NETHERLANDS - Belgian Dutch financials firm Fortis needs to drastically change its governance structure, says major Dutch pension fund ABP.
The €205bn ABP pension scheme, now the largest shareholder of Fortis after Chinese insurer Ping An since the bank raised fresh equity of around €1.5bn at the end of June, today said it is now time for Fortis to take action.
Paul Frentrop, head of corporate governance of ABP's asset manager APG, told IPE today: "We do not want to occupy the chair of Fortis' management, but it is now Fortis' turn - we expect the management at Fortis to make proposals to change the governance structure."
ABP had already made this wish known at the share issuance at the end of June, according to Frentrop, though he denied Fortis' willingness to make changes to its structure was one of ABP's demands to take part in the asset raising.
"We have always thought the governance structure of Fortis wasn't optimal, which is one of the reasons we never had that many shares in the company," said Frentrop, who added ABP also made this known on previous shareholder meetings.
Frentrop said ABP is not working with other shareholders or shareholder organisations such as VEB and Deminor, who have also campaigned for Fortis to change its governance structure.
Fortis is a product of the merger of the Belgian AG Groep and the Dutch insurer Amev. The company's organisational model has both Dutch and Belgian holding companies, two listings on the stock exchange, and two headquarters.
"This is a strange structure," said Frentrop, adding the shareholder meetings which the company is planning to hold later this month are a good time to implement changes and improvement.
"At the end of August, Fortis will talk to shareholders, which would be a good moment to present the first proposals," he concluded.
ABP stresses the organisational changes are not a priority, adding operational questions like the integration of ABN Amro are more important.
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