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Genesis Investment Management, LLP

PRI reporting framework 2018

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You are in Direct - Listed Equity Active Ownership » Engagement

Engagement

Overview

LEA 01. Description of approach to engagement

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate whether your organisation has a formal engagement policy.

01.2. Attach or provide a URL to your engagement policy.

01.3. Indicate what your engagement policy covers: 

          Our approach to engagement document also covers priorities (alignment of interests with minority shareholders, escalation of concerns and collaborative efforts.

01.4. Provide a brief overview of your organization’s approach to engagement

Genesis views engagement as the purposeful communication with company management on a wide range of matters which have a material impact on long-term shareholder value including strategy, capital structure, performance, risk and corporate governance.  We do not make an investment without engaging with company reporesentatives (usually several times).  In 2017, we conducted over 900 interviews with companies (potential and existing investments, competitors and supply chain entities) to develop our knowledge of individual companies and to allow a comparison with peers and competitors globally, including in developed markets.

01.6. Additional information [optional]

We consider engagement as an integral research tool used to develop our in-depth knowledge of emerging market companies and to assess the quality of management of these companies.  Company engagements are conducted directly by our Investment Team via regular meetings, site visits, calls and correspondence.

LEA 02. Reasoning for interaction on ESG issues

02.1. Indicate the method of engagement, giving reasons for the interaction.

Type of engagement

Reason for interaction
Individual/Internal staff engagements 
          To  verify, challenge and interrogate data on a wide range of matters materially  impacting shareholder value - strategy, capital structure, performance risk and corporate governance.
Collaborative engagements
Service provider engagements

Please specify why your organisation does not engage via service providers.

Company engagements are conducted directly by our Investment Team via regular meetings, site visits, calls and correspondence.

02.2. Additional information. [Optional]

We may on limited occasions join with other shareholders and collectively engage with management of a company where this is considered to be the most effective course of action.  Any collective engagement would be undertaken with due regard to the relevant regulatory provisions concerning acting in concert and insider dealing.

Process

Process for engagements run internally

LEA 03. Process for identifying and prioritising engagement activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.

03.1. Indicate whether your organisation has a formal process for identifying and prioritising engagement activities carried out by internal staff.

03.2. Describe the criteria used to identify and prioritise engagement activities carried out by internal staff.

other description 

          Engagement issues (ESG and others) are based on materiality to long-term shareholder value. The priorities for such interactions are tailored to each company.

03.3. Additional information. [Optional]

Genesis views engagement as the purposeful communication with company management on a wide range of matters which have a material impact on long-term shareholder value including strategy, capital structure, performance, risk and corporate governance.The priorities for engagements are tailored to each company by the stock owner and reflect their view of the current and future prospects of the particular company as a position in client portfolios.  The stock owner records the details of company engagements in a central database which allows information and expertise to be shared across the Investment Team. 

LEA 04. Objectives for engagement activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.

04.1. Indicate if you define specific objectives for your engagement activities.

04.2. Indicate if you monitor the actions that companies take during and following your engagements activities carried out by internal staff.

04.3. Indicate if you do any of the following to monitor and evaluate the progress of your engagement activities carried out by internal staff.

other description 

          Monitoring, timelines and/or objectives are specific to each company and determined by the portfolio manager.  Not all engagements necessitate concrete objectives.

04.4. Additional information. [Optional]

Engagement activities are an integral research tool used to inform the overall investment and proxy voting process with respect to such company.  The objectives of all engagements with companies are tailored to the specific company.

Our aim is to build long-term relationships with companies and have frank and constructive communications with them. As a result we have a strong preference that such engagement activities remain private.

Process for engagements conducted via collaborations

LEA 05. Process for identifying and prioritising collaborative engagement

New selection options have been added to this indicator. Please review your prefilled responses carefully.

05.1. Indicate whether your organisation has a formal process for identifying and prioritising collaborative engagements

05.3. Additional information [Optional]

Collaborative engagement opportunities are evaluated on a case-by-case basis.

LEA 06. Objectives for engagement activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.

06.1. Indicate if you define specific objectives for your engagement activities carried out collaboratively.

06.2. Indicate if you monitor the actions companies take during and following your collaborative engagements.

06.3. Indicate if you do any of the following to monitor and evaluate the progress of your collaborative engagement activities.

06.4. Additional information. [Optional]

As noted, collaborative engagements are the exception.  

Process for engagements conducted with/on your behalf by service providers

LEA 07. Role in engagement process (Not Applicable)

LEA 08. Monitor / discuss service provider information (Not Applicable)

General processes for all three groups of engagers

LEA 09. Share insights from engagements with internal/external managers

09.1. Indicate if insights gained from your engagements are shared with your internal or external investment managers.

Type of engagement

Insights shared

Individual/Internal staff engagements

Collaborative engagements

09.2. Additional information. [Optional]

Internal communication and interaction between team members, either as a large group or (more frequently) in smaller groups of two or three, is key to the success of our process. 

We maintain a central database for all notes from meetings with company management.  This is available to all members of the Investment Team.

LEA 10. Tracking number of engagements

10.1. Indicate if you track the number of your engagement activities.

Type of engagement
Tracking engagements

Individual / Internal staff engagements

Collaborative engagements

10.2. Additional information. [OPTIONAL]

We maintain notes on all material interactions with investee companies.  These are available to the full Investment Team.  As noted, we interact with company management on a variety of issues which are not limited to meetings to influence (or identify the need to influence) ESG practices and/or improve ESG disclosure.  These notes are referred to by the portfolio manager on a regular basis for monitoring company performance and analysis.

We do not currently track ESG interactions as a subset of all interactions with companies.  Typically ESG issues are covered in conjunction with other material matters.

Outputs and outcomes

LEA 11. Number of companies engaged with, intensity of engagement and effort (Private)

LEA 12. Engagement methods (Private)

LEA 13. Companies changing practices / behaviour following engagement (Private)

LEA 14. Examples of ESG engagements (Private)

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