Recommendations for Active Ownership

Topdanmark publishes a policy for active ownership that describes how Topdanmark integrates active ownership into its investment strategy.

Topdanmark’s objective of exercising active ownership in order to make use of its potential influence is to disseminate a responsible and value creating behaviour with due respect for the surrounding community.

The report on active ownership for Topdanmark describes how Topdanmark exercises active ownership in accordance with the policy for active ownership.

1. Policy for active ownership

In connection with equity investments in public companies, Topdanmark publishes a policy for active ownership which describes how Topdanmark integrates active ownership into its investment strategy.




2. Monitoring and dialogue

Having proper regard for the investment strategy and the principle of proportionality, Topdanmark monitors and is in dialogue with the companies in which Topdanmark has invested.

Topdanmark relates to all significant investor-relevant information published by the companies in which Topdanmark controls substantial ownership shares, including the annual report, interim and half-year reports, periodical announcements, investor presentations, the company’s report on corporate governance, sustainability-, CSR and ESG reports.

Topdanmark exercises active ownership through either a proactive or reactive dialogue with a company:

  • The objective of a proactive dialogue is to encourage a company to improve e.g. transparency or increase the ambitions related to one or more ESG goals.
  • The objective of a reactive dialogue is to encourage a company to address any problems identified by Topdanmark’s regular portfolio screening.

Topdanmark’s objective of exercising active ownership in order to make use of its potential influence is to disseminate a responsible and value creating behaviour with due respect for the surrounding community. However, Topdanmark’s influence should never displace the primary purpose of the stakeholders’ interests to create an attractive profit from investments. 




3. Escalation

As part of the policy for active ownership, Topdanmark has defined how Topdanmark can escalate the active ownership beyond the regular monitoring and dialogue.

If Topdanmark has a share in a company where the company’s operation does not comply with the norms of Topdanmark’s policy for responsible investments, and Topdanmark’s share is regarded profitable, a solution must be sought in accordance with this prioritised sequence: 
 
•    Dialogue with the company to request change in behaviour 

•    In cooperation with other stakeholders, ensure to obtain a similar influence 

•    Divest ownership. 
 




4. Collaboration with other investors

As part of the policy for active ownership, Topdanmark has addressed how Topdanmark collaborates with other investors with the aim of obtaining greater impact.

Particularly in connection with an escalation cf. item 3, Topdanmark collaborates with other investors.




5. Voting policy

As part of the policy for active ownership, Topdanmark has adopted a voting policy.

It is Topdanmark’s policy to vote at the annual general meetings with the objective of promoting value creation, this includes Topdanmark supporting the long-term value creation e.g. by promoting the recommendations on corporate governance in Denmark. At the same time, remuneration of executives should be competitive, and Topdanmark appreciates that standardised incentives are secured for management and shareholders by including both fixed and variable remuneration elements in the remuneration packages. In their Annual Reports, the companies should be as transparent as possible and account for their long-term strategy, remuneration, and the ESG risks and opportunities that affect the long-term value creation. 

When Topdanmark votes at the annual general meetings, Topdanmark will assess both the companies’ management score from ESG analyses and national guidelines on corporate governance. 

Particularly in small Danish companies, the ownership share may in some cases be relatively significant even though Topdanmark does not have a seat on the board of directors. Regardless of the background for the substantial ownership share being company strategy or portfolio investment, it is Topdanmark’s policy that Topdanmark votes at the annual general meetings in order to increase the value creation as well as getting the companies in question acquainted with Topdanmark’s position on the company’s strategy. 

For companies where Topdanmark is not represented on the board of directors, annual reporting includes: 
 
•    Topdanmark’s participation at the company’s annual general meeting 
 
•    How Topdanmark has voted 
 
•    Whether there are unsettled matters between Topdanmark, and the company covered by “Financial Business Act section 78”, or other substantial unsettled business concerns with the company in relation to the size of the company. However, this only applies if it can take place within the scope of the current legislation including the rules against insider trading. 

For foreign companies in which Topdanmark has a position, which according to the stock exchange rules in the home country of the company, that would require the ownership to be flagged in the event that the company is listed on the stock exchange, and in which Topdanmark is not represented on the board of directors, Topdanmark’s board of directors defines the framework for active ownership. 

In order to increase the return of investment of Topdanmark’s shares, these have been made subject to stock lending. Topdanmark’s policy is to maximise the long-term return of investment of the shares and only to recall the loan if it serves the overall purpose.




6. Conflicting interests

Topdanmark’s policy for active ownership includes a description of how conflicting interest in relation to active ownership is managed. 

As mentioned under item 5, annual reporting is made on the companies in which Topdanmark is not represented on the board of directors on whether there are unsettled matters between Topdanmark, and the company covered by “Financial Business Act section 78”, or other substantial unsettled business concerns with the company in relation to the size of the company. However, this only applies if it can take place within the scope of the current legislation including the rules against insider trading. 




7. Reporting

Topdanmark report annually on Topdanmark’s activities within active ownership, including voting. 

As mentioned under item 5, for companies where Topdanmark is not represented on the board of directors, Topdanmark reports on the Topdanmark websites and in the annual Sustainability Report on:
 
•    Topdanmark’s participation at the company’s annual general meeting 

•    How Topdanmark has voted 

•    Whether there are unsettled matters between Topdanmark, and the company covered by “Financial Business Act section 78”, or other substantial unsettled business concerns with the company in relation to the size of the company. However, this only applies if it can take place within the scope of the current legislation including the rules against insider trading. 


For foreign companies in which Topdanmark has a position, which according to the stock exchange rules in the home country of the company, that would require the ownership to be flagged in the event that the company is listed on the stock exchange, and in which Topdanmark is not represented on the board of directors, Topdanmark’s board of directors defines the framework for active ownership. 
 




  • 24.10.2022

    Policy for Active Ownership Topdanmark A/S

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