Important premises of Varma’s ownership policy are the equality of the shareholders, transparency and responsibility
The goal of Varma’s investment operations is to secure the long-term and sustainable financing of the earnings-related pension scheme. We pursue this goal by, among other things, widely diversifying investments across and within various asset classes. Through diversification, we strive to achieve the best possible return on investments and secure the payment of pensions, regardless of the market situation. Investments are made in Finland and abroad, and they may consist of both direct and indirect equity investments. All investments must be in line with the investment plan that is approved annually by Varma’s Board of Directors. The investment plan defines the general principles for investments, the basic allocation for investments, targets for return, diversification and liquidity, decision-making powers, control systems and reporting, among other things.
The policy covers Varma’s equity holdings both in Finland and abroad. Our activities are focussed on companies and themes in which we estimate we can best make use of our expertise and have significant opportunities for engagement. Varma is a large shareholder typically in Finnish companies. Application of the share ownership policy varies according to, among other things, the companies’ stage of development and ownership structure. In the case of unlisted companies, the special characteristics of each company are taken into account when applying the policy.
The starting point for Varma’s share ownership policy is the shareholder’s position in the company as a financer who targets a return on their capital. At the same time, the shareholder is the company’s key risk bearer, who receives a return only after other stakeholders have received their contractual compensation. The shareholder receives a return only once the company’s business has proven profitable in the longer term. Monitoring and influencing the company’s operations are essential in order to secure these key aspects.
As a shareholder, Varma receives information about the operations of companies through many channels. In addition to companies’ reporting, we take part in investor events arranged by companies and in general meetings of shareholders. We regularly meet with the management and boards of directors of the companies in which we have a holding, especially those companies in which Varma has a major holding. During the meetings, we discuss the company’s targets, possible challenges, responsibility and other matters that are important to the company’s success. Our aim is to understand and assess the company’s and management’s operations as a whole, and to communicate to the company our policies and expectations as a shareholder. Important premises of Varma’s share ownership policy are equality of the shareholders, transparency and responsibility.
Varma engages in dialogue with investees, as well as with other shareholders and stakeholders. Varma strives for engagement jointly with other investors, especially when Varma’s holding is small, however also in cases where Varma is not a direct shareholder. This makes addressing problems easier and more effective. The more shareholders behind the engagement process, the greater its impact will be on the decisions made by the investee.