6. Shareholder engagement
We vote at the general meetings of almost all companies in which our funds are shareholders, and participate in nomination committee work. The sustainability programme also includes proactive and reactive dialogues. Everything is documented in a company-wide Engagement Logbook.
Voting at general meetings
Voting at general meetings is an expected part of our active management, which is aimed at protecting the value of our investments and generating good returns in the portfolios we manage.
As far as possible, Carnegie Fonder’s fund managers participate in general meetings and vote on behalf of the shares in the portfolios. When it is not possible for us to attend, we seek to vote through proxy for the shares we manage.
As with our corporate financial analysis, we perform individual analysis of the issues that may arise in connection with the meetings.
Our fund managers must act exclusively in the joint interests of fund unitholders. Therefore, we never accept a seat on the board of directors of a holding because we would then be insiders, unable to buy and sell without restriction.
However, we are happy to participate in nomination committees.
They have their respective challenges, but there is also a common denominator for the directors we prefer to nominate: integrity is a must.
There is a strong main owner in many of the companies in which we are shareholders. In these cases, it can be particularly important to identify prospective directors with the courage to object and engage in discussion. The point is to find directors who speak their minds.
Meeting company representatives, preferably on-site at their business, is an important aspect of our company analysis. Following initial investment, we maintain regular dialogue with the holdings.
As long-term investors, we want to express our opinions and expectations and encourage our holdings towards an approach that is as long-term as our own, with regard to, for example, investments in more sustainable production.
A consistent theme in our proactive dialogues is that we encourage our holdings to be more structured in their sustainability work and to integrate sustainability into all aspects of their business.
Accordingly, we prefer our holdings to sign the ten principles of the UN Global Compact and to measure, report and reduce their climate impact.
If we receive information that a holding is not meeting our sustainability standards, we rarely sell the holding immediately, preferring instead to initiate a dialogue to ascertain that the company clearly understands the problem and wants to improve.
The process is as follows::
- The fund manager seeks further information and discusses the holding with our Responsible Investment Board.
- The fund manager contacts the company to discuss our concerns.
- The CEO of Carnegie Fonder makes more formal contact with the CEO or chairman of the holding.
- We contact other shareholders to initiate joint shareholder engagement.
- If the response is unsatisfactory and the company does not demonstrate a willingness to change, we may decide to divest the holding.
The time it takes complete these processes varies, depending upon the nature of the issue, the size of our holding and where the company is based geographically. Each case is unique and is evaluated individually.