Norway fund to declare vote intentions
One of the world’s biggest investors will start publicly declaring how it intends to vote at companies’ annual meetings in a move that will ratchet up pressure on boards in Europe and raise the spectre of a sharp rise in shareholder rebellions.
The initiative from Norway’s $870bn oil fund, the world’s largest sovereign wealth vehicle, marks a big departure for shareholder activism in Europe, where big investors rarely say how they plan to vote.
The institution, run by Norges Bank Investment Management, has a reputation for challenging executive pay and accountability at companies ranging from luxury retailer Burberry to Goldman Sachs.
It has always waited until the day after an annual meeting before revealing how it has voted, but now it aims to start making its intentions public for ‘selected companies’ before meetings from next year.
The fund told the Financial Times: “We think this will contribute to the transparency of how we manage the fund and assess questions for voting.”
The fund has always waited until the day after a company’s annual meeting before revealing how it has voted, but now it aims to start making its intentions public for ‘selected companies’ before meetings from next year
The oil fund, which on average owns 2.5 per cent of every listed European company and has stakes in more than 8,000 businesses, said it aimed to reveal its voting intentions for all companies eventually.
“I feel this is actually quite an exciting development, as it will force everyone in the industry to raise their game,” said Hans Hirt, executive director at Hermes EOS, the UK activist investor.
An analysis of the oil fund’s voting pattern this year shows it voted against the pay policies of groups such as Fiat and Morgan Stanley, while it refused to back the auditors at Bank of America and AP Møller-Maersk. It also voted against the election of Jamie Dimon at JPMorgan and against Nokia, Ericsson, Pirelli, SAS and Carlsberg on a range of issues.
In the US, several big pension funds, including Calpers and Calstrs, disclose their votes shortly before annual meetings, but not usually far enough in advance to affect the debate.
Berkshire Hathaway chief Warren Buffett this year faced criticism for waiting until after Coca-Cola’s meeting to reveal that he had abstained from voting his stake in favour of its executive bonus plan.
Published in Dawn, Economic & Business, Aug 11th, 2014