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Gresham House plc

PRI reporting framework 2020

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Engagement

LEA 02. Reasoning for interaction on ESG issues

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

Type of engagement

Reason for interaction

Individual / Internal staff engagements
Collaborative engagements
Service provider engagements

02.4. Additional information. [Optional]

Service providers are not used for engagement because our Investment Managers maintain relationships directly with the Companies. Our investment managers have the requisite expertise, capability and capacity to influence businesses directly rather than going through others in the marketplace. This is in line with our hands-on and engaged investment style.

We believe that this is important in driving accountability and engagement with our investee companies, and ultimately creates better outcomes and value creation.


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 engagements.

Indicate the criteria used to identify and prioritise engagements for each type of engagement.
Type of engagement
Criteria used to identify/prioritise engagements
Individual / Internal staff engagements

Individual / Internal staff engagements

Collaborative engagements

Collaborative engagements

03.3. Additional information. [Optional]

Service providers are not used as the Investment Manager’s maintain relationships directly with the Companies as described in 2.4 above.


LEA 04. Objectives for engagement activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.
Indicate whether you define specific objectives for your organisation’s engagement activities.
Individual / Internal staff engagements
Collaborative engagements

04.2. Additional information. [Optional]

Prior to any engagement, objectives are identified and shared internally.

For each company we invest in we identify and agree strategic milestones that we expect the company to deliver on over the holding period. We typically identify 3 or 4 key strategic levers that are bespoke to the organisation and important to the development of the business, aiming to keep the directors focused and ensure continued progress.

Objectives shift over time depending on business priorities, market forces and stakeholder considerations, amongst other things. For example, objectives could include:

  • improvements to reporting, including ESG factors
  • board composition
  • improvements to governance arrangements
  • product or geographic expansion or variance, including due to ESG related market forces
  • staff retention and reduction of absence rates
  • implementing compliance programmes with forthcoming ESG legislation.

These provide a framework for objectives to discuss with the companies during our regular scheduled engagements with them. As an example, we identified the need in one of our investee companies to make improvements to the quality and composition of its board and worked with them to help identify a new non-executive director that could add material value to the business. We helped drive this to conclusion and introduced individuals into the process to assist.

In our engagements we also work with other significant shareholders to understand their perspectives or to seek support for improvements that need to be made.


LEA 05. Process for identifying and prioritising collaborative engagement

Indicate whether you monitor and/or review engagement outcomes.
Individual / Internal staff engagements
Collaborative engagements
Indicate whether you do any of the following to monitor and/or review the progress of engagement activities.
Individual / Internal staff engagements
Collaborative engagements

05.3. Additional information. [Optional]

As per our response in the previous section to 4.2, any objectives we discuss in our engagements will be tracked and reviewed. We see every investee company management team at least twice per year and where we hold bigger stakes we meet more frequently. During these meetings we discuss progress against objectives and any support they may require to implement changes in a timely manner. These objectives are also reviewed as part of the 6-month progress review, the output of which is reported to the Gresham House Investment Committee.


LEA 06. Role in engagement process

06.1. Indicate whether your organisation has an escalation strategy when engagements are unsuccessful.

06.2. Indicate the escalation strategies used at your organisation following unsuccessful engagements.

06.3. Additional information. [Optional]

As per our Stewardship Code, where engagements are unsuccessful these are reviewed on a case by case basis and if required meetings are organised with senior management or the board of the company.

We will typically maintain contact with other shareholders and are prepared to act collaboratively where that makes sense to generate change in the interests of our clients.

In certain circumstances, after other avenues of engagement have failed, we will use all available shareholder rights as part of the escalation of our engagement, including but not limited to:

  • lodging shareholder resolutions for forthcoming meetings
  • calling shareholder meetings
  • litigation

In certain circumstances we may also determine that it is in our client's interests to exit an investment.


LEA 07. Share insights from engagements with internal/external managers (Private)


LEA 08. Tracking number of engagements

08.1. Indicate whether you track the number of your engagement activities.

Type of engagement
Tracking engagements
Individual/Internal staff engagements​

Collaborative engagements

08.2. Additional information. [Optional]

All meetings are recorded on IT systems to enable our Investment Managers to look back upon if required.

The number of engagements can be tracked in several ways:

  • Meeting notes that are recorded, collated and shared using a Microsoft note sharing system
  • As part of those notes we typically record dates, attendees and subject matter discussed
  • These engagements also feed into portfolio company update papers
  • To ensure accuracy and rigour, support personnel in the investment team go through investment manager’s diaries on a monthly basis to ensure meetings have been captured appropriately
  • Ongoing completion of the ESG Asset Management Tool for each company provides a single repository for all relevant ESG information

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