SWEDEN - The governance structure of institutions potentially causes a conflict of interest between pensioners and active employees, says Peter Lindblad, managing director of Stockholm-based FPG-AMFK Pensionsgaranti.

Speaking earlier this week in Amsterdam at the AEIP and the EFRP governance conference, Lindblad argued the governance structure of the institutions tends to give more influence, through trade union appointees, to the active employees.

But this could make it difficult to argue pension funds are acting in the interests of employees because the move to meet fiduciary requirements might clash with employee actions through the unions.

"As major shareholders, the large institutions are normally involved in nomination committees of listed companies," he said.

He added: "In recent years, the pension institutions have become much more active in this area and they normally attend the shareholders' meetings of companies they have invested in."

They are also actively engaged in a dialogue with listed companies regarding share-based incentive programmes, said Lindblad.

"Pension funds act as investors, and not as stakeholders, representing a more general interest and if you look at how they have been acting in governance issues it is very difficult to say  that pension funds act in a different way from other large investors."

Lindblad said even though pension funds are governed by social partners, who normally appoint 50% of the board of directors of the institutes, it has, so far, not had an impact on their approach to corporate governance.

"Maybe this is something that is going to be debated more in the future," he concluded.