Pension funds in Denmark are signalling a continued commitment to pushing for diversity in the composition of the boards at companies they invest in, at home and abroad, in 2025 – particularly in their voting at this year’s annual general meetings (AGMs).
At a time when the US government under president Donald Trump has axed diversity, equality and inclusion (DEI) programmes – illustrative of the US zeitgeist more generally – several providers in Denmark’s DKK4trn (€536bn) pension sector affirmed they still believe in a broad mix within company leadership.
Three weeks after Trump’s inauguration, top proxy adviser Institutional Shareholder Services (ISS) said it would no longer consider the gender, racial or ethnic diversity of US company boards when making its voting recommendations, citing the attention around the DEI action for the decision.
However, its rival Glass Lewis has since decided to remain largely committed to diversity.
Ellen Karin Pedersen, senior active ownership specialist at Velliv, said the Danish pension provider is now using its own voting policy for board diversity.
“When ISS announced the decision to halt research related to board diversity for US companies, we did not want to lower our expectations of boards on the matter, and we therefore switched to a custom voting policy to keep the specific voting criteria for 2025 onwards,” she told IPE.
Amir Hassan, ESG specialist at Danish pension fund LD Pensions, said the DKK46bn pensions manager very strongly believed that gender, racial and ethnic diversity on boards were important drivers of long-term value creation and good corporate governance.
“We strongly align our view with the prevailing research concerning board performance, which highly suggests that a diverse board brings broader perspectives, better decision-making, and stronger risk management, which benefits both shareholders and the company,” he noted.
On the moves by proxy-vote advisers, Hassan said: “We understand that proxy-vote advisers are navigating in an increasingly polarised political landscape, while also guiding investor decisions.”
He added: “We, however, intend to further promote diversity in boards for the companies we invest in.”
Diverse board is essential for success
AkademikerPension, meanwhile, has told investee companies that it views a strong and diverse board as essential to a company’s success.
In the letter sent by the Danish pension fund in mid-February to Danish companies outlining its engagement and voting approach – a set of priorities that it says also reflects its global stewardship efforts – AkademikerPension stated: “We continue to vote against the re-election of the nomination committee or the chair of the board if the board consists of less than 30% of the underrepresented gender.”
While it might make exceptions “in justified cases”, the pension fund said it viewed diversity at board level as “a key element in ensuring robust decision-making and building forward-looking businesses”.
Jan Kæraa Rasmussen, head of ESG and sustainability at PensionDanmark, said the ISS move was unlikely to have a dramatic impact on the blue-collar pension fund’s voting decisions.
“We will continue to support adjustments in board compositions that demonstrate positive potential and improved governance, especially when they reflect the relevant skill mix and backgrounds needed to oversee the business and interact with the daily management.
“Our primary focus will be voting against the combination of the chair and CEO roles, as we believe this is not in the best interest of shareholders,” he said.
Stewardship efforts
Denmark’s biggest pension fund, PFA, said it was now intensifying its stewardship efforts at US companies in response to the expected restriction of shareholder rights there.
In February, the Securities and Exchange Commission (SEC) revised guidance, making it easier for companies to avoid bringing shareholder resolutions to a vote at AGMs.
Rasmus Bessing, PFA’s head of responsible investment, said: “We will increase our presence, including through proposed resolutions at the upcoming general meetings.”
Bessing singled out McDonalds and Meta, in particular, saying these two major US firms were based in Delaware – one of the states where shareholder rights were under particular pressure. PFA had already put pressure on McDonald’s and other US firms to increase transparency about how they handled their impact and dependence on biodiversity and ecosystems, he said.
“We also have a critical view of Meta, which we believe should do more to prevent the spread of misinformation and to ensure children’s mental health,” he continued.
At Sampension, the pension fund’s head of ESG Jacob Ehlerth Jørgensen said the institution’s main corporate governance priorities for 2025 were reviews of its existing processes related to human rights and climate.
Further to that, he said, Sampension was working on implementing action plans on biodiversity and integration of ESG in its real estate investments.
“A common denominator for all four themes is that we want them to be fully integrated and reflected in our active ownership and as such they do inform our view on how well managed a company is,” he said.
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