Recommendations
Explanation The level of GP (investor) consents that are deemed appropriate are usually agreed to during the negotiation of the investment Agreement. Typically, an investment will be structured so that certain proposed actions of the portfolio company will require shareholder consents, including GP on behalf of the fund. These shareholder
Recommendations
Explanation GP may be in a position to exert significant influence over the development, implementation and monitoring of ESG strategies, policies and practices at portfolio companies. The GP should ideally be able, through the information produced and provided by the portfolio company, to identify, monitor and support the mitigation of
Recommendations
Explanation The position of a board member is a responsible and trusted position and no one should be forced to accept the position. Some individuals may be unwilling to accept the position because of the potential liabilities associated with the position of a director. Depending on the jurisdiction, directors may
Recommendations
Explanation Someone with a good track record as a director may find themselves invited to serve on multiple boards. This may result in the person having limited time to fully perform their duties. Recommendation A director should accept only as many directorships as he or she can reasonably be expected
Recommendations
Explanation Boards function as decision-making and review forums involving people with differing skills and approaches. Diversity of skills and styles leads to better balanced and informed decision-making. Recommendation In reviewing board composition, the board should be aware of the benefit of diversity in its selection as well as any applicable
Recommendations
Explanation A portfolio company's strategy consists of a number of core components that are the responsibility of the board. First and foremost is the development of long-term value creation through current and future revenue streams. The most important value corresponds to existance of such terms as effective and
Recommendations
Explanation One of the most important areas of due diligence that a GP should conduct before investing is the corporate governance at the potential portfolio company. The corporate governance systems, processes and controls employed by the company's senior management team provide insight into the effective management of the
Corporate Services
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Corporate Services
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Explanation A key element of a portfolio company’s business strategy execution is the identification and assessment of risk and opportunity, including decisions on what levels of risk are acceptable, what risks are associated with each opportunity, how such risks can be mitigated and controlled and how to manage the
Recommendations
Explanation There are a number of think tanks and organisations that offer best practice guidelines for director and corporate governance. The minimum and maximum size of the board is usually set out in the Investment Agreement and reflects the specific situation of the company, the governance objectives of the owners
Recommendations
Explanation Generally, factors affecting a portfolio company's workforce, customers, suppliers and communities should be evaluated at the board level. Social factors may include stakeholder dialogue and human rights issues, such as compliance with core labour standards in areas such as health and safety, child labour, illegal or forced
Recommendations
Explanation In general, GPs should support a prudent and sustainable approach to environmental risks and opportunities that may affect their portfolio companies. Such risks could relate to a range of factors including resource use/consumption, water scarcity, waste production and disposal; emissions in air, land and water; energy use, carbon
Recommendations
Explanation In most jurisdictions, there are legal obligations regarding the information that must be provided to stakeholders of portfolio companies. However, it is common practice for funds investing in portfolio companies to request more frequent and detailed information than is required by law. In particular, GP may require more frequent
Recommendations
Explanation In certain circumstances, LP co-investors of the fund or other third parties with whom GP is in some way connected may wish to invest directly in a company in which GP proposes to invest on behalf of the fund. If a co-investment is more successful than the fund as
Recommendations
Explanation At the time of investment by a fund, the investment decision is typically made in support of a specific strategy, business plan and management team. Often, during the negotiation process leading up to the investment by the fund, GP has had significant input into determining the target company'