SWEDEN – Swedish pension fund AMF has condemned the move by Germany’s Volkswagen to abolish the board nomination committee at Swedish automaker Scania.
The motion proposed by Volkswagen – Scania’s majority shareholder – was passed at Scania’s annual general meeting on 3 May, despite opposition from AMF and other minority shareholders.
Anders Oscarsson, head of corporate governance at AMF, said: “In all my years as head of corporate governance, I have never experienced anything like this and can only regret that it is happening at a company as fine as Scania.”
He said AMF and 14 of Scania’s 20 largest shareholders voted against the motion, and said Scania’s reasons for abolishing the nomination committee were unacceptable.
“The work of a functioning nomination committee work is a central part of the Swedish Code of Corporate Governance,” Oscarsson said, adding that the same applied to company codes within the EU.
“It is unacceptable that the dominant principal shareholders ignore the nomination process and in practice stop 40% of the shareholders from influencing the composition of the board.”
Without a qualified nomination process anchored among minority shareholders, the board’s work will suffer, he said, with the position of independent directors becoming undermined by the board members appointed by a sole shareholder.
Before the meeting, AMF and other shareholders tried to discuss the issue with Volkswagen to find a way of keeping the nomination committee going with senior representatives from the Swedish business sector and capital markets, he said.
But this had regrettably not been possible, he said.
In other news, Sweden’s Folksam Liv reported an investment return of 2.3% for the first quarter of this year, up from the 1.2% reported for the same period last year.
Premium income slipped to SEK2bn (€234m) from SEK2.2bn.
The Folksam subsidiary KPA Pension produced a return of 2.2% for the period, up from 1.4% in the same period in 2012.
Premium income at KPA Pension rose to SEK6.8bn from SEK6.2bn.
Folksam’s group assets under management increased by SEK14bn to SEK295bn at the end of March.