LEGAL NOTICE
Shareholder Engagement and Voting Rights Policy
PREAMBLE
The “Shareholders’ Rights” Directive transposed into French law aims to strengthen long-term investment in companies and promote the transparency of investments made by “institutional investors”. ARCHIMED SAS is required to describe and make available to the public their long-term commitment to the equity issuers in which it invests its funds.
1. Objectives and Scope
With offices in the US and Europe, ARCHIMED is a leading investment firm focused exclusively on healthcare industries. Its mix of operational, medical, scientific and financial expertise allows ARCHIMED to serve as both a strategic and financial partner to healthcare businesses. ARCHIMED helps partners internationalize, acquire, innovate and expand their products and services. It holds generally majority stakes in the invested companies.
The purpose of the shareholder engagement policy is to present ARCHIMED’s commitments as a shareholder and the procedures for exercising the rights attached to the interests it holds. It explains the reasons for ARCHIMED’s commitment and its objectives as well as the measures leading to its implementation. Since inception, ARCHIMED has been a committed Impact investor, both directly and through its EURÊKA Foundation.
2. Regulation
The “Shareholders’ Rights” Directive transposed into French law aims to strengthen long-term investment in companies and promote the transparency of investments made by “institutional investors”. ARCHIMED is required to describe and make available to the public their long-term commitment to the equity issuers in which it invests its funds.
3. Policy Privisions
3.1. Companies Monitoring
Prior to each investment decision, ARCHIMED SAS performs comprehensive due diligence involving partners and the Deal Team. The due diligence procedures include systematic financial, legal, tax and ESG/Impact reviews. They may also, where the activity warrants, include an audit of the commercial, HR, information systems, environmental, industrial processes, intellectual property, insurance and other aspects of the business.
The ESG and Impact screening of investment (exclusion / watchlist / high level ESG assessment / Impact thesis) is described in the ARCHIMEDs-Responsible-Investment-Policy_v2.pdf. The investment team conducts a high-level ESG assessment of the target using a questionnaire, aimed at assessing its overall ESG maturity. An in-depth analysis is carried out by an external service provider.
An action plan is developed in collaboration with the management team based on the results of the due diligence procedure.Monitoring strategy, financial performance, risk, capital structure and corporate governance are inherent in the selection of issuers at ARCHIMED SAS.
ARCHIMED actively monitors the participations through monthly committees and through the achievement of the post completion action plan defined for the company. Financial and non-financial risks are monitored. The Sustainability and Impact team also collects ESG KPIs on an annual basis, as well as Impact KPIs where applicable. The Sustainability and Impact report on our website (Our Impact Approach – ARCHIMED) shows practical cases of ESG value creation.
ARCHIMED SAS is committed to fully exercising its responsibility as a shareholder in the interest of the holder, by investing with a long-term outlook and analysing unlisted companies in detail, with the aim of creating value. To this end, the managers analyse the economic and financial performance of the companies in which they invest, and pay particular attention to their good governance, as well as their social and environmental footprint.
3.2. Dialog with Companies
As a management company investing mainly in unlisted companies, ARCHIMED SAS aims to add value by helping its portfolio companies to benefit from the opportunities available to them, while assisting them in anticipating and preparing for risks.
The ARCHIMED SAS investment team meets frequently with the management of the companies in which it has invested. These meetings aim to better understand and update the companies’ strategy, opportunities and risks. Dialogue is structured through governance bodies (board of directors or supervisory board), working meetings or ad hoc requests.
3.3 Voting Rights Exercise
The voting rights will be exercised if the managed AIFs hold globally at least 5% of the market capitalization of the issuer. The voting rights will be exercised for all companies regardless of the location of the head office. If, however, the expenses involved are deemed too great, the right to vote will be exercised by means of a proxy.
The persons entitled to vote are the Chairman, Managing Directors and all employees or Operating Partners who have been given the power to represent the company. They are in charge of examining and analysing the resolutions presented by the senior managers of the companies in which the Management Company’s funds are invested. The investment teams are responsible for organizing and reporting on the exercise of voting rights.
The principles set out below concern all the securities on which ARCHIMED SAS is required to vote. These principles may be irrelevant, depending on the nationality of the companies, as national laws attribute different prerogatives to shareholders’ meetings.
As a management company, ARCHIMED acts in the interest of the AIF holders it manages. In terms of corporate governance, executive compensation, and corporate structure, the voting policy aims to create value for all stakeholders and to advance the principles of good governance.
In accordance with these principles, ARCHIMED SAS examines the resolutions put to vote on a case-by-case basis and in particular:
Decisions leading to a modification of the articles of association (Extraordinary General Meetings).
Equity issuance and repurchase programs.
Approval of the financial statements and allocation of earnings.
Appointment and dismissal of corporate bodies.
Regulated agreements.
Appointment of statutory auditors.
The implementation of ARCHIMED SAS's voting rightsvoting procedure is based on the monitoring and analysis of the resolutions proposed at General Shareholders' Meetings, in application of the basic principles of good governance set out below:
Monitoring compliance with the statutory rights of shareholders (application of the “one share, one vote” principle).
Monitoring the quality and powers of members of the board of directors or supervisory board (application of the principles of separation of powers and independence of the board).
Monitoring the remuneration paid to senior managers and, in general, verifying the suitability and proportionality of the profit-sharing of senior managers and employees (application of the principles of transparency and fairness of remuneration).
Monitoring the allocation of earnings and use of capital, (the principle of “prudent management” of the capital from which cash remuneration is paid to senior managers).
Approval of the accounts, management report, regulated agreements and the reappointment of the Statutory Auditors (application of the principles of accounts integrity, quality of communication and limiting conflicts of interest when renewing statutory auditor mandates).
Analysis of strategic developments and capital transactions (which must be justified, balanced and uphold the preferential subscription right of shareholders) such as share schemes to repurchase shares or issue new shares, and all the various proposals that may be submitted to shareholders (directors’ fees, other statutory changes, etc.).
In terms of non-financial aspects, the voting policy aims to encourage business practices that respect the environment, fair work practices, non-discrimination, and the protection of human rights. The policy aims to follow the recommendations of international bodies such as the United Nations (UNEP FI, UNPRI). Each of these initiatives aims to advance the good ESG practices of companies and to mitigate reputational risks.
As ARCHIMED holds unlisted securities, the exercise of voting rights is inseparable from the investment strategy, the management company reports on this in the annual report of each fund managed.
3.4. Cooperation with Other Shareholders
The dialogue with the company and the shareholders among themselves is governed by the articles of association. Usually, because the number of shareholders is limited in unlisted companies, the articles of association are completed by a shareholders’ agreement. These agreements are complementary to the articles of association and make it possible to define, among other things, the methods for resolving conflicts, protecting minority shareholders, and preventing the sale of shares from leading to a loss of control or liquidation of the company.
3.5. Communication with Relevant Stakeholders
ARCHIMED interacts with various stakeholders: shareholders (co-investors), managers and key executives, bankers, advisors, consultants, etc. Co-investors, managers and key executives represent the first circle of relevant stakeholders in our business, with value being added by both managers and individual financial investors. These exchanges may be part of a broader initiative to address systemic issues, such as climate change, or more company-specific concerns shared collectively by a group of investors.
4. Prevention of Conflict of Interest
ARCHIMED exercises the voting rights solely in the overall interest of the holders, without considering its own interests and this, in accordance with the principles described in this policy. There are no recorded conflicts of interest related to the exercise of votes.
5. Communication
The policy is disseminated, in accordance with regulatory requirements, on the ARCHIMED website. Each change to this policy is subject to a new publication.