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Corporate governance policy

AP3 is an engaged, responsible owner that manages assets with the fundamental view that investments in well run companies deliver higher returns at a lower level of risk over time.

AP3’s corporate governance policy is based on the National Pension Insurance Funds Act (2000:192) which prescribes, among other things, that the Fund’s mandate is to generate high returns at low risk. AP3 is to exercise corporate stewardship in such a manner as to maximise long-term return on managed assets for the benefit of current and future pensioners. Economic policy or other financial policy may not be taken into consideration. Corporate stewardship must be clearly focused on delivering maximum returns on managed assets. The investment rules stipulate that the Fund’s total holding of Swedish equities may not exceed two per cent of the total market value of Swedish companies on Swedish markets. The Fund’s equity interest in any particular company may not exceed ten per cent of the votes in that company.

Codes of corporate governance

Codes of corporate governance are in place in many countries as an important means of instilling confidence in stock markets and in companies, and are also a tool used by the Fund in its corporate stewardship. The Swedish Code of Corporate Governance effectively utilises the distinctive character of the Swedish corporate governance model: the strong position of the AGM; boards on which corporate management representatives do not sit, other than the CEO in exceptional cases; and distinct principal owners and nomination committees that include representatives of the largest shareholders. While codes that highlight best practices in local markets offer many advantages, stewardship must be based on what is best for each individual company.

Organisation and division of responsibilities

Our corporate governance policy is approved by the board of directors and revised as needed. The Fund’s CEO has overall responsibility for enforcing the policy, but can delegate administration of ownership issues within the Fund. Stewardship-related issues of particular importance are handled in consultation with the Fund’s board of directors. Day-to-day stewardship is managed by the Fund’s ownership group.

In some situations, the roles of corporate steward and investor may come into conflict.  This may happen, for example, when the Fund’s employees have access to insider information, which may restrict the Fund’s capacity to buy or sell a certain equity. The Fund has strict procedures for managing such situations.

Principles for corporate stewardship

AP3’s corporate governance policy sets out core principles for corporate stewardship and describes the Fund’s approach to social, environmental and governance aspects in investee companies. The principles are comprehensive and apply to all of the Fund’s investee companies, both Swedish and foreign. Because we normally have a much greater equity interest in Swedish as compared to foreign investees, we have greater ability to exert influence in these Swedish companies. AP3 focuses its stewardship on areas where we believe we can achieve maximum impact and exert the most influence. Accordingly, our corporate governance policy may be applied differently depending on the company’s geographic domain and the size of the Fund’s holdings.

AP3 is a signatory to the UN’s Principles for Responsible Investment – PRI. The principles cover environmental, social and stewardship issues.


Stewardship policy 2021