Första AP-fonden's Ownership policy

Första AP-fonden’s ownership policy serves as a basis for the Fund’s actions in ownership issues. It contains clear guidelines for the most common aspects of shareholder activism.

Link to Första AP-fonden’s current Ownership policy.

Seven principles for shareholder activism – a summary

The ownership policy is made up of seven principles for environmental, social and corporate governance (ESG). Each principle is divided into two parts, of which the first contains general principles that apply to all of the Fund’s holdings and the second applies to Swedish companies, where the Fund generally has larger ownership interests.

The principles are:

1. Voting rights and right of proposal at general meetings

The exercise of voting rights at general meetings is the shareholders’ most important tool for exerting their ownership influence. This right should be unrestricted. The shareholders must be able to propose items to the agenda of general meetings and to have these items taken up for discussion.

2. Equal treatment

Shares granting equal financial rights in a company should always be treated equally in a financial respect. It is important that the interests of minority shareholders are protected.

3. Capital structure

Companies should have a capital structure that is appropriate with regard to the company’s future ability to generate returns for its shareholders. Shareholders should have opportunities to vote at general meetings regarding new share issues, dividends and buy-backs of the company’s own shares. Existing shareholders should have the right to take part in new share issues, for which reason pre-emptive rights issues are recommended. There should be no obstacles to acquisition of the company; they should not be introduced and any existing obstacles should be eliminated.

4. The companies’ boards of directors

The right to nominate and vote for board members at a general meeting is of fundamental importance for the shareholders. Nomination of the chairman and board members should take place through a clear and open nomination procedure. The shareholders should have an influence on election of board members.

The members of the board should have relevant expertise and integrity. The composition of the board should be characterized by diversity in terms of gender and ethnic origin. Första AP-fonden’s position is that a company’s board chairman and managing director should not be one and the same person. The board of directors should include an adequate number of members with an independent status in relation to the company’s management and major shareholders.

5. Compensation to senior executives and incentive schemes

Management compensation should be structured in such a way that it benefits the company and its shareholders. The compensation should be reasonable and market-based. Any variable portion of compensation should be performance-related, evaluable and linked to the company’s profitability.
The pension plans of senior executives should be of the defined contribution type.

6. Audit and internal control

The external audit and internal control should be of a high quality. The external auditors should be independent from the company and its management.

7. Environmental and social issues

The companies’ operations should be conducted in a financially, environmentally and socially responsible manner. The companies themselves are responsible for compliance with international conventions, regardless of whether these are directed to national governments, to individuals or to companies and organizations. This responsibility applies regardless of whether the countries in which these companies operate have signed the conventions or have weaker legislation.

In December 2012 the Fund sent a letter to the chairmen of all nominating committees in the Fund’s Swedish companies.

Första AP-fonden's ownership policy applies as of 10 December 2014, and replaces the earlier policy.

Previous ownership policies

Ownership policy dated  11 December 2013

Ownership policy dated 19 April 2013

Ownership policy dated 13 December 2012

Ownership policy dated 15 February 2012

Ownership policy dated 17 February 2011 (pdf)

Ownership policy dsted 14 December 2009 (pdf)

Ownership policy dated 21 October 2009 (pdf)

Ownership policy dated 11 December 2009 (pdf)