Subhead Fund GovernanceText Document and Information Request List for Funds © 2019 International Finance Corporation. All rights reserved. 2121 Pennsylvania Avenue, NW Washington, DC 20433 USA Internet: www.ifc.org

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International Finance Corporation is an international organization established by Articles of Agreement among its member countries, and a member of the World Bank Group. All names, logos, and trademarks are the property of IFC, and you may not use any of such materials for any purpose without the express written consent of IFC. Additionally, International Finance Corporation” and “IFC” are registered trademarks of IFC and are protected under international law. Please provide documents noted below, as applicable law and regulation) and certificate erence of the Advisory Committee, Investment applicable, in English. In the case of a new or of good standing. Committee and other key governing bodies. existing fund for which documents are in develop- 6. Fund’s most recent regulatory body registration 20. Compliance Manual. ment, please include these documents in draft or disclosure forms (if required to be registered). form to be finalized in due course.1 21. Code of Ethics and / or Code of Professional 7. Limited Partnership Agreement (current and Conduct. 1. Provide a chart outlining ownership and black-lined version from previous funds.) management structure of the fund including: 22. Conflict of Interest Policy. Private Placement Memorandum (PPM), if General Partner (GP), Manager, Limited Part- 8. 23. Environment, Social and Governance policy ner (LP), investors, shareholders and affiliated applicable. of the fund and applicable disclosure require- entities, including Holding Companies (Hold- 9. Investment Advisory Agreement between the ments. Cos), and Limited Liability Companies (LLCs), fund and GP. 24. Stakeholder Engagement Policy: Policy, strat- as applicable., Please also clarify the ultimate 10. Partnership Agreement with the GP. egy, and procedures, describing stakeholder beneficial ownership of each entity. 11. Copies of all side agreements or rights (side engagement; persons and operational team(s) 2. Provide a list of the fund’s management team letters) or other major agreements to which the accountable for stakeholder relationship, and and members of committees (Advisory, Invest- fund is a party. their reporting line to Fund Manager and fund ment, Conflict of Interest, Compliance, other) committees; and standards adhered to for and provide, at a minimum:(a) CVs indicating 12. Copy of the External Auditor’s engagement stakeholder engagement and reporting (such their affiliations with the fund, GP or LP (b) letter. as AA 1000, ISO 26000, etc.). controlling shareholder / investor and relevant 13. Internal Audit Charter/by-laws. 25. Risk Management policy. government or political entity affiliation if any 14. All audited annual and unaudited periodic (c) names of other entities in which fund team 26. Terms of Reference for Chief Executive Officer reporting packages sent to LPs for each active members are involved as staff, advisors, board (CEO), Chief Financial Officer (CFO), Chief prior fund. members, advisory or investment committee Risk Officer (CRO), Chief Compliance Officer members. 15. Audited financial statements and external audi- (CCO), Corporate Secretary (CS) and Chief tor Management Letters for the last 3 years. Internal Auditor (CIA), if applicable. 3. Provide a list of all shareholder representation forums in which shareholders / investors may 16. Sample capital call and distribution notices. 27. Related Party Transaction Policy/by-law, including shareholder disclosure, approval and appoint representatives. 17. Annual Investor Meeting materials from the voting processes. 4. Describe the fund’s legal and tax structure. two previous years. 28. Completed due diligence report / investment In the case of an existing fund: (a) identify all 18. Timetable of meetings between Manager, GPs, recommendation for two recent investments. fund entities; (b) state of domicile or incorpo- LPs and Committees of the fund. Also provide ration; and (c) names of investors, shareholders summary of attendance and results of all meet- 29. List of LPs from the most recent fund and any and affiliated entities, as applicable. ings held in the last three years. investors that are not re-upping. 5. Incorporation certificates of fund entities, 19. Fund Governance Code, including description 30. Working example of the most recent fund including LLCs, HoldCos, other related of all governance bodies and their respective distribution waterfall, noting any variations entities (if required to be incorporated under roles, including any charters or Terms of Ref- from the expected calculations.

1 Note that this Document Request List does not contain a section on the structure and functioning of the board of directors as in other IFC CG paradigms because the primary model contemplated here is a limited partnership and the relationships between the limited partners and the general partner or fund manager. If the fund under considerations happens to be an LLC or other corporate structure, use the board section of another relevant paradigm to evaluate a board accordingly.

Fund Governance Document and Information Request List for Funds 3 31. External Communication Mechanism (ECM): fund operations and deal sourcing, screening, B. Structure and Functioning of the Policy, strategy, and procedures, describing due diligence processes and portfolio monitor- Fund Governing Bodies, Fund Manager / external communication mechanism enabling ing (i.e. law firms, custodians, fund adminis- General Partner, Advisory Committee, external stakeholders to liaise with the Institu- trators, IT services providers, brokers, consul- and Investment Committee tion; persons and operational team(s) account- tants, banks, auditors, etc.). able for stakeholder interaction, and their 1. Fund Decision-Making Processes: Provide 3. Governance Policies: Describe the fund’s reporting line to management and board; and details on the fund’s internal decision-making governance systems and policies (e.g., Com- the relevant standards followed.2 and approval processes, including details on pliance Code, Code of Ethics and Professional the role, composition and function of gov- Conduct, and Conflict of Interest policy). How erning and advisory bodies that impact the Information Request List – Funds are these policies supervised, monitored and management or investment activity of the fund enforced? Does the fund have dedicated risk (e.g. investment, advisory, audit, remuneration, Please provide detailed responses to the additional management professionals? What types of risks tax, compliance, etc.) and their respective deci- information requested below, as applicable, in En- are monitored and how are they measured? sion-making authorities. glish. For new funds where management and gover- Does the fund have a corporate governance nance arrangements are currently being developed, methodology and review framework appli- 2. ESG Oversight: Has a dedicated ESG com- please provide information on the fund’s expected cable to its target and portfolio investments? mittee been established and if so, what is the plans and timeline for implementation.3 Describe the process of nominating directors role and composition of the committee? Does to boards and sharing of information with the investment committee formally approve E&S strategy and E&S policies adopted by A. Commitment to Fund Governance portfolio companies. Has a written policy been shared with investors and LPs? How often are the fund? Does the investment committee 1. Fund Strategy: Describe the fund’s investment the fund governance processes reviewed for ensure that management systems are in place strategy and types of transactions it will pur- effectiveness and adequacy? to identify and manage E&S risks and impacts, sue. Please include details on anticipated trans- and if so, how is this done? Does the invest- 4. ESG: Does the fund have an Environmental, action sizes (including minimum/maximum), ment committee conduct independent audits Social and Corporate Governance (ESG) policy investment pace, holding periods, geographic of the effectiveness of the ESMS adopted by or framework applicable to its investments focus, industry and sector focus, investment the fund? Describe the extent and frequency of and portfolio? Does the fund incorporate an stage and other relevant characteristics that training offered to the investment committee ESG analysis and disclosure frameworks in its will guide its deal sourcing, processing and on ESG risk issues (both for industry-specific communication practices with LPs? Has the portfolio management. Discuss the risk factors and general risks). Do individual investment fund adopted a Corporate Social Responsibil- of the fund’s investment strategy (e.g. political, committee members have sufficient experience ity (CSR) or Socially Responsible Investment economic, financial, technological, business cy- in evaluating E&S issues? What is the frequen- (SRI) policy? Is the fund a signatory to the cle, legal and governance risks) and steps taken cy of inclusion of ESG issues on the investment United Nations Principles of Responsible In- to integrate management of such risks into the committee meeting agenda (over the past three vesting (UNPRI)? Does the fund have policies fund’s investment strategy. years)? that encourage portfolio companies to adopt 2. Third Party Services: Describe how the fund external standards and codes on ESG (such as 3. Fiduciary Duties: Does the General Partner supervises third parties providing services for the United Nations Global Compact)? or Fund Manager explicitly acknowledge its

2 Consult with assigned E&S specialist, who may have requested/obtained these documents. 3 Note that this Information Request List does not contain a request for information related to a board of directors as in other IFC CG paradigms because the primary model contemplated here is a Limited Partnership and the relationships between the Limited Partners and the General Partner or Fund Manager. If the Fund under considerations happens to be an LLC or other corporate structure, use the information request list from the board section of another relevant paradigm to evaluate a board accordingly.

4 Fund Governance Document and Information Request List for Funds fiduciary duties and duty of care and loyalty 7. Conflicts of Interest: How are conflicts of 10. Portfolio Company Board Representation: to investors? Do fund documents confirm that interest (actual, potential, and perceived) Describe the approach to board representa- investors and Limited Partners have limited identified, evaluated, managed, disclosed and tion on portfolio companies and provide the liability and tax pass-through treatment? resolved? Identify any committees or processes fund’s policy in this regard, if it exists. What in place to help with the resolution of conflicts is the objective of the Fund in nominating 4. Limited Partners’ Advisory Committees: Discuss the anticipated composition of the (Conflict of Interest Committee, etc.). How directors to portfolio company boards, if fund’s Limited Partner Advisory Committee are conflicts of interests handled? Specifically, applicable? How is the effectiveness and (LPAC) formed by the Fund Manager. Is the are conflicts presented by the Fund Manager value addition of directorship representation LPAC comprised of representatives of LPs and at the LPAC? Are LPs and Investors required evaluated? investors only? Identify LPs that have already to provide approval and consent if a conflict is presented, or are LPs and Investors allowed to agreed to participate on the LPAC, and the ex- C. Control Environment: Internal recuse themselves from voting on investment pected timing and format of LPAC and AGM Control Systems, Internal Audit decisions if a conflict exists? Describe in detail meetings during the fund’s term. Do all LPAC Function (IA), External Audit, Risk any review or assessment of conflicts of interest members have sufficient time and capacity to Governance and Compliance serve on the LPAC? Describe the major respon- performed in the last year. What are the rele- sibilities of the LPAC. Does the fund require vant policies concerning personal investments 1. Fund Investment Approach: Describe the LPAC approval by majority vote to: (a) waive by employees or affiliates in deals reviewed by fund’s diversification strategy in terms all potential or actual conflicts of interest the GP? of number of investments, geographical concentration and sector allocation. What between GP/Manager and investors or fund; 8. Indemnification of LPAC & IC Members: (b) approve valuations of securities (c) deviate Describe the standards of indemnification that are the typical equity structures to be used; from investment policies or other contractual apply to the GP and related parties, specifically the fund’s preference for being a control, arrangements? the LPAC and IC members. Do the Fund’s minority, joint or sole investor; the expect- ed holding period; expected limitations on 5. Investment Committees: Discuss the anticipat- constitutive documents (or side letters or borrowing and guarantees by the fund; the ed composition of the Investment Committee amendments) assert limited liability of inves- policy in relation to temporary investments; formed by the Fund Manager. Are GP / Man- tors and indemnify LPAC or IC members for the policy in relation to bridge investments? ager Staff members only allowed to be on the liability and have customary exculpatory claus- How are investment opportunities allocated Investment Committee? Do all investors have es? Does the Fund Manager obtain liability between different active investment funds the right to designate the composition of the insurance to support indemnification commit- (or future funds) managed by the same IC? Have provisions been made to designate at ments? If so what are the terms and scope of entity? least one independent member? Describe the the insurance, and have any claims been made major responsibilities of the IC. against any of these policies within the last five 2. Exit Strategy: Discuss the fund’s approach to years? exiting investments and approach on the use 6. Key Person Terms: Describe in detail the fund’s of public markets. Discuss policy on IPOs or ‘Key Person’ provisions. Do the Key Person 9. Litigation Record: Have any staff of the fund, approach to monitoring public markets in an- provisions allow investors to suspend the its affiliated entities, or current or former ticipation of an IPO of a portfolio company. investment period upon cause? Please con- employees been involved in civil, criminal, firm that the Key Person provisions state that administrative or regulatory investigations or 3. Compliance Policies: Describe the fund’s changes are valid only upon approval of the proceedings related to the fund in the past, and compliance policies. Please include informa- LPAC or majority of LPs, and that each LP if so what was the outcome of the proceedings? tion on the procedures and internal controls has veto rights to a change in key person Provide a list of any prior or pending litigation in place to prevent the fund from being used provisions. involving the Fund and related entities. for corruption, such as personal gain, money

Fund Governance Document and Information Request List for Funds 5 laundering, or the financing of terrorist activ- disclosing material ESG-related incidents at the GP, investment committee and management ities. Does the fund have a dedicated compli- GP and portfolio company levels? appropriately consider control issues when ance officer and annual compliance program? planning new investments? Have there been 7. Integrity Due Diligence (IDD) & Anti Money To whom does the CCO/function report to? any major control weaknesses identified in the Laundering & Combating of Financing of How is the compliance policy communicated external auditor’s Management Letters and if Terrorism (AML, CFT) Procedures: Describe to investors and LPs and approved by the Ad- so, what remedial actions have been identified any processes for protecting against fraud and visory Committee? Does the fund use an annu- and taken? Provide the last three audit reports corruption in the fund’s operations and in the al compliance scorecard? How are compliance for the Fund, if available. Are the controls due diligence, screening and post-processing requirements communicated to current and risk-based? Does the fund or its GP undertake of investments. If applicable, discuss any issues prospective employees? What best practices or self-assessments of its internal control systems? detected in prior investments and their resolu- framework is the compliance program based tion. How does the fund ensure such policies on? Does the compliance function maintain a 10. External Auditors: Describe the fund’s external remain robust and responsive to evolving compliance register? What type of compliance auditor arrangements and how the external risks? training does the compliance program deliver audit firm is selected. Does the fund’s auditor to fund employees? 8. Internal Audit Function: Has an internal audit use U.S. Generally Accepted Audit Standards function been established, and if so, who does (GAAS) or International Standards on Audit- 4. Regulatory Oversight: What regulatory bodies it report to? How often does the IA chief meet ing (ISA) or another internationally accepted have oversight of the fund? Identify internal with supervisors? How often are internal au- accounting standard to audit the annual policies for evaluating regulatory requirements dits performed? Are internal audits risk-based? financial statements? What has been the Audit and compliance in applicable jurisdictions. Is there an annual internal audit work plan? Opinion for the last three reporting periods? Does the fund comply with all disclosure Are IA work plans and audits conducted in ac- Has there ever been a Qualified, Disclaimer requirements under applicable laws, regula- cordance with local or international standards? of or an Adverse Opinion rendered by the tions and listing rules, such as fair disclosure Who develops and approves this plan? Does auditors? How does the Fund Manager or any requirements? Is the Fund Manager required to IA conduct IT audits? Who monitors manage- of the fund committees ensure that manage- register with the U.S. Securities and Exchange ment’s response to deficiencies and weaknesses ment takes appropriate measures to address Commission or other entity, and can it confirm identified by IA? Does IA have any operational deficiencies identified in Management Letters? this is the case? activities in addition to its audit role? Have What other services does the external auditor 5. Valuation Policies: Describe the fund’s valua- IA staff reported any conflicts of interests, and perform for the fund? tion policies and whether the fund’s LPAC has if yes, how have these been handled? Is IA or 11. Risk Governance: Has a risk management a role in approving and reviewing valuations. any of its work outsourced or performed by system been established, and if so, who is the Fund Manager? What is the policy regard- 6. ESG Management & Disclosure: What are the responsible for its periodic review, develop- ing the selection of IA providers? Does the applicable ESG management and disclosure ment and implementation? Does the fund have provider have any association with the external policies for the fund and how do ESG factors a dedicated Chief Risk Officer (CRO)? To auditor and/or are there any other services influence investment decisions? How are ESG whom does the CRO report to? How are the provided to the fund? risks evaluated, and what is the fund’s contri- risks identified and the risk appetite set? Does bution to the portfolio company’s management 9. Internal Control Systems: Describe how the the Fund Manager or any of the fund commit- of ESG risk? Describe how ESG factors are internal control systems of either the fund or tees periodically review the risk management presented to LPs as well as how assurances are its GP (operational, financial and automated systems? What is the role of the internal audit given to LPs that the fund is operating consis- systems) are developed and implemented. Are function in relation to risk management? Do tently with ESG-related policies and practices. the existing controls documented and is the strategy and risk management include or fully What is the fund’s approach to managing and documentation reviewed periodically? Do the integrate E&S issues and risks?

6 Fund Governance Document and Information Request List for Funds 12. Compliance Program: Does the fund have a including details about contact events (weekly, E. Treatment of Limited Partners, Asset dedicated Chief Compliance Officer (CCO), quarterly, board meetings, etc.). What informa- Owners & Investors: and who does the CCO/function report to? tion is required to be reported by the portfolio What information does the fund, or its Fund companies, what is the frequency of disclosure, 1. Investor Meetings: Describe the frequency with Manager provide to investors regarding its and how does the fund address inadequate which investor meetings are held by the fund. compliance program and its results? How is reporting by companies? Does the fund hold an Annual Investor Meet- the quality of, and compliance with the code ing? Are all investors provided with adequate 5. Investment Portfolio Disclosure Policies: Does of ethics considered within the scope of the en- notice and agenda and permitted to participate, the Fund Manager provide periodic disclosure terprise risk management system of the fund? vote, review accounts, executive compensation, reports on all fees (e.g. transaction, financing, What best practices/framework is the compli- third party contract arrangements (e.g. external monitoring, management, redemption, etc.) ance program based on? Does the compliance auditor appointments) and approve any chang- charged to the fund and estimates of capital function maintain a compliance register? What es to such arrangements, or to constitutional calls and distributions and if yes, what is the type of compliance training does the compli- documents such as Limited Partnership Agree- frequency of such reports? Is immediate notice ance program deliver to employees? ments with a supermajority voting requirement provided of any contingent liability created, for LPA changes or changes to Key Person breach of legal documentation, formation provisions? D. Transparency and Disclosure of listed entities, sale of ownership in the management company, formation of invest- 2. Procedures of Meetings: Are LPAC, IC, investor 1. Internal Accounting: Describe the fund’s ment vehicles, or any inquiries from regulatory meetings, and formal discussions involving the internal accounting function. What standards agencies? GP, LP, investors and other parties organized, of accounting does the fund use to prepare its conducted and recorded according to best fund financial statements, International Financial 6. Regulatory and Self-Regulatory Review: What governance practices? Reporting Standards (IFRS) or U.S. Generally has been the fund’s experience with review of Accepted Accounting Principles (GAAP)? its periodic disclosure by the securities regu- 3. Manager Compensation Structure: Describe lator and the exchange (if applicable)? Have the compensation structure (salary, bonus, 2. Disclosure Practices: What are the fund’s there been any regulatory actions imposed by group or individual performance incentives, disclosure practices? Do disclosure standards the exchange or securities regulator (if yes, profit sharing, equity ownership, carried adhere to the CFA Institute’s Asset Manager describe)? interest, etc.) for all fund management team Code of Professional Conduct, ILPA Principles members. Describe the allocation of fees (e.g. of Standardized Reporting, or other recognized 7. Nonfinancial Reporting: Does the fund make transaction, investment banking, monitoring, best practices? Are financial analysts and in- meaningful periodic reports on its ESG data director’s fees, etc.) between the GP and the vestors treated equally concerning information and performance, in line with minimum fund. What are the fund’s policies on placement disclosure? national reporting requirements (if any)? What agent and finder’s fees? Include detail on allo- ESG/sustainability reporting standards does 3. Confidential or Material Non-Public cation of carried interest among Principals and the fund adhere to in addition to national Information: Describe policies on the handling others. How is carried interest vested for those requirements (for example, those set by GRI, and safeguarding of material or non-public parties that participate? Describe how the GP’s IIRC, SASB, or other organizations)? Is ESG information. How are these policies communi- contribution for investments is financed and information included in the fund’s reports to cated to fund employees, portfolio companies allocated across the teams. investors? Are ESG data subject to an annual and fund’s nominee directors on portfolio com- audit/evaluation by an independent provided? 4. Carried Interest Provisions: Describe the fund’s pany boards? Are ESG data subject to investment or advisory carried interest charges by the GP and its basis 4. Portfolio Monitoring Policies: Describe the committee-level review (if yes, how, and by (e.g. whole fund or deal by deal). Describe the fund’s portfolio investment monitoring policy, what committee)? specific milestones that need to be met before

Fund Governance Document and Information Request List for Funds 7 the GP can start taking or take additional and relevant voting process for authorizing unit is accountable for ECM, and what is their carry. How is carried interest calculated? State changes to partnership interest? reporting line to management and the LPAC? Is the fund’s claw-back provisions and whether it there a senior position responsible (if so, who)? 7. Opt-Out Provisions for LPs: Are all LP’s is guaranteed by the GP. State the fund’s policy required to invest on the same terms? Describe 2. Does the fund or its Manager: (a) receive on holding a portion of carried interest in the fund’s approach to allowing LPs to opt out and register external communications from escrow. of an investment. What are the circumstances the public; (b) screen and assess the issues 5. Differential Compensation Options: Describe and procedures for allowing an opt-out? raised and determine how to address them; any different compensation options, e.g. (a) (c) provide, track, and document responses, if 2% management fee / 20% carry, or (b) 2.5% any; and (d) adjust its management systems, as F. Governance of Stakeholder management fee / 15% carry that are offered appropriate? Engagement to each LP. 3. Investment Committee Decision Making: 6. Transferability of Partnership Interest: Describe 1. External Communication Mechanism: Are stakeholder engagement activities and the fund’s provisions regarding transferability Describe the fund’s external communication outcomes included in Investment Committee of partnership interest. What is the approval mechanism (ECM). Who or what department/ decision making?

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