Principles of Corporate Governance

2018-03-31

Principles of Corporate Governance for Fondita Fund Management Company Ltd.

This text describes principles regarding exercising voting rights in companies held by the funds managed by Fondita Fund Management Company Ltd. Fondita’s board of directors reviews and approves the principles on an annual basis.

CORPORATE GOVERNANCE

Fondita is obligated to ensure that the interests of the funds and fund unit holders are guaranteed in the best possible manner. This refers to the effort to increase the fund’s value in relation to the fund’s investment strategy and risk level. Even though the funds managed by Fondita always are minority owners, Fondita can through corporate governance affect the decisions made in the company.

The corporate governance aims at a long-term increase of the value in the companies owned by the fund. Fondita assumes that the target companies comply with good corporate governance and investment principles. For example, by following the Finnish Securities Market Association’s code for corporate governance. Additionally, emphasis is placed on environmental and social responsibility.

If any of the fund´s target companies’ corporate governance and management is insufficient, Fondita tries to affect the company and/or their management to make a change. In such cases, cooperation with other shareholders may also occur. Fondita may also conclude that it is better for the shareholders to abstain the holding than to affect the company’s proceedings.

FOLLOW-UP OF IMPORTANT EVENTS IN THE COMPANY

The portfolio managers continuously monitor the circumstances affecting the fund companies such as news and stock announcements as well as corporate events such as dividends, subscription rights, share issues, mergers and shareholders’ meetings. 

ANNUAL GENERAL MEETING

Fondita strives to attend the companies’ annual general meetings where the interests of the fund unit holder’s require protection. If necessary, Fondita may also vote by proxy through an agent. Fondita is obligated to use the voting rights in line with the purpose and strategy of the company in question. Each fund votes individually at the annual general meeting.

At the general meetings, Fondita puts special importance to matters related to the interest of the fund unit holders. For example, matters regarding;

  • the companies’ capital structure
  • reward systems
  • appointment and composition of the board
  • ESG-matters
  • transparent impact opportunities and appointment processes

PREVENTION OF CONFLICTS OF INTEREST

If the interests in the funds managed by Fondita differ, the voting rights should always be used for the benefit of each individual fund.

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