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At the heart of Riverbridge’s investment process is conversations with management teams about their long-term objectives, strategy, and vision. Through this engagement, we seek to discern if a company is positioned for enduring success. A strong ESG profile makes a company an attractive investment candidate, as companies that manage their resources well are more competitive, take market share, have strong cultures and engaged employees, improve the industries in which they participate, and better the lives of their customers.
We also recognize that business activities impact a broad range of stakeholders which must be considered when assessing the sustainability of a company’s earnings power. Our peer review process involves engagement with customers, suppliers, competitors, partners, and employees, allowing us to understand a company’s reputation and position within its sphere of relevance. The objective is to discover whether a business is cultivating the necessary relationships with a broad range of stakeholders that will allow it to thrive for decades.
We seek to offer our perspective and learn from leaders as frequently as possible. We generally do not, however, seek to alter the behavior of the management teams we invest in. Rather than owning companies that underperform on traditional ESG metrics and hoping they become better through activism, Riverbridge buys best in class companies which display the capability to continue to be leaders in their markets and industries. If management teams must be convinced of the link between a strong ESG profile and a sustainable business, they are not a good fit for our strategies.
Riverbridge’s policy is to vote all proxies for the exclusive benefit of the accounts whose assets we manage. We believe that strong environmental, social, and governance practices are crucial for long-term value creation. Therefore, in most, if not all cases, proposals which maximize the value of portfolio securities over the long term will be approved with consideration for the ESG issues that aid in this objective. Our proxy voting policy and procedures can be found here.