The three pension funds of the Dutch Royal Airways (KLM), with combined assets under management of around €23bn, have voted in favour of a resolution calling on Microsoft to improve its tax transparency.

The pension funds for pilots and ground staff announced the move on their websites, as part of a quarterly report about their voting behaviour at annual general meetings (AGMs) of the firms they invest in.

The fund for cabin crew confirmed its support for the resolution after it was contacted by Pensioen Pro, IPE’s Dutch sister publication.

Tax avoidance

The KLM funds supported a resolution in December that was calling for Microsoft to report on its tax affairs in a more transparent way, according to the Global Reporting Initiative Tax Standard, a reporting standard designed to encourage companies to be transparent about their tax payments and discourage tax avoidance.

“The latter causes governments to miss out on tax take that they could have otherwise used to provide public services and improve sustainable development. As a result, tax avoidance hinders sustainable development,” according to the KLM funds.

The Microsoft resolution was not passed, receiving only 23% of votes. The KLM schemes supported it because they believe the benefit of possibly higher profits thanks to tax avoidance does not outweigh the risks of checks by tax authorities “that can lead to reputational damage, legal fees and fines. These could have a negative impact on our investments,” according to the three pension funds.

Similar resolutions filed at Cisco and Amazon also failed to receive majority support. But investors that would like to see this changed are hopeful.

Hitherto, companies had been able to fend off resolutions on tax transparency on the basis of ordinary business exception: a resolution that talks about a company’s operational business affairs is the responsibility of the board, not of its shareholders.


But last year, the US regulator SEC for the first time refused a company’s claim on ordinary business exception with regards to resolutions on tax transparency. The Securities and Exchange Commission (SEC) considered the resolution was “transcending ordinary business matters” and therefore shareholders should be allowed a vote on it.

The KLM schemes expect the changed stance of the SEC to lead to more resolutions on tax transparency during the 2023 AGM season that will start in spring.

This article appeared originally in Pensioen Pro, IPE’s Dutch sister publication. It has been translated and adapted for IPE by Tjibbe Hoekstra.