Investment Governance Policy

Investment Governance Policy



During the past decade, global organizations, corporations, and civil society organizations have strengthened focus on measures to address and resolve social exclusion and environmental degradation, which significantly impact sustainable development, inclusive growth, and the collective well-being and prosperity of economies, societies, people and the planet. Institutional Investors play a key role in this regard. They have important investment management responsibilities to ensure delivery of sustainable long-term value to their investment owners and beneficiaries. These responsibilities include consideration of the risk profiles of Investee Companies.

Institutional Investors should ensure to invest in companies that integrate Environment, Social and Governance (ESG) factors in their business practices. Furthermore, in the event that an Investee Company fails to implement ESG principles, the Institutional Investor should engage with the Investee Company to improve the company’s ESG performance. Leading international organizations and countries have promulgated principles for investment governance. Adoption of investment governance practices by Institutional Investors will not only promote sustainable growth and development, but also secure the best returns to their Asset Owners and beneficiaries, and provide durable benefits for Institutional Investors in the long term.

The Securities and Exchange Commission (SEC) has joined this global trend by adopting the Investment Governance Code 2017 (I Code). The I Code contains investment governance principles and guidance reflecting current international standards and best practices for responsible and effective stewardship over investments by Institutional Investors. Implementation of the I Code by Institutional Investors will enhance confidence by domestic and global markets clients and trust that investment decisions and management are done in their best interest. Moreover, the I Code promotes and contributes to a good corporate governance ecosystem, stimulates responsible and sustainable practices by listed companies, and fosters growth and development of the Thai capital market and the wider economy.

This Policy is the primary reference document on matters relating to Investment Division of Principal Asset management Co., Ltd. and serves as a reference for staff in handling related tasks.

The principle of the Investment Governance Policy

Principle 1: Adopt a clear Investment Governance Policy

The company should adopt a clear and written Investment Governance Policy that created and strengthens an investment governance culture through all levels of the company, from the Board of Directors and its committees (including the Investment Committee), to management , and staff in relevant business units.
•    Be commensurate with the Institutional Investor’s business profile (including size and structure) and its role in the investment chain.
•    Require the Institutional Investor to perform its investment duties and stewardship responsibilities in the best interest of clients, by making sound investment decisions, and effectively monitoring the investments, business and ESG performance of Investee Companies.
Company will perform our duties in compliance with applicable laws, regulations, client agreements, in the best interest of our clients, and with the application of sound investment governance practices in relation to the following topics:
•    Inclusion of an Investee Company’s ESG performance in the Institutional Investor’s investment consideration.
•    Anti-corruption measures of both the Institutional Investor and Investee Companies with reference to legal and industry requirements.
•    Management and use of non-public information about or related to Investee Companies and their securities which may have a material effect on the price of an Investee Company’s securities.
•    Prevention of unfair securities trading practices in violation of applicable laws and regulations.
•    Prevention of money laundering and terrorist financing.

Principle 2: Properly Prevent and Manage Conflicts of Interest and Prioritise Advancing the Best Interest of Clients.

•    To ensure that investments are managed in the best interest of clients, that conflicts of interest are prevented, identified, minimized and properly managed, and that the interests of clients are prioritised over the interests of the Institutional Investor and its shareholders and business group companies.
•    To ensure that adequate measures to prevent, identify, minimize and manage conflicts of interest are in place, for an example

  • Written policies for the prevention, identification, minimization and management of conflicts of interests.
  • Procedures to sufficiently prevent, identify, minimize and manage conflicts of interest.
  • Staff communication and training to ensure understanding and effective application of conflict of interest procedures.
  • Compliance control and audit measures for the application of the conflict of interest policies and procedures.
  • An effective whistle-blowing policy.
  • Regular review of the appropriateness and effectiveness of conflict of interest measures.

Principle 3: Make Informed Investment Decisions and Engage in Active Ongoing Monitoring of Investee Companies.

•    To ensure the appropriate in place processes and procedures for active ongoing monitoring of the performance of Investee Companies to ensure that they become  promptly aware of factors relevant to the value of the Investee Companies
•    Actively monitor the performance of Investee Companies with the nature of their investments in order to become promptly aware of factors relevant to the value of the Investee companies and the investments. The example of the monitoring are as follow:

  • News and research analysis related to the Investee Companies and information disclosures by Investee Companies.
  • Effective engagement with the Board of Directors and the Executives of the Investee Companies.
  • Attending and exercising voting rights at the Investee Companies’ Annual General Meeting and Extraordinary General Meeting

Principle 4: Apply Enhanced Monitoring of and Engagement with the Investee Companies if Monitoring pursuant to Principle 3 is Considered Insufficient.

Early intervention by Institutional Investors should assist in preserving and restoring the value of investment in the relevant Investee Companies. Events that warrant enhanced monitoring by Institutional Investors include investment value concerns resulting from:

•    Corporate strategies, business performance, and risk management.
•    The Investee Company’s implementation of corporate governance principles.
•    The Investee Company’s approach to social responsibilities and environmental governance principles.
For the further action, company will consider the appropriate action according to the severity of each incident that might arise for an example
•    Formally notifying the Board of Directors of the Institutional Investors’ concerns.
•    Engaging with the Chairman of the Board of Directors or other (independent) directors.
•    Attend the Annual General Meeting or Extraordinary General Meeting and subsequently exercising such voting rights at the relevant meetings.

Principle 5: Have a Clear Policy on Exercising Voting Rights and Disclosure of Voting Results.

Company will carefully exercise their voting rights in each Investee Company. Voting decisions should be made after careful consideration of all relevant information according the Company Proxy Voting Policy.

Principle 6: Act Collectively with Other Investors and Stakeholders as Appropriate

Collaboration with other investors and stakeholders may be the most effective way to resolve concern about business or ESG performance identified by the Institutional Investors that have not been resolved through the Institutional Investor’s engagement with Investee Companies. Company will provide a reasonable coordination with other institutional investors.

Principle 7: Regularly Disclose the Investment Governance Policy and Compliance with the Policy

Company will regularly review and disclose the Investment Governance Policy in the company website and the annual financial statement of the company.