Alecta, AMF, AP1-4 and other large Swedish pension funds and asset managers are warning Stockholm-listed companies against any moves to shift to digital-only annual general meetings (AGMs).

The lobby group Institutionella Ägares Förening (IÄF, Institutional Owners Association) – which has 18 members – said: “IÄF has learned that there is an ongoing discussion about the need for Swedish listed companies to propose an adjustment to the articles of association before the spring’s annual general meetings, to enable purely digital shareholder meetings.

“IÄF sees no need for such proposals,” the association said in a statement earlier this month.

Thomas Ehlin, head of corporate governance at AP4, said on Friday: “As an active shareholder on the Stockholm Stock Exchange, AP4 sees the importance of ensuring that all shareholders can exercise their voting rights in all situations and to encourage committed ownership regardless of whether one is a major shareholder or not – it is an important part of the Swedish ownership model that we cherish.”

IÄF said the Companies Act and the Swedish Corporate Governance Code already allowed for hybrid digital and physical shareholders meetings, without changing firms’ articles of association.

“Hybrid meetings have already been applied with success and create the opportunity for high attendance from the shareholder collective, combined with the possibility of physical presence for those who so desire,” it said.

“IÄF protects the physical general meeting and believes that the Swedish model for company and owner governance is based on committed and responsible owners, and the possibility of physical participation at general meetings is central in this,” the group said.

AP4 argued in its separate statement that having completely digital general meetings harmed individual shareholders’ ability to make their voices heard, and also put their ability to exercise their right to vote at all at risk.

“It is unclear who is responsible and what happens if the digital connection is interrupted during an ongoing general meeting,” the Stockholm-based buffer fund said.

AP4 said that in such cases, the law referred to conducting separate legal proceedings, but the fund said that was an unsatisfactory way to deal with such risks and said it “clearly shows the inappropriateness of purely digital meetings without the possibility of physical participation”.

A year ago in Switzerland, the pension funds-backed Ethos Foundation opposed a proposal by pharmaceutical company Novartis to add the possibility of fully virtual AGMs to its articles of association, saying the idea represented a deterioration of shareholder rights.

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