Norges Bank Investment Management, the in-house manager of the world's largest wealth fund, will vote against Credit Suisse Group's risk committee in relation to the Greensill Capital and Archegos Capital Management scandals.
NBIM, which runs the assets of the Government Pension Fund Global, Oslo, said in a notice outlining its voting intentions that it will vote against the re-election of all six members of Credit Suisse’s risk committee — including lead independent director Severin Schwan — at its annual general meeting on April 30.
"We're voting against Credit Suisse’s risk committee due to poor risk management in the Greensill and Archegos cases. This is in line with our public voting guidelines,” a spokeswoman for NBIM said.
The banking group has been in the spotlight in recent months related to two issues. In early March, Credit Suisse was forced to liquidate more than $10 billion in supply chain finance funds — run by its money management unit — due to valuation uncertainties and insurance problems with assets structured and originated by now-collapsed Greensill. The second relates to a 4.4 billion Swiss francs ($4.8 billion) financial hit due to its relationship with family office Archegos, which failed to meet margin commitments in late March — with the bank forecasting a further 600 million francs charge in the second quarter.
NBIM said the rationale for its vote includes that shareholders should have the right to seek changes to the board when it does not act in their best interest. GPFG had 10.91 trillion Norwegian kroner ($1.27 trillion) in assets as of Dec. 31.
“We will consider whether the board has failed to act on material requests from shareholders, sought to circumvent shareholder proposals or implemented governance changes limiting shareholders’ rights without their approval,” the notice said.
Unsatisfactory financial and strategic performance, mismanaged risk-taking, unnacceptable treatment of shareholders or undesired environmental or social outcomes from firm operations will also be taken into consideration when voting on a proposal to vote against re-election of board members. It will also "consider whether any information raises reasonable doubt about the board’s actions," the notice said.
Proxy adviser Glass Lewis also advised shareholders to vote against the re-election of Andreas Gottschling, chairman of the risk committee, while David Herro of Harris Associates has called for changes to be made in the bank’s risk control at every level where there are deficiencies.
“Shareholders would be warranted to also attribute accountability to the board’s risk committee,” Glass Lewis wrote earlier this month, adding that a change in leadership of the risk committee is needed to regain shareholder trust after the recent financial and reputation damage.
Bloomberg contributed to this story.