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Prosperity Capital Management

PRI reporting framework 2020

You are in Strategy and Governance » Innovation


SG 18. Innovative features of approach to RI

18.1. 責任投資へのアプローチの特徴が特に革新的であるかどうかについて説明してください。

18.2. 特に革新的だと思う責任投資へのアプローチの特徴について説明してください。

“We always tell ourselves that we own parts of actual companies, not simply pieces of paper. Our holdings represent stakes in commercial organisations, that can always be further developed and better-managed. They are not just share certificates that someone might pay more for tomorrow.”

Mattias Westman, Founder

Each shareholder owns a part of the business that they invest in and have the same rights. This means that PCM is a stakeholder in the firms in which we invest on behalf of our shareholders and that it is our job to try to ensure that management works for the benefit of all shareholders.

This activist approach can be expressed in three ways. We engage with the corporate management and core shareholders of the business to discuss issues of corporate governance and corporate finance. This is generally seen as a positive contribution and welcomed by the other stakeholders. Another form is where good corporate governance practices have been or are at risk of being breached. In such cases, we take action to resolve a potential conflict or to minimise the damage where a conflict has already arisen. This activity can take many forms from negotiations, appeals to the regulatory authorities or, in some cases, legal action. The third avenue of our active approach is working with the government, regulators and legislators to improve the overall investment climate.

An active investment approach means helping to make our companies more profitable and valuable. PCM is often a large minority shareholder in many of our Funds’ investee companies, which often helps us achieve these objectives. PCM refers to this investment approach as “constructive activism”.

In addition to this, PCM works in isolation with partners and as part of established institutions and initiatives to promote and develop improved corporate governance standards across the investment region. This means that PCM regularly and actively engages with the government, financial market institutions and regulators and other market participants to advocate and help implement enhancement to Russia's corporate governance codes, practices and standards.

PCM strongly believes that good governance standards and practices will also manifest in appropriate and strong environmental and social standards and policies. As such, we feel that our work on seeking to drive corporate governance standards will not only improve the ESG levels of our portfolio companies, but perhaps even raise those standards across our investment universe at an aggregate level.