Our stewardship activities aim to reinforce the companies in which we have ownership interests

The general meeting of shareholders is the companies’ highest decision-making body. Voting rights are the most important tool that shareholders have in order to exercise their ownership influence.

Första AP-fonden endeavours to ensure that this right and the right of proposal remain unrestricted even in jurisdictions where this right does not follow from law. We endeavour to attend general meetings of Swedish listed holdings, and we vote at all general meetings, both Swedish and foreign. 

The principle of equal treatment is a cornerstone of corporate law. Första AP-fonden endeavours to ensure that shares with the same economic rights in the company are treated equally in financial terms.  Deviations from this may only be made in accordance with the terms of the Articles of Association. It is important to ensure that the interests of minority shareholders are protected.  

Companies must have an efficient and effective capital structure that favours the short-term and long-term development of the company. Different methods for adjusting the capital structure must be justified by the companies’ Boards of Directors. Decisions on dividends, the issue of new shares, the repurchase of own shares and any redemption of these shares must be made by the general meeting.  

See our Responsible investment policy for more information

According to the Swedish Code of Corporate Governance, the election and remuneration of the Board of Directors and auditor must be prepared by means of a process that is governed, structured and openly stated by the owners and creates the conditions for well-founded decisions. Första AP-fonden endeavours to ensure that the nomination of a chair and members takes place by means of a clear and transparent nomination procedure. Första AP-fonden also endeavours to ensure that the owners’ influence over the election of Board members is maintained or, in some cases, increased.

We believe that effective and successful Board work, where the Board works with different perspectives on issues of importance to the company, requires diversity in terms of Board composition. We believe that groups, and therefore Boards of Directors, with a high level of cognitive diversity are more effective and therefore better equipped than more homogeneous groups to deal with risks and opportunities. Therefore, Första AP-fonden endeavours to ensure that the recruitment base for Boards is broad so as to achieve gender balance and a high degree of diversity in respect of expertise, background and experience on all Boards.

See our Responsible investment policy for more information

For Första AP-fonden, it is fundamentally important that the remuneration of senior executives in the companies in which we invest is designed to reward efforts that create long-term shareholder value while also ensuring that the company is able to attract and retain the right expertise. The remuneration structure must incentivise participants to achieve both financial and non-financial targets, thereby contributing to the company’s long-term value creation. We are seeing an increase in the number of companies choosing to link remuneration to sustainability-related targets; a development that we welcome when it is clear that the non-financial targets are linked to the companies’ long-term financial performance. 

Every year, Första AP-fonden actively participates in dialogues with Boards, mainly in Swedish holdings, where we attempt to influence the companies to structure their remuneration programmes in accordance with our expectations. The structure of remuneration to senior executives is the issue where we most frequently vote against Boards’ proposals, and in most cases this is because we believe that the performance requirements to be too low and that the programmes are otherwise too generous and extensive.

See our Responsible investment policy for more information

It is in the interests of shareholders to ensure that the external audit and internal control are of adequate quality. The Board of Directors is responsible for the organisation of the Company and the management of its affairs, which includes ensuring appropriate internal control, risk management and compliance. Every company must have formalised procedures in place to ensure compliance with the established principles of internal control. The auditors are appointed by the general meeting and are the shareholders’ control body. Very stringent demands must be made in respect of the independence of the external auditors from the Company, its management team and its Board of Directors. 

Första AP-fonden expects the companies in which it invests to respect the international conventions and agreements endorsed by Sweden, including conventions on the environment, human rights, labour law, corruption and controversial weapons, as well as initiatives such as the UN Global Compact, the UN Guiding Principles on Business and Human Rights (UNGP) and the OECD Guidelines for Multinational Enterprises.  

Första AP-fonden wants companies to work strategically to integrate sustainability issues into their business operations. Strategic work involves acting responsibly and minimising the risk of negative impacts, but also seizing opportunities for sustainable value creation through innovative business models and solutions.  We believe that both climate change and the ongoing transition to a world less dependent on fossil fuels, in line with the Paris Agreement, have an impact on the Fund’s ability to create long-term value for future generations. That is why our goal is to achieve a carbon-neutral portfolio by 2050, with an initial target of halving our carbon footprint by 2030, mainly by means of emissions reductions at the companies in which we invest.

We expect the companies in which we invest to understand and manage their relevant climate risks.  

The companies must adopt relevant, ambitious and credible objectives for their strategic sustainability efforts. We want the companies to adopt climate goals and associated transition plans to reduce carbon emissions.   

Companies must seek to maintain an open and continuous dialogue with their shareholders. The companies’ information must be accurate, clear, factual and credible. The information provided by the companies must make it possible to arrive at an informed assessment of the future development of the company and the factors that add value for shareholders.  The companies must endeavour to be clear about their objectives and the financial and strategic implications of the goals defined. The companies should also describe in a transparent manner how policies and guidelines adopted are implemented, monitored and evaluated. The code of conduct or equivalent, anti-corruption policy, climate policy and tax policy are all examples of relevant policies.