Sustainability and Corporate Governance Report 202
0 1
HANDELSBANKEN FONDER – IN-DEPTH REPORT by these n
omination committees, the proportion of women increased from an average of 35 per cent in 2019 to 36.6 per cent in 2020. We will continue to push for more gender-balanced boards in our nomination committee work throughout 2021. With a greater ownership in Swedish companies after the takeover of funds from Xact Kapitalförvaltning to Handelsbanken Fonder, we qualified for nearly 50 nomination committees for 2021. Handelsbanken Fonder appointed women to 71 per cent of the nomination committees in which it participated during 2020. We believe this enables us to push more for gender-balanced boards, yet we are well aware of the enormity of the task. Corporate governance Nomination committees Percentage of nomination committee seats filled by women AGMs1 2020 41 71% 647 2019 34 65% 473 2018 36 63% 382 1 On 1 April 2020, the funds previously managed by Xact Kapitalförvaltning were incorporated into Handelsbanken Fonder AB. Other corporate governance topics Incentive schemes More and more, companies are setting up share-based incentive schemes for senior executives. Generally speaking, we are in favour of management having the same incentives as other shareholders. However, it is important for the schemes to be transparent both in terms of target achievement and remuneration levels. We have seen a great need, together with other institutional owners, to demand transparency around the design of these schemes. Together with the Institutional Owners Association (IÄF), Handelsbanken Fonder has prepared guidelines on how these schemes should be presented. Clear goals, transparency around design and outcomes, and other outstanding schemes and remuneration are part of the requirements. We receive many requests from the companies about these schemes before they are to be presented at the AGM and conduct in-depth dialogues. Ahead of the 2020 AGM, we had 19 dialogues on the subject. In addition, we analysed some 50 other pre-voting schemes. Disputes and settlements It happens that companies in which we invest commit different types of violations. These can involve violations of marketplace rules and corruption, for example. The crimes can lead to litigation against the company, often in the form of class action lawsuits. Such a process often leads to a settlement and compensation to shareholders for incurred losses. Settlements can also require changes to the comIn 2020, Handelsbanken Fonder, together with three US pension foundations, was appointed as the lead plaintiff for a class action against the US bank Wells Fargo. The lawsuit alleges that Wells Fargo has, over an extended period, assured the market that it had addressed deficiencies in its internal governance and control for which US regulators had sanctioned the bank and for which the authorities demanded detailed action plans. At the same time, Wells Fargo has not at all taken the steps required by regulators. When these circumstances became public, its share price was significantly negatively affected. Two of the Handelsbanken Fonder's index funds have suffered damage. A decision in the proceedings is expected in 2021 at the earliest. Our approach to small, newly listed companies Through our Small Cap funds we often become major owners in relatively small companies, usually in Sweden. We participate in new IPOs and invest in newly listed companies. These companies often have a lower degree of corporate governance ability, and here we can make a difference. Through dialogue with the companies, we can help them to set up a nomination committee that can identify suitable board candidates. pany’s corporate governance, such as board changes or requirements for new or amended internal rules or controls. In order for Handelsbanken Fonder to safeguard the rights of the funds in the event of a class action and other similar processes, the company engages two outside law firms that supervise the companies’ behaviours and upcoming proceedings. In 2020, our funds received USD 879,456 in settlements as a result of class actions in the United States. The amount was from thirteen different settlements and went to nine of our funds. Class action settlements YEAR 2017 2018 2019 2020 Total compensation in USD 48,559 18,717 3,760,000 879,456 Number of settlements 2 4 8 13 62 Information about risk Past performance does not predict future returns. The value of the money invested in the fund can increase or decrease and there is no guarantee that all of your invested capital can be redeemed. The fund’s prospectus (“Informations broschyr”), fund rules and KIID are available at handelsbanken.se/funds.