Active ownership aims to contribute to the portfolio companies’ strategic development and long-term value creation. Industrivärden’s influence is grounded in sizable ownership stakes, strong positions of trust, representation on nominating committees and boards, and depth of knowledge about the companies and their business environments. Industrivärden strives to help the portfolio companies establish and strengthen leading positions in their respective industries over time. Major emphasis is put on clear leadership, focus and flexibility. Active ownership is exercised mainly through involvement in nominating committee work, board representation and active dialogue with the portfolio companies. In addition, continuous evaluation is conducted of the companies and their boards, CEOs and company managements. The various measures that are considered to create the most value over time are defined in Industrivärden’s action plan, which serves as the foundation of the Company’s influence work.
In its role as active owner, Industrivärden adds value through:
- Engaged ownership through representation on nominating committees and boards, with substantial knowledge and an ability to evaluate, make demands, influence and provide support
- A long-term sustainability perspective with focus on competitive growth in value over time
- Owner collaborations through consensus-building on key issues with other owners
- Resources in the form of financial strength and an extensive network
Continuous evaluation and influence
Industrivärden’s investment and analysis organization continuously evaluates the portfolio companies’ governance, operations and development. Work is conducted from an overarching ownership perspective with focus on the portfolio companies’ boards and management teams, financial development and matters such as strategy, market position, efficiency and capital structure. Analyses are conducted from a broad, business environment perspective and cover everything from customers, competitors and markets to prevailing megatrends such as digitalization, new technology and long-term sustainable development. A keen understanding of these trends is essential for being able to assess the portfolio companies’ long-term value potential as well as the opportunities and challenges they face.
In this way the investment and analysis organization builds a foundation of deep, fact-based knowledge about the respective portfolio companies and their business environments.
With a foundation in this analysis, an action plan for value creation is continuously updated, which summarizes the strategic value drivers that Industrivärden considers to be most important for value creation during the coming three to five years. The aim is to identify and describe various opportunities for value growth and well as strategic measures for realizing this value.
Industrivärden communicates its views of the company and its management primarily with the chairman of the company’s board. An active dialogue is also conducted with the respective companies’ CEOs and other senior executives.
Nominating committee work and board composition
It is of central importance that the portfolio companies’ boards have the combined competence and experience required to manage the respective company’s current situation and long-term ambitions. Industrivärden therefore puts strong emphasis on participating and exercising influence in the portfolio companies’ board nomination processes. With a foundation of extensive knowledge about the portfolio companies and their respective business environments along with a keen understanding of their long-term challenges and opportunities, Industrivärden can contribute to their board nomination work. Industrivärden’s nominating committee representatives consist of board members and members of the Executive Management.
Good access to qualified board members is a key success factor. Against this background, Industrivärden works actively to identify suitable individuals and maintain the Company’s network. Industrivärden invests in companies active in various sectors and with varying needs, which requires a broad network of individuals with various types of expertise and experience.
Nominating committee representatives with ties to Industrivärden
|Portfolio company||Industrivärden's nominating committee representatives||Role|
Board members with ties to Industrivärden
|Portfolio company||Board members with ties to Industrivärden||Role|
|Ericsson||Helena Stjernholm||Vice Chairman|
Industrivärden exercises influence through representation on its portfolio companies’ boards. Industrivärden’s board members and members of the Executive Management who serve as AGM-elected directors for Industrivärden’s portfolio companies are considered to have ties to Industrivärden. They are to have a current and clear picture of the value-creating measures that have been identified in the respective portfolio companies. Against this background, Industrivärden’s action plans for the portfolio companies are discussed on a regular basis within Industrivärden’s board. Where needed, the analysis organization also conducts investigative assignments on specific matters.