Metrica’s statement of its responsibilities under the Korea Stewardship Code

The Korea Stewardship Code (the “Code”) sets forth guidelines to which institutional investors in Korean-listed stocks should adhere in order to fulfil their fiduciary duties to their clients. The Code details seven principles which help investors discharge their steward responsibilities, thereby 1) enhancing the mid to long term corporate values for investee companies, 2) augmenting investment returns for their clients, and 3) supporting the overall development of the Korean economy and capital markets.

As a signatory to the Korea Stewardship Code, Metrica Partners Pte. Ltd. (“Metrica”) – a Singapore-based private investment management firm established in 2016 – accepts its stewardship responsibilities and seeks to deliver superior investment returns for its clients by enhancing the valuation of investee companies through continuous monitoring and constructive dialogue with management teams.

In accordance with the Code’s requirements, Metrica hereby sets forth the manner in which it aims to implement the seven principles defined by the Code:

Principle 1: Institutional investors, as a steward of assets entrusted by their clients, beneficiaries, etc., to take care of and manage, should formulate and publicly disclose a clear policy to faithfully implement their responsibilities.

Metrica supports the Korea Stewardship Code through in-depth analysis of investee companies, constructive engagement with management teams and thoughtful voting of proxies. Metrica’s comprehensive methodology allows it to properly assess the strategic, financial and corporate governance aspects of investee companies and ensure that management teams pursue strategies which deliver long-term sustainable growth and value creation for all shareholders and ultimately, Metrica’s clients.

Principle 2: Institutional investors should formulate and publicly disclose an effective and clear policy as to how to resolve actual or potential problems arising from conflicts of interest in the course of their stewardship activities.

Metrica recognises that conflicts of interest may occur when discharging its stewardship responsibilities. In that regard, it has adopted a Conflict of Interest Policy based on stringent standards of integrity and ethics. Metrica’s Conflict of Interest Policy is shared with all employees, and is subject to regular review, including by the firm’s Chief Compliance Officer and senior management. The policy covers the identification and resolution of potential (and actual) conflicts of interest.

Principle 3: Institutional investors should regularly monitor investee companies in order to enhance investee companies’ mid-to-long-term value and thereby protect and raise their investment value.

Regular monitoring of investee companies is one of Metrica’s key responsibilities to its clients. Metrica undertakes rigorous analysis of investee company financials, business model, and the wider competitive environment. This includes analysing published company reports and accounts, announcements, sell-side research reports, and other publicly disclosed information. Metrica also pays close attention to the integrity of the board and its relationship with minority shareholders. Metrica believes these initiatives helps it better engage with investee companies and drive medium-to-long-term value enhancement.

Principle 4: While institutional investors should aim to form a consensus with investee companies, where necessary, they should formulate internal guidelines on the timeline, procedures, and methods for stewardship activities.

Metrica strives to continuously collaborate with investee companies to ensure that boards and management teams are pursuing strategies and allocating capital in line with the interest of all shareholders and Metrica’s clients. When Metrica identifies concerns regarding certain strategies, capital allocation decisions or corporate governance practices, it will seek to actively address this with management teams and boards. Given the uniqueness of each company, every engagement will be tailored to the specific situation and centred around constructive dialogue, but with the ultimate goal of seeking the best outcome for Metrica’s clients. While Metrica’s opinions may occasionally differ from the boards and management teams of investee companies, it believes that such constructive dialogue should be pursued, as it can lead to value-enhancing outcomes that benefit all stakeholders and ultimately, Metrica’s clients.

Principle 5: Institutional investors should formulate and publicly disclose a voting policy that includes guidelines, procedures, and detailed standards for exercising votes in a faithful manner, and publicly disclose voting records and the reasons for each vote so as to allow the verification of the appropriateness of their voting activities.

Metrica aims to fulfil its responsibilities under the Code by adhering to its Proxy Voting Policy. At every voting opportunity, Metrica considers all prevailing circumstances of the investee company and votes according to its policy. Metrica’s Proxy Voting Policy is clear and transparent and guides its decision-making process. Metrica aims to vote in the best interests of its clients, applying prevailing best practices, codes and standards of corporate governance. While Metrica gives due consideration to an investee company’s management recommendations, it will support them only if they align with the best interests of the company’s shareholders and, ultimately, its clients.

While Metrica’s Proxy Voting Policy is not publicly available, it is available to Metrica’s clients upon request. Metrica also discloses its voting activity to the extent required by any applicable regulatory authority, and will provide clients with periodic updates on its voting activities if required to do so by the relevant client agreement, or upon client request. Metrica adopts this approach as it believes the potential risk of such disclosure could, in certain circumstances, outweigh the potential benefits to clients, particularly given the importance of maintaining confidentiality in its investment strategies. When disclosing voting activity, Metrica may do so either in aggregate or by individual agenda items, with or without explanations for its votes.

Metrica’s Proxy Voting Policy is subject to regular management review by the firm’s Chief Compliance Officer, and senior management.

Principle 6: Institutional investors should regularly report their voting and stewardship activities to their clients or beneficiaries.

Beyond disclosing its stewardship responsibilities on its website, Metrica periodically publishes reports, letters, and presentations on its stewardship activities with investee companies at its discretion.

Additionally, as stated in Principle 5 above, Metrica provides its clients with periodic updates on its voting activities if required to do so by the relevant client agreement, or upon client request. Metrica adopts this approach as it believes the potential risk of such disclosure could, in certain circumstances, outweigh the potential benefits to clients, particularly given the importance of maintaining confidentiality in its investment strategies.

Principle 7: Institutional investors should have the capabilities and expertise required to implement stewardship responsibilities in an active and effective manner.

Metrica strives to enhance the corporate value of its investee companies by developing in-depth knowledge and constructive relationships with them. In return, Metrica expects its investee companies to uphold the highest standards of excellence.

Metrica executes this process through its investment team, and relies on certain external resources to deepen its knowledge of corporate governance standards, business strategies and capital allocation. The Chief Investment Officer, traders and analysts have in-depth and extensive experience investing in Korea (in the case of the Chief Investment Officer, over 20 years’ experience). All members are heavily involved in the investment process and abide by the principles of the Code.

Name and contact of person in charge of compliance with Metrica’s Korea Stewardship Code obligations:

David Mulvenna

Chief Operating Officer

https://metricapartners.com/contact-us/

Metrica Partners Pte. Ltd. is regulated by the Monetary Authority of Singapore and holds a Capital Markets Service License for Fund Management.