Gildi's report on the implementation of its shareholder policy for 2024, with priorities for 2025

Gildi has published a report on the implementation of its shareholder policy for 2024, reviewing how the fund has sought to have a positive influence on the priorities and governance of the companies it invests in. The report also outlines how the fund intends to engage during 2025.

Last year's work

Comments on remuneration policies featured prominently in the implementation of Gildi's shareholder policy in 2024. The fund considered that continued rigour was needed regarding clarity and appropriate metrics for performance-related payments. In addition, the fund considers that too few companies prepare a report on the implementation of their remuneration policy.

The fund also engaged on the subject of nomination committees, considering it advisable, among other things, that all members of nomination committees be elected at shareholder meetings and that board members should not sit on such committees unless specifically justified. There continues to be a need for nomination committees to provide adequate justification for the reasons a particular board is selected, rather than merely describing qualification criteria in general terms and the final outcome.

Priorities for 2025

In 2025, Gildi will continue its work to improve corporate governance, focusing on three main areas: remuneration policies, nomination committees, and policies on important environmental and social matters.

Regarding remuneration policies, Gildi believes these should reflect the long-term interests of companies. The need for incentive schemes should be justified, and such schemes should be moderate and include appropriate metrics. Company boards are encouraged to consider a broader range of approaches than share options alone, as the fund considers that large-scale share option schemes are generally not the best way to align the interests of the parties involved. Reports on the implementation of remuneration policy should be published in a timely manner, and shareholders should be informed of any deviations from approved policies.

With regard to nomination committees, the fund believes they should be elected by shareholders and that board members should sit on them only in exceptional cases. Communication between the committees and the largest shareholders could be more open, sound justification should accompany the committees' selections, and ongoing dialogue about their development is needed.

Finally, Gildi emphasises that companies should adopt appropriate policies on matters relating to important environmental and social factors connected with their operations.

The report on the implementation of the shareholder policy is available in full here.