KONE Corporation

At the KONE Corporation annual general meeting, Folketrygdfondet, manager of the Government Pension Fund Norway, voted against item 13 for the following reasons:

Item 13: Election of members of the Board of Directors

Folketrygdfondet’s decision to vote against the election of the proposed slate of directors is based on a cumulative assessment of the following elements. As a point of departure, Folketrygdfondet places significant weight on the recommendations of the nomination committee. Here, the nomination committee consists entirely of members of the board of directors, and is led by the board chair. Folketrygdfondet takes the view that the independence of the nomination committee enables shareholders to have the necessary confidence in nomination committee proceedings and recommendations. A clear division of roles and responsibilities between the board of directors and the nomination committee is fundamental to the committee’s work. It is inconsistent with the Finnish corporate governance code for the board chair to lead the nomination committee. In addition, the current board chair leads the audit committee, which is also inconsistent with the Finnish corporate governance code. 

The role of the board chair at KONE currently amounts to a full-time position, and is included in the company’s short-term cash-based bonus scheme. Folketrygdfondet notes that the current board chair leads the remuneration committee as well.

The KONE annual meeting agenda does not permit voting on individual candidates to the board, but rather, only as a single slate. This includes reelection of the current board chair. For these reasons, Folketrygdfondet voted against the entire candidate slate under item 13.