Responsible Investor

Mn Services: The former Dutch politician now engaging with Wal-Mart

RI talks to Kris Douma, who leads the governance of 2000 companies worldwide for Mn Services, the Dutch pension fund manager.

Kris Douma is no stranger to the politics that goes with lobbying some of the world’s biggest and sometimes most controversial companies. Prior to becoming head of responsible investment support and active ownership at Mn Services, the Dutch pension fund manager in April 2007, he stood for four years as a member of parliament for the Dutch Social Democratic Party (PvdA). In that time, he worked on major social and economic reform such as the Tabaksblat code of corporate governance and the European Transparency Directive. Before that, he spent 15 years at FNV Bondgenoten, the largest Dutch trade union.
More recently, Douma was a member of the group of European institutional investors including F&C, the UK fund manager, that called for support for a resolution they placed on the agenda at the June annual general meeting (AGM) of Wal-Mart, the world’s biggest supermarket chain. The investors expressed concern over the company’s apparent intransigence faced with continued bans by some US cities on Wal-Mart type, out-of-town hypermarkets. They also challenged its failure to comply with international labour standards.
Wal-Mart’s poor business reputation, they said, was driving away customers and putting their investments at risk.

It was not the first time Wal-Mart had faced investor ire. In 2006, the Norwegian Government Pension Fund blacklisted the grocer because of child labour violations by its suppliers in the developing world and the obstruction of union representation for US workers. The Norwegian fund sold off more than $400m worth of Wal-Mart shares. At the time, the decision provoked sharp criticism from Benson Whitney, US Ambassador to Norway, who accused the fund of a “national judgment of the ethics of these companies,” and took up the issue with the Norwegian government. Douma says the latest resolution was dropped just days before the Wal-Mart AGM, reflecting a change of attitude at the company: “We are now talking with Wal-Mart on these concerns. They decided that we as shareholders were not something to be scared of and we eventually managed to liaise with their legal department. Sometimes the most difficult barrier in an engagement is talking with the right people.” Subsequently, the investors issued a joint engagement statement with Wal-Mart. Douma says the success of the engagement requires vigilance: “Wal-Mart says it will establish a policy to ensure that certain kinds of labour rights abuses do not happen again. We as investors need to look at implementation and make sure there is no subsequent relapse of the problem.”

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