Our Corporate Governance

Policies
As part of our ongoing commitment we would like to advise you of our dedication to our corporate governance policies, the formal way we acknowledge trust. Corporate governance means having the appropriate policies, structures and procedures in place to ensure the independence of the board of directors of a corporation from its management to ensure that the corporation is appropriately managed and directed. The objective of good corporate governance is to ensure that companies are not only well run and profitably managed, but also to ensure that they adhere to high standards of legal and ethical principles as well as conduct.
In the mutual fund industry, good corporate governance is an important consideration for portfolio managers in choosing the right companies in which to invest. The equivalent concept for mutual fund investors themselves is fiduciary responsibility; the obligation fund managers have to their securityholders to manage fund assets in a prudent fashion.
At Stone, we are committed to our responsibilities on behalf of all those who invest with us. In particular, we are committed to ensuring:
  1. Preservation of investor capital through long-term growth exceeding the rate of inflation with an acceptable level of risk as defined by each fund's Investment Mandate and Policy Statement.
  2. That each individual investment within fund portfolios reflects proper corporate governance standards, while still allowing management to maximize shareholder value.
A member of the Investment Group oversees each fund's portfolio holdings with respect to corporate governance issues.
Stone has established an Independent Review Committee to provide advice to Stone regarding conflicts of interest in mutual fund management.
In everything we do at Stone & Co. Limited, our goal is to provide investors with clarity, comfort and commitment by:
  • Protecting fund assets.
  • Ensuring that all regulatory requirements are satisfied.
  • Ensuring that the investment process and each fund's Investment Mandate are adhered to.
  • Ensuring that operational systems function properly and Net Asset Value calculations are calculated correctly.
  • Ensuring that the company and industry Code of Ethics are adhered to and that all staff go about their work with the best interests of our investors first.
 
Overview of Proxy Voting
In most cases, public companies have voting rights associated with their stock holdings. Voting rights give shareholders the opportunity to vote at the company's annual and special company meetings. Rather than attend each meeting in person, most shareholders generally submit their votes by proxy. Stone Asset Management Limited is responsible for executing these voting rights on behalf of the mutual funds it manages, including the Stone Funds.
Typically the agenda for each company meeting includes multiple proposals, for example: adoption of a stock option plan, election of Directors, or approval of a merger or acquisition. Usually proposals are put forth by the company's management, but shareholders may also make submissions for consideration. The company's management provides a voting recommendation for each proposal, and each proposal is evaluated separately by Stone Asset Management according to our established Proxy Voting Guidelines.
 
Stone Asset Management's Approach to Voting Proxies
Stone Asset Management votes on behalf of Stone Funds according to established Proxy Voting Guidelines. Stone Asset Management's approach to proxy voting decisions is consistent with our approach to investment decisions: we evaluate proposals on their economic merit and support those that are most likely to enhance shareholder value.
To the extent that the management of companies Stone Funds are invested in are committed and incentivized to maximize shareholder value, we generally will follow their recommendation for voting proxy shares. However, in each year our proxy voting guidelines do result in our submitting a number of votes contrary to the recommendations of management. A common example would be voting against overly dilutive stock compensation plans that do not align the interests of shareholders with those of management.
There are some circumstances in which Stone Asset Management may be prevented from voting at certain company meetings due to trading restrictions that can be placed on voted shares. Situations of this nature generally occur in foreign countries, where voted shares are restricted from trading from the time the vote is cast until the following day. However in all cases, Stone Asset Management's voice will ultimately be heard by the level of ownership the Stone Funds maintain in the company in question.
 
Obtaining Proxy Voting Results
The annual proxy voting results for Stone are available on this website. You may review the results by clicking here or through Proxy Information located in the Products section of the Stone Website.
 
Answers to Frequently Asked Questions
Have a question about Stone's Corporate Policies? Send us an e-mail, and we'll post the most frequently asked questions with answers in this area of the website.