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Dimensional's Influence on Companies Thumbnail

Dimensional's Influence on Companies

Dimensional Fund Advisors has been a valued partner of our firm since our founding almost 20 years ago. We utilize their stock mutual funds and ETFs as part of our Value Added IndexingTM investment approach. We are often asked about Dimensional's involvement in influencing management of the companies in which they invest. Dimensional refers to these efforts as "stewardship".

Stewardship at Dimensional is a global effort to protect and enhance shareholder value through engagements, proxy voting, and advocacy. Dimensional’s stewardship activities focus on these foundational issues of good governance:

  • Board Structure and Composition - Companies should elect strong, qualified boards with appropriate skill sets to oversee management and risks.
  •  Material Environmental and Social Risks - Company boards should exercise oversight of material risks and disclose these risks and their oversight.
  •  Shareholder Rights - Companies should maintain mechanisms for shareholders to raise concerns and hold boards and management accountable.
  •  Executive Compensation - Compensation plans should be based on rigorous and transparent metrics that clearly link pay and long-term performance.

Dimensional's Annual Stewardship Report details these initiatives.

David Rappaport, CFP®

David is the Co-Founder and Chief Investment Officer of Rappaport Reiches Capital Management. He acts as personal CFO to entrepreneurs and corporate executives, providing organization and clarity in their finances. Please connect with David below.  He loves to talk about investing, financial planning, and Aspiritech, a non-profit hiring individuals on the autism spectrum.

The author does not intend to provide investment, legal or tax advice as these materials are for general educational purposes only. Please consult your legal, tax or investment professional for advice on your particular situation. This material is derived from sources believed to be reliable, but its accuracy and the opinions based thereon are not guaranteed. It is not intended to be a solicitation, offer or recommendation to acquire or dispose of any investment or to engage in any other transaction. Investing involves risk including the possible loss of principal. Past performance does not guarantee future results. Please refer to RRCM’s Form ADV Part 2 for additional disclosures regarding RRCM and its practices.