The Board of Directors and Executives proactively manage certain risks that could affect long-term shareholder returns, namely:
1. Destruction of value due to poor management of the entity where SEP is invested.
SEP gives careful consideration to the SEP executive in charge of the investment and the relationship with the partners involved in managing the successful development of the investment. SEP will strive at all times to have an uncompromising approach to poor management and poorly supported investment decisions.
2. Inefficient and ineffective investment process at the subsidiary entity or at SEP
Senior appointments are carefully evaluated and their performance monitored by SEP’s Board of Directors during the tenure of the investment. This prevents poor decision-making processes. Additionally the board continuously verifies that SEP investments are based on sound evaluation processes and fosters a detailed continual due diligence. These processes are carried out at SEP Board level to avoid mistakes or untimely disinvestments.
3. Country Risk.
SEP will continuously monitor “country risk” versus potential returns on its direct and indirect investments. SEP provides detailed reports to its investor base, including foremost regulatory and legislative aspects.