Investment Stewardship

This document describes Dimensional’s approach to investment stewardship.

View the Statement

This document describes Dimensional’s approach to responsible investing.

View the Statement

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 30, 2024.

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, including how we take issues of sustainability into consideration when making voting determinations 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 Investment Stewardship 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 investment stewardship 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 portfolio company management, maintaining a monitored email address ([email protected]) where these and other stakeholders may contact Dimensional with corporate governance related material or meeting requests. Dimensional’s Investment Stewardship Group members are available to respond to engagement requests, as appropriate, and also reach out to portfolio companies to gather information necessary to make informed proxy voting decisions. By exercising our voice to inform companies of our views on good governance, including with regard to how company boards disclose how they manage ESG risk, we believe that we can help promote their sustainable growth.¹

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 or enhance 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 in response to the client’s specific request. Dimensional and its affiliates publicly disclose on Dimensional’s and its affiliates’ websites the full voting history for all of Dimensional commingled funds, which includes disclosure of all of the voting history for Japanese portfolio companies. While we do not publicly disclose our rationale for all votes, we will convey our rationale for certain votes directly to portfolio companies if we believe that doing so may further our efforts to improve their governance. In addition, to help clients better understand our approach to proxy voting, we may also include rationales for certain votes in our Annual Stewardship Report and in our Annual Review of Commitments under the Japan Stewardship Code, both of which can be found on this page.

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 and publish our Annual Stewardship Report on our website. For separate account mandates, we also provide our clients with periodic updates on our voting activities if required in our agreements with them or in response to 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 develop skills and resources needed to appropriately engage with the companies and to make proper judgments in fulfilling their stewardship activities based on in-depth knowledge of the investee companies and their business environment and consideration of sustainability consistent with their investment management strategies.

The Investment Committee at Dimensional is generally responsible for overseeing the proxy voting process.  The Investment Committee has formed the Investment Stewardship Committee, which includes many of the firm’s most senior investment personnel. The Committee oversees the firm’s stewardship activities and is responsible for the firm’s investment stewardship policy. Dimensional also has an Investment Stewardship 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 portfolio companies, including daily market news, proxy voting research, and external corporate governance networks. We regularly review and update the data sources used to help facilitate our stewardship efforts.

In addition, 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, Harvard Law School Institutional Investor Forum and the Investment Company Institute (ICI). With regard to ICI, Dimensional also participates in several ESG working groups sponsored by the ICI.

Principle 8: Service providers for institutional investors should endeavor to contribute to the enhancement of the functions of the entire investment chain by appropriately providing services for institutional investors to fulfill their stewardship responsibilities.

As we are frequently responsible for the proxy voting decisions for our clients, we endeavor to assist our clients in fulfilling their stewardship responsibilities by conducting our proxy voting processes as discussed above and in accordance with Dimensional’s Proxy Voting Policies, which describe the procedures we follow in the event of a conflict of interest and are available as set out above.

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, 2023 to October 31, 2024, we took the following actions:

• The Proxy Voting Policies and Procedures were updated to reflect that there are three implementations of the Proxy Voting Guidelines: one standard implementation, one for the portfolios and accounts that incorporate social considerations in their design, and one for the portfolios and accounts that incorporate sustainability considerations in their design.  A separate account client may select one of these three implementations to be used for their account. We also provided additional disclosure on how we vote in certain Asian markets.
  
  
• Disclosed vote rationales for significant votes at Japanese portfolio companies (see “Vote Rationales for Selected Proposals” below). 
  
  
• Held quarterly meetings of our Investment Stewardship Committee, which oversees governance activities and develops investment stewardship policies.
  
  

• Reviewed costs of voting for each Dimensional fund and accounts we manage (to the extent that information is available to Dimensional).
  
  
• Reviewed the capacity and competency of our proxy research providers through due diligence questionnaires and meetings.
  
  

• Voted at over 2,200 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 during the reporting period.
  
  
• Conducted 33 engagements about issues including board structure and composition, oversight of environmental and social risks, human capital management, and related party transactions, with management teams and dissident shareholders at 30 Japanese companies.²
  
  
• Participated in industry events, including conferences held by the Council of Institutional Investors and the Harvard Law School Institutional Investor Forum.
  
  

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 Vote Rationales for Selected Proposals, please click here.

¹Dimensional acquires securities on behalf of its clients solely for the purpose of investment and not with the purpose or intended effect of changing or influencing the control of any portfolio company.

²Engagements may include phone calls, virtual meetings, in-person meetings, or written correspondence.

Who is responsible for Investment Stewardship at Dimensional?

Dimensional’s global investment stewardship activities are managed by the Investment Stewardship 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 Investment Stewardship Committee, comprised of senior management, is responsible for overseeing the Investment Stewardship 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 Investment Stewardship Group?

The group may be contacted via email: [email protected].

These documents describe Dimensional’s approach to corporate governance and proxy voting. Each guidelines summary corresponds to the funds or accounts that follow the relevant guidelines.

• Standard Guidelines
• Sustainability Guidelines
• Social Guidelines