurchases to be made in arms-length transactions using independent third-parties.

    Dimensional may vote against plans that do not include limitations on the company's ability to use the plan to repurchase shares from third parties at a premium and limitations on the use of share purchases as an anti-takeover device.

    Constitution Amendments

    Dimensional will evaluate requests for amendments to a portfolio company's constitution on a case-by-case basis. The primary consideration will be the impact on the rights of shareholders.

    Non-Executive Director Compensation

    Dimensional will support non-executive director remuneration that is reasonable in both size and composition relative to industry and market norms. Dimensional will vote against components of non-executive director remuneration that are likely to impair a director's independence, such as options or performance-based remuneration.

    Equity Plans

    Dimensional supports the adoption of equity plans that align the interests of the portfolio company board, management, and company employees with those of shareholders.

    Companies should clearly disclose components of the plan, including vesting periods and performance hurdles.

    Dimensional may vote against plans that are exceedingly dilutive to existing shareholders. Plans that permit retesting or repricing will generally be viewed unfavorably.

    Proxy Voting Principles for Japan


    Uncontested Director Elections

    Shareholders elect the board of a portfolio company to represent their interests and oversee management and expect portfolio company boards to adopt policies and practices that align the interests of the board and management with those of shareholders and limit the potential for conflicts of interest.

    One of the most important measures aimed at ensuring that portfolio company shareholders’ interests are represented is an independent board of directors, made up of individuals with the diversity of backgrounds, experiences, and skill-sets needed to effectively oversee management and manage risk.

    At portfolio companies with a three-committee structure, Dimensional expects at least one-third of the board to be outsiders. Ideally, the board should be majority independent.

    At portfolio companies with an audit committee structure, Dimensional expects at least one third of the board to be outsiders. Ideally, the audit committee should be entirely independent; at minimum, any outside directors who serve on the committee should be independent.

    At portfolio companies with a statutory auditor structure, Dimensional expects the board to include at least two outside directors. At portfolio companies with a statutory auditor structure that have a controlling shareholder, at least two directors should be independent outsiders.

    Statutory Auditors

    Statutory auditors are responsible for effectively overseeing management and ensuring that decisions made are in the best interest of shareholders. Dimensional may vote against statutory auditors who are remiss in their responsibilities.

    When voting on outside statutory auditors, Dimensional expects nominees to be independent and to have the capacity to fulfill the requirements of their role as evidenced by attendance at meetings of the board of directors or board of statutory auditors.

    Director and Statutory Auditor Compensation

    Dimensional will support compensation for portfolio company directors and statutory auditors that is reasonable in both size and composition relative to industry and market norms.

    When requesting an increase to the level of director fees, Dimensional expects portfolio companies to provide a specific reason for the increase. Dimensional will support an increase of director fees if it is in conjunction with the introduction of performance-based compensation, or where the ceiling for performance-based compensation is being increased. Dimensional will not support an increase in director fees if there is evidence that the directors have been remiss in effectively overseeing management or ensuring that decisions made are in the best interest of shareholders.

    Dimensional will typically support an increase to the statutory auditor compensation ceiling unless there is evidence that the statutory auditors have been remiss in effectively overseeing management or ensuring that decisions made are in the best interest of shareholders.

    Dimensional will support the granting of annual bonuses to portfolio company directors and statutory auditors unless there is evidence the board or the statutory auditors have been remiss in effectively overseeing management or ensuring that decisions made are in the best interest of shareholders.

    Dimensional generally supports the granting of retirement benefits to portfolio company insiders, so long as the individual payments, and aggregate amount of such payments, is disclosed.

    Dimensional will vote against the granting of retirement bonuses if there is evidence the portfolio company board or statutory auditors have been remiss in effectively overseeing management or ensuring that decisions made are in the best interest of shareholders.

    Equity Based Compensation

    Dimensional supports the adoption of equity plans that align the interests of the portfolio company board, management, and company employees with those of shareholders.

    Dimensional will typically support stock option plans to portfolio company executives and employees if total dilution from the proposed plans and previous plans exceeds 5 percent for mature companies or 10 percent for growth companies.

    Dimensional will vote against stock plans if upper limit of options that can be issued per year is not disclosed.

    For deep-discounted stock option plans, Dimensional typically expects portfolio companies to disclose specific performance hurdles.

    Capital Allocation

    Dimensional will typically support well-justified dividend payouts that do not negatively impact the company's overall financial health.

    Share Repurchase

    Dimensional is typically supportive of portfolio company boards having discretion over share repurchases absent concerns with the company's balance sheet management, capital efficiency, buyback and dividend payout history, board composition, or shareholding structure.

    Dimensional will typically support proposed repurchases that do not have a negative impact on shareholder value.

    For repurchases of more than 10 percent of issue share capital, Dimensional expects the company to provide a robust explanation for the request.

    Shareholder Rights Plans

    We believe the market for corporate control, which can result in acquisitions that are accretive to shareholders, should be able to function without undue restrictions. Takeover defenses such as poison pills can lead to entrenchment and reduced accountability at the board level.

    Indemnification and Limitations on Liability

    Dimensional generally supports limitations on liability for directors and statutory auditors in ordinary circumstances.

    Limit Legal Liability of External Auditors

    Dimensional generally opposes limitations on the liability of external auditors.

    Increase in Authorized Capital

    Dimensional will typically support requests for increases of less than 100 percent of currently authorized capital, so long as the increase does not leave the company with less than 30 percent of the proposed authorized capital outstanding.

    For increases that exceed these guidelines, Dimensional expects portfolio companies to provide a robust explanation for the increase.

    Dimensional will not support requests for increases that will be used as an anti-takeover device.

    Expansion of Business Activities

    For well performing portfolio companies seeking to expand their business into enterprises related to their core business, Dimensional will typically support management requests to amend the company's articles to expand the company's business activities.

Voting and Issuer Communications

  • US-based mutual funds

    2018 CALENDAR YEAR

    The goal of Dimensional’s issuer communications and proxy voting efforts is to improve governance practices in a way that we believe may increase expected cash flows to investors or reduce the discount rate investors apply to future cash flows. To the extent these efforts do result in improved governance practices, we would expect shareholders to benefit from increases in company prices.

    The decision to speak to a company is made on a case-by-case basis, taking into account a number of factors, including the company's overall ESG profile and past proxy vote results. We see issuer communications as an opportunity to encourage our portfolio companies to adopt and maintain a strong corporate governance framework, with independent boards representing shareholders’ interests, including the avoidance and mitigation of environmental and social risks. A deeper understanding of the company also allows us to make more thoughtful, informed proxy voting decisions.

    Dimensional votes proxies at shareholder meetings globally to hold boards and management of portfolio companies accountable to best corporate governance standards. Dimensional believes that better governance practices will be reflected in higher security prices as a result of a combination of lower discount rates, higher cash flows and better risk management. As such, Dimensional believes proxy voting is an important means by which we advocate for the economic interest of our clients.

    Issuer Communications Summary

    ANNUAL ISSUER COMMUNICATIONS BY REGION

    ANNUAL ISSUER COMMUNICATIONS BY REGION
    Based on country of incorporation

    ANNUAL ISSUER COMMUNICATIONS BY TOPIC

    ANNUAL ISSUER COMMUNICATIONS BY TOPIC

      Voting Summary

      Dimensional's US Based Mutual Funds voted 129,301 distinct proposals at 14,845 meetings, representing 98 percent of eligible meetings. 1

      PROPOSALS VOTED ON, BY ISSUE2

      US proposals voted on by issue

      The "Director Elections" category includes the election of statutory auditors in Japan.
      "Board and Governance Related" includes proposals related to director compensation, board size and structure, voting standards, and shareholder access.
      "Routine Business Matters" includes a range of procedural matters, as well as proposals calling for the adjournment of meetings, votes on the frequency of say on pay, and the election of auditors.


      MEETINGS VOTED, BY REGION Meetings voted by region

      SUPPORT FOR MANAGEMENT AND SHAREHOLDER PROPOSALS

      Management Proposals

      Proposal Type Number of Proposals Voted Percentage Voted For Percentage Voted Against
      Antitakeover Related 209 45.9% 54.1%
      Capitalization 10,162 71.8% 28.2%
      Compensation 11,521 72.2% 27.8%
      Board and Governance Related 5,850 93.9% 6.1%
      Director Elections 65,921 89.1% 10.9%
      Routine Business Matters 30,261 93.9% 6.1%
       Reorganization and Mergers 4,069 87.2% 12.8%
      Total 127,993 87.3% 12.7%

      Shareholder Proposals

       Proposal Type Number of Proposals Voted Percentage Voted For Percentage Voted Against
      Compensation 87 34.5% 65.5%
      Director Elections 325 42.5% 57.5%
      Board and Governance Related 382 37.7% 62.3%
      Routine Business Matters 282 44.7% 55.3%
      Other 232 8.6% 91.4%
      Total 1,308 32.4% 67.6%

      1. Dimensional votes proxies wherever it is feasible and economical to do so. We may not vote in markets that have share-blocking, re-registration or other practices that impair our ability to sell voted shares. In addition, we consider the costs associated with voting (per vote charges, meeting representation fees, etc.) and vote in instances where the expected economic benefit of voting outweighs the costs for a given portfolio.
      2. Chart does not include categories that make up less than 0.5% of total votes. 

  • Sustainability funds

    2018 Voting Summary for US-Based Sustainability Funds

    Number of Meetings Voted     2,503
    Number of Proposals Voted     25,360

    SUPPORT FOR MANAGEMENT AND SHAREHOLDER PROPOSALS

    Management Proposals

    Proposal Type Number of Proposals Voted Percentage Voted For Percentage Voted Against
    Antitakeover Related 35 42.9% 57.1%
    Capitalization 1,293 98.5% 1.5%
    Compensation 2,689 82.1% 17.9%
    Director Elections 16,448 93.2% 6.8%
    Board and Governance Related 440 99.1% 0.9%
    Routine Business Matters 3,780 94.9% 5.1%
     Reorganization and Mergers 251 94.0% 6.0%
    Total 24,936 92.6% 7.4%

    Shareholder Proposals

     Proposal Type Number of Proposals Voted Percentage Voted For Percentage Voted Against
    Compensation 42 45.2% 54.8%
    Director Elections and Removal 28 25.0% 75.0%
    Routine Business Matters 54 7.4% 92.6%
    Environmental Proposals 22 86.4% 13.6%
    Board and Governance Related 192 25.5% 74.5%
    Other 86 0.0% 100.0%
    Total 424 23.1% 76.9%

    ENVIRONMENTAL PROPOSALS

    In 2018, Dimensional’s Sustainability funds voted on 22 environmental shareholder proposals. The proposals voted for and against are listed below.

    Votes in Favor

    Company Name Proposal Description
    American Financial Group, Inc. Report on Sustainability
    Domino's Pizza, Inc. Adopt Policy and Plan to Eliminate Deforestation in Supply Chain
    Emerson Electric Co. Adopt Quantitative Company-wide GHG Goals
    Flowserve Corporation Adopt GHG Emissions Reduction Goals
    Fluor Corporation Adopt Quantitative Company-wide GHG Goals
    Ford Motor Company Report on Fleet GHG Emissions in Relation to CAFE Standards
    General Mills, Inc. Report on Impact of Pesticides on Pollinators
    General Motors Company Report on Fleet GHG Emissions in Relation to CAFE Standards
    Genesee & Wyoming Inc. Adopt GHG Emissions Reduction Goals
    Illinois Tool Works Inc. Adopt and Report on Science-Based GHG Emissions Reduction Targets
    J.B. Hunt Transport Services, Inc. Adopt and Report on Science-Based GHG Emissions Reduction Targets
    L3 Technologies Inc. Adopt Quantitative Company-wide GHG Goals
    Michael Kors Holdings Limited Assess Feasibility of Adopting Quantitative Renewable Energy Goals
    Old Republic International Corporation Report on Steps Taken to Improve Board Oversight of Climate Change Risk
    Starbucks Corporation Report on Sustainable Packaging
    The Cooper Companies, Inc. Report on Feasibility of Net-Zero GHG Emissions
    The Kraft Heinz Company Assess Environmental Impact of Non-Recyclable Packaging
    The Kroger Co. Assess Environmental Impact of Non-Recyclable Packaging
    The Kroger Co.
    Report on Benefits of Adopting Renewable Energy Goals

    Votes Against


    Company Name(s)  Proposal Description Explanation of Vote

    Laurentian Bank of Canada
    Report on Climate Risk and Transition to a Low-Carbon Economy The funds voted against the proposal because the company provides adequate information on the exposure of the company's loan portfolio to carbon-intensive industries.
    McDonald's Corporation Report on Plastic Straws The funds voted against the proposal because the company provides sufficient information on its efforts to address the use of plastic straws.
    The Bank of New York Mellon Corporation Report on Climate Change Position and Proxy Voting The funds voted against the proposals because the company and its subsidiaries provide sufficient disclosure on their respective environmental policies. Additionally, it is the board of each fund, rather than the board of each company, are responsible for establishing the proxy voting policies of each fund.
  • Proxy Voting Records