With the establishment of the Iceland Enterprise Investment Fund (IEF), the pension funds in Iceland wish to support the restoration of the Icelandic economy and take advantage of available investment opportunities to recover in part the loss of returns resulting from the financial collapse in 2008. Rebuilding business enterprises is a prerequisite for the growth and development of the economy, including the pension funds themselves. The restoration of the stock market is an important element and one of the prerequisites for EIF to realise its gains at the appropriate time.
The EIF’s shareholders’ policy shall be placed before the boards of directors of all companies where the Fund has direct or indirect holdings. The shareholders’ policy consists in the following elements:
EIF’s goals of influence through holdings
1. EIF is a strategic investor, particularly in companies which are prospective candidates for listing in the stock market, and to this end the Fund will seek collaboration with other parties who enjoy trust in Iceland and abroad.
2. The Fund will aim to list its companies in the market, sell them or merge them with other companies. Linking with other stock markets in Iceland and overseas through double listing is a desirable option in order to promote a rational price formation of stocks.
3. EIF will involve itself in the operation of the companies in which the Fund invests through participation in their boards of directors and will normally nominate to the boards either EIF employees or, in exceptional cases, members of the board of EIF.
4. EIF’s representatives on the boards of directors of business enterprises will report regularly to EIF on the operation, performance and prospects of the companies involved, at a minimum every three months.
EIF’s return and profitability targets
5. EIF’s objective is to achieve a favourable overall return for the Fund’s shareholders through dividends, increased market value and eventual divestment of the Fund’s assets. EIF expects the companies in which it invests to work toward these goals. EIF emphasises the need for profitability, growth and stability in its subsidiaries and affiliates, and the principal point of focus of the Fund is shareholder value.
EIF’s goals regarding governance and risk management
6. EIF advocates active risk management in the companies where it is invested so as to promote stability and enhance shareholder value.
7. EIF advocates changing auditors on a regular basis in companies where the Fund has interests.
EIF’s goals of social responsibility
8. EIF board members and employees are conscious of the responsibility that goes with the administration of assets belonging to the Fund’s shareholders, which are publicly owned pension funds. EIF will not participate in any investments which are questionable from the perspective of general ethical rules. The same is expected of the companies in which the EIF invests.
9. EIF will not adopt any political position, nor will it support any organisations with political agendas. EIF will base its business decisions exclusively on business perspectives. The same is expected of the companies in which the EIF invests.
10. In its work EIF emphasise responsible governance and general compliance with rules issued by the Iceland Stock Exchange and the Chamber of Commerce regarding procedural rules for boards of directors, gender equality, disclosure obligations etc. This entails extensive responsibilities, but specific reference is made to the requirement of moderation and prudence in all dealings involving public funds. Receptions, gifts, entertainment allowances and travel costs are sensitive issues in this regard, and EIF calls on all the companies it invests in, directly or indirectly, to pay special attention to these issues.
EIF’s shareholder policy is consistent with the terms, investment strategy, rules of procedure and code of ethics of the company.