We have published our updated ownership policy, which describes the expectations Varma has of companies in which it is a significant shareholder.
At the same time, we wished to increase the transparency of ownership and its related practices by publicly and openly sharing how Varma uses the influence it gains from its ownership and what the goals for it are.
The objective is clear: to achieve good, long-term return for shareholders – sustainably.
Varma is a long-term owner and we can be patient as long as we believe that a company’s operations are capable of creating long-term value. We expect corporate sustainability and all the more so when the aim is to create sustainable success stories.
As an owner, the equality of shareholders is also crucial. We are prepared to use the power that ownership brings us, but our unshakeable principle is that all shareholders must be treated equally. A good overall return on a share is in the common interest of all its owners – regardless of size.
Owner’s voice heard in board appointments
In companies in which Varma is a large shareholder, we obviously wish to use our influence. Even then, our intention is to play the role of active owner – not an activist investor that would push its way into board territory.
For us, the primary method of influencing companies is to participate in the discussion when a company’s board of directors is being formed. After that, we trust that the expert and capable board of directors and operative management will create the best value for their shareholders through their decisions and work. Of course we also monitor companies’ development closely and engage in dialogue with their managements.
Over the past 10–15 years, boards have taken on a more significant role in managing companies. Power has shifted from the operative management to the board of directors, making board work more demanding than ever. Against this background, it is understandable that a lot of effort is put into assembling a board of directors. In Finnish companies, the nomination process has become noticeably more professional over the past decade.
As I see it, in the Nordic ownership structure where companies often have a few larger owners, using a nomination committee is sensible and practical. Shareholders’ nomination committees are an important channel for Varma to let the owner’s voice be heard and we are involved in them whenever our share in a company enables it – helping to increase the companies’ value and thus benefit current and future pensioners.
Reima Rytsölä
CIO
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