Investment stewardship of institutional investors in Iceland

Abstract

A significant change in ownership of listed Icelandic companies has taken place over the past decade or so. The majority of the ownership is in the hands of institutional investors, such as pension funds. Icelandic institutional investors have generally not been active stewards of the companies they own. Investment stewardship is the process where investors try to influence the companies in which they are shareholders, to improve corporate governance of those companies and their performance.The thesis aims to improve understanding of how Icelandic institutional investors interact with companies in which they are shareholders and use their ownership to influence those companies. The main findings are that investment stewardship by Icelandic institutional shareholders happens behind the scenes with meetings and communication between institutional investors and the listed companies they invest in. It does also happen with public dissent of shareholder proposals or by voting against management proposals at shareholder meetings of listed companies. These findings are in line with how investment stewardship is in neighbouring countries, with the exception that transparency is a more meaningful part of the stewardship in those countries than in Iceland.