1. 1 One-Share-One-Vote Experiences from the corporate control market A Pension Fund’s Perspective ECMI / CEPS 07 December 2006 Gerben Everts ABP Investments

2. 2 Overview  Introducing ABP  Institutional Investor Activism  in the Netherlands  in the EU / globally  Support for EU initiatives  Reimbursement of costs of activism?  Conclusion

3. 3 Introducing ABP Pension fund of participants in service of the Dutch government and the educational sector Approx. 2.6 million participants Based on solidarity and not-for-profit ABP invests close to € 203 billion Nominal funding ratio close to 130% Established in 1922, privatized in 1996 The third largest pension fund in the world 2,400 employees (Amsterdam, Heerlen New York, Hong Kong)

4. 4 Introducing ABP

5. 5 Institutional Investor Activism in the NL (1)  Part of a global market for corporate control  Anti-takeover devices in the NL  Preference shares(58%, from 63% in 2001)  Priority shares(16%, from 34%)  Depository receipts(16%, from 20%)  Supermajority requirements(11%, from 20%)  Voting cap( 0%, from 3%)  Golden share( 0%, from 4%)

6. 6 Institutional Investor Activism in the NL (2)  Gradually, breakdown of anti-takeover devices  Main influences:  Corporate Governance Code (Tabaksblat)  Takeover Bids Directive (TOB)  Going concern vs Hostile bid  Room of manoeuvre for the Board  Restrictive implementation of TOB

7. 7 Activism in the EU and globally  An EU shareholder democracy is developing  Bridging different philosophies  Based on firm principles and flexibility  There is no ‘one size fits all’  Shared scepticism on US shareholder model  Position of ABP: full voting list

8. 8 Support for EU initiatives  But we need to keep pace  No status quo  We need:  Proportionality between capital and votes  The breakthrough rule  Applying a step by step approach  Allowing an effective dialogue with shareholders  Possibly redefining the General Meeting of Shareholders

9. 9 Reimbursement of costs of activism?  Short-term thinking basis for current securities valuation  Economic forces that discourage institutional investors from being active  Counterbalance needed:  Registration dividend  Voting dividend  Loyalty dividend

10. 10 Conclusions (1)  We should remain ambitious  Although shareholder democracy might not be perfect  Any alternative is less attractive  Ultimate objective should be better functioning companies and economies  1-s-1-v should be the starting point in all analyses  However, temporary deviations should be allowed  Stimuli might be considered to overcome market imperfections

11. 11 Conclusions (2)  The principles of an EU corporate governance ‘system’ should be:  One Share;  One Vote; and  One long-term perspective to be able to remain competitive and contribute to future growth and prosperity for an ageing population. -o-