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Prosperity Capital Management

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]

Shareholder value is often created in companies that are in the midst of a transformation – be it a merger, corporate restructuring, change of control or management or an on-going sector consolidation. During such periods, it is important to safeguard good corporate governance standards and an active approach can be a major contributor to enhanced shareholder value.

Whilst Russia is often associated with economic and political risks, one of the most serious risks of investing in Russia relates to corporate governance and is often not given sufficient weight. If you sit close to the companies in which you are invested, know them well and have tools to deal with these risks, they can at least be mitigated. Triggering, or at least spotting, big improvements in corporate governance can also be a major source of value generation for investors in Prosperity funds. Investors in Russia and the FSU cannot avoid corporate governance risks entirely, as these economies are changing rapidly, and sometimes things happen that investors do not want to happen. But Prosperity’s track record shows that our investment approach has allowed us, with stamina and a "hands-on" approach, to generate value in this market by utilising our active and pro-active investment approach.

Prosperity's active engagement can either take place in isolation or as part of a collective group of investors and with the support of various corporate governance institutions, not least the Investor Protection Association. Where action is collective, it is not unusual for Prosperity to be a leader of discussions and negotiations.


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]

PCM is a member of Investor Protection Association (Russia) since 1999 and are active in its collaborative engagements regarding independent directors’ nomination, minority shareholders’ rights’ defence and ESG issues, corporate and ESG legislation’s enhancement and improvement of the efficiency of corporate governance at state-owned companies. 


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]


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]


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]


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

07.1. Indicate whether insights gained from your organisation`s engagements are shared with investment decision-makers.

Type of engagement

Insights shared

Individual / Internal staff engagements

Collaborative engagements

07.2. Indicate the practices used to ensure that information and insights gained through engagements are shared with investment decision-makers.

07.3. Indicate whether insights gained from your organisation’s engagements are shared with your clients/beneficiaries.

Type of engagement

Insights shared

Individual/Internal staff engagements

Collaborative engagements

07.4. Additional information. [Optional]

Prosperity's investment advisory team seeks to use all sources of information and data available to them. Status and result of engagement activity are shared within the advisory team and the most important cases are shared with clients through PCM presentations, newsletters and on annual conferences. 


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 engagements are managed and/or monitored by the governance team within the investment team.

We have a list of ESG criteria that we monitor and engage with companies in case of lack of disclosure, negative developments or absence of progress. Investment team members report to the group on the daily investment conference call, following up on any collaboratively agreed steps and updating on developments. The Corporate Governance Director maintains a list of all engagements and monitors the progress.


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