Storebrand's Policy as a Shareholder in Listed Companies

As one of the largest investors in the Norwegian stock market, Storebrand has considerable potential influence over the development of the listed companies in which it is a shareholder.This represents an important responsibility, and makes it very important that Storebrand exercises its influence in a predictable and well-considered manner.

Storebrand aims to exercise its ownership interest to promote consensus between the wishes and views of the owners (shareholders) of a company and the work of its management and board of directors. The values which Storebrand wishes to encourage include openness, transparency and equal treatment for all shareholders.

Storebrand conducts its ownership interests in listed Norwegian companies on the basis of the policy guidelines it established in 1998. In addition Storebrand plays an active role in the development of corporate governance through its membership of the Eierforum, a forum representing Norway's largest institutional investors.

The members of Eierforum have developed 10 rules for corporate governance. These also form the guidelines for Storebrand's policy on corporate governance in respect of its own shareholders.

The main purpose of Storebrand's Corporate Governance is to provide guidelines for its individual portfolio managers. These guidelines focus on the following observable characteristics of listed companies:

Articles of Association
A company's objectives should be set out in the most precise manner possible, and the company's actual business concept and strategy should be fully compatible with its formal objectives. The Articles of Association should not place any restrictions on voting rights or the negotiability of the company's shares other than is required by law or regulation.

Corporate bodies
Membership of a company's corporate bodies should be so arranged as to ensure that the interests of all shareholders are represented.

Investor relations
A company should have a consistent policy for the distribution of information to the market, and the information provided should be sufficient to form the basis for a thorough analysis of the company and to prepare for voting at general meetings etc.

Incentive arrangements
The provision of information on a company's arrangements for rewarding its senior management and directors, including salaries, bonuses, share options etc., is considered to be an important issue. Storebrand takes a positive view of an element of variable remuneration determined by factors such as profits or share price performance, so long as the arrangement can be seen as a real incentive for the individuals involved.

The overall level of each individual's remuneration should be related to his or her workload and responsibility, as well as the results actually achieved. Members of a company's board should not normally hold share options, but it is desirable for them to own shares in the company.
 
Conflicts of interest
Storebrand believes that listed companies should conduct themselves in a manner which demonstrates their commitment to reducing any possibility for conflicts of interest to a minimum. This would for example include a policy of equal treatment, and full openness with all shareholders.
 
Transactions involving share capital
All proposals to undertake transactions involving a company's share capital should be soundly based in terms of structure, timing and scale. This category of transaction can include various forms of share issues, buy-backs of the company's own shares, mergers and de-mergers.

All the above issues are taken into account when Storebrand evaluates a company, and they have an effect on its investment position in the company's shares.

Storebrand's objective is to foster agreement on shared values in relation to both short-term and long-term value creation. It therefore seeks to contribute to improvements in this respect and maintains active contact with the companies in which it invests.

The various types of active involvement in question may be grouped as follows:

Dialogue with company management and company visits
Storebrand will maintain a dialogue with a company's management as part of its normal analysis work, particularly where Storebrand holds a significant ownership interest. Around 150 visits to Norwegian companies are made every year.

Communication with the board of directors
It is natural for Storebrand to discuss its views with the board of directors. This may include issues such as strategy and senior management.

Composition of the board of directors
Storebrand participates in company election committees and supervisory boards in order to exercise influence on the composition of the board of directors and the work of the board. Storebrand plays an active role in proposing suitably experienced candidates for nomination to boards, and intends to pay particular attention to encouraging a higher proportion of female board members.

It is not normally desirable for Storebrand to be represented on the boards of listed companies in view of the extensive restrictions this creates in respect of trading in these companies' shares.

Collaboration with other shareholders
It may from time to time be appropriate, or even in some cases essential, for Storebrand to collaborate with other shareholders in a company in order to ensure that important changes take place.

Sustainable investments
Storebrand carries out its own investment research on companies that are included in the indices used in Socially Responsible Investment (SRI) funds and mandates. These companies are analysed on the basis of environmental and social responsibility criteria, and provide feedback to the companies on their performance relative to other companies in the same industrial sector. The intention is to contribute to continuing improvement in this area, both for the companies that already follow best practice and for those that do not yet fully satisfy these criteria.
 
Voting
In the majority of cases Storebrand will exercise its votes at company general meetings, either directly or through proxies, where shares are held in Norwegian companies. Occasionally, the company will exercise its voting rights on environmental and social responsibility issues, also in the Norwegian market.

Investigations
In certain specific instances Storebrand will either carry out its own investigation or arrange for an independent investigation to be carried out.