NBIM will actively exercise its voting rights in order to safeguard the assets of the funds under management and to promote sustainable development and sound corporate governance. NBIM has entrusted the boards of companies with the stewardship of capital and we will support boards creating long term shareholder value.
NBIM’s voting guidelines address proposals from the board as well as from shareholders. The guidelines aim to cover voting worldwide and pursue consistency in voting. When exercising its voting rights, NBIM will seek to avoid micromanagement and we will vote to protect against any particular shareholders or other stakeholders special interest. Meeting agendas regarding both board and shareholder proposals are reviewed and analysed on a case-by-case basis.
We recognise that cultural differences can affect the way businesses must operate to be successful, this should not however prevent boards from being transparent and accountable. NBIM will take into account local regulation, governance codes, market practises, and sector and company specific factors, in considering whether the proposal benefits shareholder value when deciding how to vote.
There may be company specific factors related to the guidelines laid out in this document. These factors may at times be of such a nature and relevance that they will override the general guidelines described below. The objective is always to vote in a way that benefits the long-term shareholder value for our portfolios.
1. General
NBIM will support:
1.1 the approval of routine matters such as receiving financial statements and other reports from the board, and the discharge of the board of directors. NBIM may however vote against any of these items if discrepancies are evidenced,
1.2 the election of auditors and statutory auditors, unless serious concerns about the accounts or audit procedures are raised, the auditors are being changed without explanation, non-audit fees are excessive and represent a potential conflict of interest or where the auditors’ independence is questionable,
1.3 resolutions seeking increased transparency and availability of timely and relevant information provided the subject is material to the company, and such disclosure will benefit shareholders,
1.4 proposals that request the company to report on political contributions when the current public disclosure is insufficient and such disclosure will benefit shareholders.
NBIM will not support:
1.5 proposals if the information disclosed is not sufficient to make an informed decision.
2. Shareholder’s right to vote
NBIM will support:
2.1 proposals to abolish multiple share classes with disparate voting rights or voting caps. This is based on the general principle of «one share – one vote». When removal of differentiated rights requires a conversion transaction, the terms must be fair and reasonable. We expect all share classes to be able to vote on the conversion transaction,
2.2 proposals to de-bundle all agenda items, so that shareholders can make individual voting decisions on all items,
2.3 annual election of all directors of the board in separated agenda items,
2.4 proposals to implement explicit majority requirements in the election of directors,
2.5 proposals to allow shareholders to propose binding resolutions for the general meeting, including proposals on changes in the company’s articles of association,
2.6 proposals to allow shareholders to request a general meeting to be called, given an appropriate threshold of ownership,
2.7 proposals giving shareholders the right to nominate board candidates efficiently and with reasonable ease.
NBIM will not support:
2.8 the creation of multiple share classes with disparate voting rights or the introduction of cap on voting rights.
3. Board of Directors
NBIM will support:
3.1 boards that are accountable and that demonstrate a commitment to creating shareholder value. NBIM will support the board when information from the companyto the market is transparent and sufficient, business execution is in line with communicated strategy and financial outcomes are satisfactory,
3.2 boards that are composed of individuals with independent perspectives and competencies that meet the specific and changing needs of the company, including sufficient industry and financial knowledge to understand risks and to set strategy,
3.3 boards that demonstrate they have considered the interests of all shareholders in their decision making and actions and that seek to treat shareholders equally,
3.4 proposals to ensure a sufficiently independent chairman
3.5 boards with at least a simple majority of members independent from management, major owners and related third parties. When a board’s key committees (i.e. compensation, nominating and audit) exist they should be fully independen
3.6 proposals requiring directors to own a meaningful number of company shares to better align the interests of directors with those of shareholders.
NBIM will not support:
3.7 boards with less than two independent board members. NBIM will in such cases vote against the Chairman of the board or the most senior board members,
3.8 re-election of directors that fail to act on material requests from shareholders, where these requests have received significant shareholder support. NBIM will also assess whether the board has sought to circumvent or manage shareholder approvals or blocked proposals put forward by shareholders,
3.9 re-election of directors responsible for implementing or maintaining governance structures and practises regarded as poor and insufficient by NBIM,
3.10 chairmen who are also the CEO of the same company,
3.11 election of directors that are over-committed beyond the point where they can reasonably devote sufficient time and attention to act as an effective board member,
3.12 re-elections of directors with low attendance without a stated valid reason.
4. Anti-takeover measures
NBIM will support:
4.1 the abolishment of anti-takeover measures and proposals that would require shareholder approval to adopt or amend antitakeover measures
NBIM will not support:
4.2 the introduction of anti-takeover measures, such as poison pills, excess capital authorisations, classified boards, super voting shares, supermajority vote requirements and golden shares where power is transferred from shareholders to management,.
4.3 re-election of directors responsible for implementing, or renewing, anti-takeover measures without putting it forward to the general meeting.
5. Capital structure and corporate transactions
NBIM will support:
5.1 board proposals pursuing an appropriate capital structure in line with the stated strategy. Shareholders should be provided with a description of all authorised and issued share classes and shareholder rights, among them being the voting and cash flow rights, associated with each class,
5.2 the proposed allocation of income including dividends unless the payout policy and ratio is inconsistent with the company’s financial position and strategy or with other reasonable investor expectations,
5.3 acquisitions and corporate transactions when the transaction is expected to produce positive shareholder returns in the long term. NBIM will assess whether all shareholders are treated equally, there are no unnecessary conflict of interests, there are sufficient representation of independent directors on the board, and there is sufficient transparency of the transaction.
NBIM will not support:
5.4 capital changes or authorisations with the effect of discriminating shareholders over voting rights or facilitating takeover defences,
5.5 capital increases when the issuance, either individually or when aggregated with other planned equity issuances, substantially dilutes the existing equity,
5.6 corporate and related party transactions where there is insufficient transparency of the deal, the decision making process, and to what extent beneficial board members have been part of the decision making,
5.7 corporate and related party transactions with conflict of interests without a justification of why such conflicts cannot be avoided and if they are not demonstrably beneficial for all shareholders.
6. Executive remuneration
NBIM will support:
6.1 remuneration plans that are effective in aligning management interests with long term shareholder value creation,
6.2 remuneration plans that are appropriate to attract, retain and give incentive to perform in line with shareholders’ interests,
6.3 variable pay components triggered by targets that are stretching and based upon an appropriate balance of metrics that reflect long term value creation for the company and its shareholders,
6.4 equity-related incentives as a way to align executives’ and shareholders’ interests.
NBIM will not support:
6.5 plans that may result in excessive dilution to other shareholders, are unnecessarily costly or where their size or structure create undesirable and unintended effects,
6.6 stock option programs that permit grants of stock options with an exercise price below fair market value on the date the options are granted, programs that allow repricing, as well as other plans or programs where the risk element is not properly accounted for,
6.7 proposals where insufficient information on total costs, metrics and risks on whether the plan will reward superior future performance is provided,
6.8 re-election of remuneration committee members, or any director responsible for remuneration in those markets where a remuneration committee does not exist, if NBIM deems the proposed remuneration policy to be unsatisfactory,
6.9 proposals to implement future shareholder vote on remuneration issues («say on pay»).
7.Social and environmental issues
NBIM will support:
7.1 proposals that request reasonable disclosure of the company's policies, strategies, management plans, and performance data with respect to social and environmental issues, including climate change and water-related risks when the current information publicly available is insufficient and such disclosure will benefit shareholders,
7.2 proposals that request the company to perform and disclose a social or environmental impact assessment of specific project or operations when the current information publicly available is insufficient and such disclosure will benefit shareholders,
7.3 proposals that request adoption or implementation of a code of conduct based on human rights and international labour standards covering a company's operations and supply chain when the actions suggested in the proposals are considered to be reasonable with regard to what the company can be held accountable for and will benefit shareholders,
7.4 proposals that require adoption of a policy or reporting on efforts to promote diversity and/or activities against discrimination by gender, religion, sexual orientations, etc, when the actions suggested in the proposals are considered to be reasonable with regard to what the company can be held accountable for and will benefit shareholders,
7.5 proposals that require companies to be transparent about the purpose and extent of interactions with policy-makers and regulators in relation to regulation addressing social and environmental issues, including climate change regulation, when the current information publicly available is insufficient and such disclosure will benefit shareholders.
NBIM will not support:
7.6 proposals that do not address an issue in a way that we consider efficient or beneficial to shareholders, or when the current level of disclosure is considered satisfactory.
