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Engagement Report July 2019 Sustainability and Engagement at Boston Partners Engagement Report The Sustainability and Engagement Team (the “Team”) undertook the following engagement actions during July 2019: Issuer Calls, Meetings and Correspondence. 1. Fox Corporation (ticker symbol FOXA): FOXA is a news and entertainment company. The Team reached out to FOXA in February following research on the company. FOXA offered to connect after the spin-off of FOX from 21st Century Fox. The Team followed up, and the FOXA investor relations team set up an introductory call to start the conversation. The Team discussed concerns such as director independence and diversity and having an independent Board Chairman. 2. Hexcel Corporation (ticker symbol HXL): HXL develops, manufactures, and markets reinforcement products, composite materials, and engineered products. The Team emailed HXL following research on the company. The Team noted corporate governance concerns, such as director independence and shareholder rights. The Team encouraged HXL to provide more detailed safety and gender diversity information, as well as further information regarding supply chain management. The Team also inquired about recycling efforts and emissions. HXL’s Investor Relations representative responded to all relevant questions via email. 3. Brooks Automation, Inc. (ticker symbol BRKS): BRKS provides automation and cryogenic solutions. Representatives from BRKS reached out to the Team via email as part of its shareholder outreach program. The Team communicated that the firm supports the compensation program and sought an update on ESG matters. The Team continued to encourage BRKS to provide a corporate responsibility report in accordance with a standardized format, to provide shareholders the right to call special meetings and act by written consent, and to disclose more information regarding supplier oversight. 4. Boston Properties, Inc. (ticker symbol BXP): BXP is a real estate investment trust. An investor relations representative from BXP contacted the Team to seek feedback on the say-on-pay proposal and other matters. The Team communicated that the firm voted against two director nominees because they sit on more than three public company boards, which presents overboarding concerns. Further, Boston Partners voted against the compensation plan because the compensation committee continued the trend of lowering the portion of long-term equity that was performance-conditioned. Additionally, the annual cash bonus program remained highly discretionary, lacking sufficient transparency, while utilizing a very large number of metrics. The Team also had an in-person follow-up meeting with representatives from BXP to discuss the compensation plan. 5. Toll Brothers, Inc. (ticker symbol TOL): TOL builds luxury homes, as well as engages in own architectural, engineering, mortgage, title, security, landscape, insurance brokerage, and manufacturing operations. The Team emailed TOL following research on the company. The Team noted several governance concerns, such as director independence and shareholder rights. The Team also encouraged TOL to produce a sustainability report or provide relevant information on its website. Specifically, the Team requested more information regarding diversity in the workforce, injury rates, supplier code of conduct, environmental impact data, and relevant litigation. TOL’s Investor Relations representative sent a response letter via email. 6. Tesco PLC (ticker symbol TSCO LN): TSCO is a grocery retailer. The Team emailed TSCO following research on the company. The Team encouraged TSCO to provide information for all business segments and include additional data in the reporting, such as the number of substantiated whistleblower claims, detailed safety metrics, and employee turnover data. The Team also inquired about a Supplier Code of Conduct and the supplier due diligence program. The Team had a follow-up call with representatives from the company, during which TSCO provided more information about its supply chain management process. 7. Tullow Oil PLC (ticker symbol TLW LN): TLW LN is an oil and gas exploration and production company. The Team emailed TLW following research on the company. The Team encouraged TLW to increase the percentage of independent directors on the Board, to report employee turnover rates and employee training hours data, and to disclose supplier due diligence data. The Team also inquired about workforce engagement, communications with local populations and FPIC, contractor training on the Code of Ethical Conduct, Environmental and Social Impact Assessments, the low-carbon energy transition, and a decline in recycling rates. The Team plans to have a call with representatives from the company in August. 8. McKesson Corporation (ticker symbol MCK): MCK provides pharmaceuticals and medical supplies. MCK contacted the Team ahead of the annual general meeting to arrange an in-person discussion. MCK described recent leadership changes and the newly formed Compliance Committee. MCK noted a few directors are retiring in the next few years, two of whom are female; however, there is a phased transition to allow time to find the right candidates to join the Board. MCK explained the compensation program and how it has been simplified for FY20. MCK also addressed the two shareholders proposals, one for the disclosure of lobbying activities and expenditures and one to lower the threshold for shareholders to call special meetings to 10%. The Team communicated it would support the proposal related to shareholders’ right to call special meetings. Further, MCK discussed the state of the company’s involvement in the opioid crisis. 9. Lear Corporation (ticker symbol LEA): LEA produces automotive seating and electrical distribution systems. The Team emailed LEA in June following research on the company, and LEA offered to have a call to address our questions and concerns. LEA reported that GRI alignment is in progress. LEA is considering disclosing supplier due diligence data and highlighted its participation in the Automotive Industry Action Group (AIAG). LEA recognizes there are opportunities to be more transparent and is considering these. LEA communicated its plans to include descriptive whistleblower statistics in future reports. LEA also described the safety training program and noted future CRR reports will include a better overview of the program. LEA explained it is working to polish its internal assurance process before seeking external verification. LEA highlighted diversity on the Board and noted there are two women directors, one African American director, and one Asian director. LEA also addressed the Team’s concerns about shareholder rights and expressed they felt the company’s policies were shareholder-friendly. 10. Nutrien Ltd. (ticker symbol NTR): NTR is a fertilizer manufacturer. NTR reached out to the Team as part of an effort to engage with top shareholders on their views of ESG. NTR is conducting research to understand what investors are seeking. NTR had a set of questions to ask the Team. The Team described Boston Partners’ investment process and perspective on ESG matters. 11. DXC Technology Company (ticker symbol DXC): DXC is an information technology company. DXC reached out to the Team in advance of the annual meeting. The Team communicated that Boston Partners planned to support all the 2 proposals at this year’s meeting with the exception of the election of one director who sits on more than three public company boards. 12. GlaxoSmithKline plc (ticker symbol GSK): GSK is a pharmaceutical company. GSK commissioned Rivel Research Group to perform a study of investor and analyst views toward the company, particularly regarding ESG and corporate responsibility. The Team participated in an interview and responded to questions about GSK’s ESG program and company strategy, and how it compares to peer organizations. The Team highlighted GSK’s strong disclosure and indicated GSK performs well in the ESG space. Correspondence from Issuers: The Team received the following correspondence from issuers in response to the Team’s communication to such issuers. 1. Eaton Corporation plc. Eaton’s corporate secretary responded to Boston Partners’ letter of May 16, 2019. Eaton noted that Boston Partners had voted against the election of Director Sandra Pianalto because Ms. Pianalto served on more than 3 public company boards. Eaton’s position is that a director is deemed to be overboarded if the director serves on more than 5 public company boards and that Ms. Pianalto served on 4 public company boards. Eaton also noted that Boston Partners had voted against a proposal to authorize the issuance of equity without pre-emptive rights because it would exceed 10 percent of the issued shares. Eaton explained that the share amounts to be issued were solely 10 percent and not in excess of 10 percent. 2. Key Energy Services, Inc. The Chairman of the Board of Key responded to Boston Partners’ letter regarding proxy matters. Key noted that Boston Partners had voted against the election of Robert J. Saltiel because he is a non- independent director, the full board was less than majority independent and he is a member of the nominating and governance committee. Key noted that it is a controlled company under NYSE rules that permits an issuer to not have a majority of directors be independent directors and only the audit committee was required to be comprised of exclusively independent directors. Key did note that, effective May 1, 2019, Saltiel was removed
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