VP Annual General Meeting analysis: Foreign influence is still increasing

The AGM season 2017 is over and as previous years we has gathered data from the Danish AGMs in order to shed light on facts and trends. All players involved in the planning of AGMs are talking about active ownership. What are the cool facts behind the visions and regulatory initiatives to encourage active ownership – are we moving in the desired direction? The quick answer is yes, as foreign investors are continuing to increase their influence in Danish listed companies through proxy votes. On the other hand, voting instructions from Danish investors have stabilised and shareholder activity at the physical AGMs in 2017 was limited.


VP presented the 2017 AGM analysis at a meeting on 21 June 2017 where we also invited Leonhardt Pihl, CEO at Danish Shareholders Association, and Magnus Thorstholm Jensen, head of Investor Relations at Pandora, who discussed AGMs seen from the private investors’ perspective and how to nudge and activate them.

Two significant trends in 2017: More dominating foreign shareholders and digitisation

According to Flemming Merring, Head of VP Investor Service, the data from the 2017 AGM season gives a clear picture of the main trends:

  • Foreign investors are continuing to increase their influence in Danish listed companies and proxy advisors continue to play a significant role for the voting by foreign investors. 
  • Voting instructions from Danish investors have stabilised. 
  • All in all the registered capital at the AGMs has stabilised at around 50 per cent – after a period with a slight increase. 
  • The number of ballots is declining and has fallen to the lowest level since 2014 – reflecting fewer proposals from shareholders and a generally improved economic climate for companies. 
  • 2017 was the year when listed companies seriously began to digitise the AGM process – on the introduction of electronic admission the ratio of these cards issued accounted for 30 per cent of the total number of admission cards issued.

During recent years we have seen a clear trend towards more active ownership – driven by foreign investors wishing to exert their voting rights and supported by regulation and recommendations, including stewardship codes. However, more active ownership does not necessarily mean more debate and activity at the physical AGMs. Actually, the number of proposals from shareholders has decreased during recent years and the debate at the AGMs in 2017 was limited – and focussing primarily on remuneration issues. We believe that political pressure, regulation, including the recently approved Shareholder Rights Directive, and the development in best practice for companies and investors will further support active ownership. Even though foreign investors are still underrepresented at the AGMs we expect the increase in foreign voting instructions to be flattening out, as there is a shift towards passive index funds, due to greater focus on costs. These passive funds do not take account of AGMs, and this will lead to a decrease in the number of voting instructions or at least dampen the increase. Also other structural developments, as for example the macro economic development and the impact on companies’ performance, are expected to play an import role for the development in active ownership”, concludes Flemming Merring.

Read the full AGM analysis here.

At the Danish Shareholder Association, it is a high priority to participate in a large number of AGMs with the aim to promote private investors’ interests and boost debate and activity.

We have a team of 25-30 people dedicated to participating at AGMs and in 2017 we attended 75 AGMs all over the country. Our goal is to foster respect for private investors and to work for more openness and dialogue at the AGMs. Our overall key issues are transparency, the competencies of the Board of Directors, Corporate Governance, remuneration, shareholder democracy and investor friendly reporting. In 2017, we especially focused on guidance, initiatives to reduce operating risks and initiatives to promote private investor attendance at AGMs and to harvest e-mail addresses. With regard to the first and second item, we have seen some improvement, but with regard to the last item, the achievements are unfortunately poor. However, when all is said and done we appreciate our dialogue with the companies and the continuing improvements. Now we look forward to take advantage of the new opportunities for private investors following the implementation of the Shareholder Rights Directive and the EU capital market union”, says Leonhardt Pihl.

Private investors own approximately 7.5 per cent of Pandora’s share capital – owned by about 50,000 shareholders.

At Pandora we take private investors seriously and appreciate their interest in our company. Even though their ownership of the total share capital is relatively low, it is important to us to welcome and treat private investors the same way as the large institutional investors. For example we respond to all enquiries from private investors within the same timeframe as enquiries from institutional investors and we are happy to have an active dialogue with private investors – on e-mail, telephone or at meetings for private investors arranged for example by the Danish Shareholders Association or banks. Additionally, we strive to make our reporting very transparent and our AGM is targeted and tailored to private investors. We plan to continue on this track and to explore upcoming opportunities to further strengthen our relations with and services to private investors”, says Magnus Thorstholm Jensen.

Flemming Merring

Senior Product Manager, Issuance Products

+45 4358 8968
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We want to provide our customers with efficient, reliable and excellent investor services and at the same time, we take pride in finding solutions supporting legal and technical issues related to Issuance.

- Flemming Merring , Senior Product Manager, Issuance Products