The Code in summary
CRISA originally consisted of four principles.
While the original four remain, a fifth principle addressing conflict of
interest was added as a result of feedback by stakeholders on the draft Code.
Principle 1 – An institutional investor should incorporate
sustainability considerations, including ESG, into its investment analysis and
investment activities as part of the delivery of superior risk-adjusted returns
to the ultimate beneficiaries.
The Code requires institutional
investors to develop policies on how they incorporate sustainability
considerations, including ESG, into investment analysis and activities.
Institutional investors should ensure that this policy is implemented and
establish processes to monitor compliance with the policy.
Principle 2 – An institutional investor should demonstrate its acceptance
of ownership responsibilities in its investment arrangements and investment
The second principle requires institutional investors to demonstrate a
responsible approach to shareholding by, among others, implementing a policy
detailing mechanisms of intervention and engagement with companies when
concerns have been identified, as well as the means of escalation if concerns
raised cannot be resolved. The Code requires such a policy to also detail the
approach to voting at shareholder meetings, including the criteria to be used
in reaching voting decisions and public disclosure of full voting records.
Controls should also be introduced by the institutional investor to
prevent insider trading as defined by the Security Services Act.
Principle 3 – Where appropriate, institutional investors should consider
a collaborative approach to promote acceptance and implementation of the
principles of CRISA and other codes and standards applicable to institutional
Institutional investors are encouraged to work with other shareholders,
service providers, regulators, investee companies and ultimate beneficiaries to
promote CRISA and sound governance.
Principle 4 – An institutional investor should recognise the
circumstances and relationships that hold a potential for conflicts of interest
and should pro-actively manage these when they occur.
investors are encouraged develop a policy on prevention and management of
conflicts of interests and establish processes to monitor compliance with this
Principle 5 – Institutional investors should be transparent about the
content of their policies, how the policies are implemented and how CRISA is
applied to enable stakeholders to make informed assessments.
The Code requires
institutional investors to fully and publicly disclose to stakeholders at least
once a year to what extent the Code has been applied.
If an institutional investor has not fully applied one of the Principles
of the Code, the reasons should be disclosed. Disclosure as well as policies
should be made public.
Institutional investor and their service providers should also, before
agreeing to a proxy or other instruction to keep voting records confidential,
carefully consider the reasons put forward to justify confidentiality.