Corporate Governance
Good Corporate Governance creates value
The purpose of AP2’s corporate governance work is to create value and reduce risks in the portfolio. Our starting point is that well-managed companies with good corporate governance are better positioned to generate returns and manage risks.
The Path to Good Corporate Governance
AP2’s overall corporate governance goal is to contribute to a better return in the portfolio, and the Fund therefore acts actively by voting on relevant issues in all listed companies.
AP2’s focus within Corporate Governance
AP2’s work on corporate governance primarily focuses on companies and areas where the Fund considers that it has the greatest opportunity to influence and contribute positively, and which are of the greatest long-term financial importance to the portfolio. AP2 promotes good corporate governance by collaborating with other shareholders on matters of principle and by actively contributing to the development of policies, regulations and standards.
Our View on Key Corporate Governance Topics
We provide transparent disclosure of our positioning on different matters in our Stewardship Policy and Voting Guidelines, which clearly set out our view and intended voting approach.
Every company should have an effective board that acts in the long-term interests of the company. Both shareholders and the board share responsibility for ensuring that appropriate conditions and effective governance practices are in place to support board performances.
The primary purpose of long-term share-based incentive programmes should be to ensure that the financial interests of senior executives are aligned with those of shareholders.
Board Composition and Elections
AP2 votes:
- Against the election of a proposed Chair of the Board if the individual is also, or has previously been, the Chief Executive Officer of the company.
- Against the election of board members to boards that do not include representatives of both genders.
- Against the re-election of some or all members of the nomination committee at global companies where adequate progress on diversity has not been achieved.
- Against the election of a board member who is considered to hold an excessive number of other directorships, taking into account the complexity of those companies and the time commitment required.
- Against the re-election of board members who attended less than 75 per cent of board meetings during the previous year, unless a specific reason has been disclosed.
Executive Remuneration Programmes
AP2 votes:
- Yes, if there is a clear link between performance
requirements and remuneration. - No, if the total cost of the programme is deemed to
be unreasonable. - No, to programmes with free allocation of shares and
options without a link to performance, or where the
allocation is not considered to be moderate. - No, if the programme supports an unreasonably large
payment on "change of control".
AP2 regards representation on nomination committees as an important opportunity to exercise active ownership.
AP2 emphasises the importance of the Board of Directors being an effective and well-functioning body and believes that this, among other things, requires diversity. Diversity is therefore a key focus area when the Fund participates in nomination committee work.
Engagement with other investors
AP2 engages in dialogue together with other investors, including through the Council on Ethics and the Asian Corporate Governance Association (ACGA), as well as through direct engagement with selected portfolio companies.
The Fund also collaborates with other investors to influence regulatory developments in corporate governance. Such collaboration is increasingly important in order to drive change and enhance long-term shareholder value.
Diversity as part of good Corporate Governance
AP2 considers diversity on boards and executive management teams to be an important aspect of good corporate governance and relevant to value creation, which is also reflected in the Fund’s goal for this focus area. AP2 publishes Kvinnoindex annually, which measures diversity on the boards and executive management teams of Swedish listed companies. Since the index was introduced in 2003, the proportion of women on company boards has increased steadily, from 6.1 per cent in 2002 to 35,8 per cent in 2026.
Reporting on Corporate Governance
AP2 reports on its corporate governance activities in its Annual Report, Sustainability Report and on this website.