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14-03-2023 10:21

Using our voting power to influence how companies are run

Did you know that Nordea is the largest portfolio manager in the Nordics and actively use its voting rights at almost 4,000 annual general meetings with around 50,000 items on the agenda and 1,200 proposed motions each year? Now you can see how we vote at every AGM in every company in our fund investment universe. Our votes are published within 24 hours, so everyone can see how we vote and act.

The purpose of Nordea’s investment funds is to create value for our unit holders. As the largest portfolio manager in the Nordics, we have great voting power and a responsibility to act in the best interest of our unit holders. This is where our corporate governance team comes in.

“Corporate governance means that we research our investments, create and share best practice and engage with investee companies to steer them in the direction that we believe will create most value for our unit holders,” says Richard Torgerson, corporate governance specialist at Nordea Funds.

The team works closely with Nordea’s responsible investment team and investment organisations in the Nordics and Luxembourg as well as with external portfolio managers.

“You could say that our responsible investment team works with investee engagement based on portfolio management, while the corporate governance team strives to make a difference through our influence as owners,” says Richard Torgerson.

All decisions are our own

Spring is AGM season and a busy time for the team. Although they get recommendations that are based on Nordea’s principles and instructions, no decisions are made automatically. The corporate governance team always make their own decisions based on recommendations from the responsible investment team, external vendors or on previous decisions.

“We review all background material and recommendations, we ask questions – and then we reach our own, independent decision. The bigger our ownership share, the more important our decision and the more work we put into it,” says Richard Torgerson.

Nordea’s voting portal is continually updated and now you can see how we vote on various issues on fund level instead of on an aggregated level as previously. You can search for a specific company or fund, or view general level statistics on how we vote in different sectors and regions.

Dialogue and engagement take place before AGMs

As far as possible, we engage with companies through dialogue well before the AGMs. This is a gradual and subtle approach that has produced good results, meaning that Nordea rarely has to take to the barricades to influence how companies are run.

The corporate governance team is also responsible for making sure that Nordea takes a seat on nomination committees whenever we are invited to participate. Nomination committees submit proposals to AGMs on for instance remuneration levels for executives, board members and accountants, the composition of the board of directors and the position of chairman.

“Our policy is to accept all offers to participate in nomination committees. We usually have a seat on 40–50 nomination committees each year,” says Richard Torgerson.

Active ownership