SBI Investment Co., Ltd. (the “Company”) implements its Stewardship Code as set out below, in accordance with the Korea Stewardship Code, “Principles on the Stewardship Responsibilities of Institutional Investors,” issued by the Stewardship Code Council of the Korea Corporate Governance Service.
Effective Date · November 1, 2021
Principle 1
As a fiduciary managing and operating the assets of others, such as clients and beneficiaries, an institutional investor should formulate and publicly disclose a clear policy to faithfully fulfill its stewardship responsibilities.
To faithfully fulfill the responsibilities entrusted to it by its limited partners, the Company exercises the duty of care of a prudent manager and carries out its fiduciary responsibilities in accordance with applicable laws, its Articles of Incorporation and fund agreements.
The Company treats the interests of all limited partners equally and does not favor or discriminate against any particular limited partner without reasonable grounds in the formation, operation and liquidation of the venture investment funds and private equity funds (the “Funds”) that it manages.
To fulfill its fiduciary responsibilities, the Company diligently performs its duties by preventing and addressing conflicts of interest, enhancing value through communication with and management of investee companies, exercising voting rights appropriately in accordance with established procedures and reporting thereon, and strengthening the capabilities and expertise of its people.
Principle 2
An institutional investor should formulate and publicly disclose an effective and clear policy on how to resolve actual or potential conflicts of interest arising in the course of fulfilling its stewardship responsibilities.
The Company has established and complies with its Conflict of Interest Prevention Regulations in order to resolve conflicts of interest that may arise in the course of fulfilling its fiduciary responsibilities.
In accordance with its duty of care as a prudent manager, the Company places the interests of its limited partners ahead of those of the Company and its officers and employees. Accordingly, officers and employees are required to periodically submit a pledge to avoid conflicts of interest and not to use information obtained in the course of their duties for personal purposes.
Where the Company faces, or is likely to face, a conflict of interest between the Company and its limited partners, among limited partners, or among Funds, it thoroughly reviews the associated risks and notifies the limited partners, and takes preventive measures to ensure that the protection of limited partners is not compromised.
Principle 3
An institutional investor should regularly monitor investee companies in order to enhance their medium- to long-term value and thereby preserve and increase the value of its investment assets.
After investing, the Company seeks to enhance the value of investee companies and prevent management risks through active engagement, including continuous consultation with investee companies and expressing its views as a shareholder, and works to build relationships of trust between the management of investee companies and its fund managers.
The Company continuously monitors investee companies and has established a reporting framework covering regular audits and due diligence, reports on the use of funds, and quarterly, semi-annual and annual financial reports. This information is systematically managed through the Company’s Enterprise Resource Planning (“ERP”) system.
The Company regularly discusses key issues with the management of investee companies and, where necessary, appoints its fund managers to the boards of investee companies to participate in major decision-making.
The Company formulates diverse value-enhancement strategies tailored to the characteristics of each investee company, such as strengthening management and key personnel, improving operational efficiency, divesting non-core assets and restructuring finances, and proposes appropriate measures.
Principle 4
While seeking to build consensus with investee companies, an institutional investor should, where necessary, establish internal guidelines on the timing, procedures and methods of activities undertaken to fulfill its stewardship responsibilities.
From the investment review stage, the Company strives to build trust and consensus through engagement with the management and key personnel of investee companies, and after investment it continues to communicate with management on major business matters, pursuing the growth of investee companies together.
In addition, when reviewing an investment, the Company verifies in advance the integrity and transparency of the investee company by examining its financial and other conditions and conducting reference checks on its major shareholders and management. It also prevents risks through collaboration between the responsible investment manager and the legal department when executing contracts and other agreements.
The Company continuously monitors the status of investee companies and strives to ensure that its views are appropriately reflected in their management. Where necessary, it fulfills its fiduciary responsibilities by actively exercising its shareholder rights under the Korean Commercial Act, including the right to submit shareholder proposals and the right to request an extraordinary general meeting of shareholders, and by participating in the board of directors.
In the course of its active shareholder engagement, the Company complies with all laws and regulations prohibiting the use of material non-public information and does not profit from the inside information of investee companies.
Principle 5
An institutional investor should formulate and publicly disclose a voting policy that includes guidelines, procedures and detailed criteria for the faithful exercise of voting rights, and should disclose the details of its voting together with the reasons therefor so that the appropriateness of its voting can be assessed.
As a basic principle, the Company exercises its voting rights at the general meetings of shareholders and board meetings of investee companies in a manner that prioritizes the interests of the Funds and their limited partners, and determines how to vote on each matter by assessing the interests involved and the necessity on a case-by-case basis.
The Company’s votes in investee companies are proposed by the responsible investment manager and, following internal consultation, decided upon approval by the Company’s internal voting authorities. Voting records are retained and managed in the ERP system and subsequently reported to limited partners and other relevant parties in accordance with established procedures.
Principle 6
An institutional investor should regularly report to its clients and beneficiaries on its voting and stewardship activities.
The Company records its fiduciary activities, including the exercise of voting rights and major matters concerning the Funds and investee companies, retains such records for a prescribed period, and reports them to its limited partners on a regular basis.
The Company holds a quarterly reporting meeting to brief its limited partners on the status of the Funds and investee companies and on post-investment management activities.
Principle 7
An institutional investor should have the capabilities and expertise necessary to fulfill its stewardship responsibilities actively and effectively.
The Company’s investment divisions are staffed with investment managers who have expertise in their industries and in investing, and on this basis strive to deliver returns to limited partners through the growth and value enhancement of investee companies.
The Company operates a compliance department and a management division that are independent of its investment divisions. Through dedicated personnel, it manages risks that may arise in fund management, investment and post-investment management, and strives to comply with all applicable laws and regulations and the duty of care of a prudent manager.
To faithfully fulfill its fiduciary responsibilities, the Company encourages its officers and employees to participate in job-related training programs and seminars to enhance their capabilities and expertise.
Officer in Charge and Contact Person
Officer in Charge JaeGun Kim, Managing Director · +82-2-2139-9280 · jgkim@sbigroup.co.kr
Contact Person MinJee Kim, Deputy General Manager · +82-2-2139-9286 · mjkim@sbigroup.co.kr