Enhancing Engagement: Eumedion Urges Investors to Pare Back Portfolios
July 8, 2025
Eumedion has recommended that its institutional investor members reduce the number of companies in their equity portfolios to improve engagement with investee firms.
The Dutch corporate governance-focused organisation released a position paper last week entitled ‘Recalibration of the stakeholder model and the role of Dutch institutional investors’. The paper called on institutional investors to “act as true stewards of their investee companies and to genuinely understand those companies” and included recommendations to achieve this.
The core recommendation made for Eumedion’s asset owner and asset manager members to enhance stewardship at Dutch listed companies was to focus its equity portfolio to improve engagement efforts with and knowledge of investee companies.
The position paper recommended that Eumedion members strengthen stewardship with respect to investee companies by ensuring that there is “sufficient knowledge, seniority, experience and capacity to thoroughly analyse the strategy, policy and value-creating capacity of the investee companies and be a genuine discussion partner for the executive and non-executive (supervisory) board and embed this on the management level of the organisation”.
The organisation added that a more focused and concentrated, yet “sufficiently diversified”, equity portfolio will allow investors to have greater impact and achieve a better long-term risk-return profile the organisation stated.
Eumedion additionally recommended that investors collaborate with fellow institutional shareholders where possible.
“The core purpose when we started this whole exercise was to have better engagement between institutional investors and listed companies,” Rients Abma, Executive Director at Eumedion, told Minerva Analytics. “Institutional investors should act as true stewards [and] the core element of true stewardship is that you know your investee companies beyond the shareholders meeting one a year. There should be continuous dialogue between the institutional investors and the listed company.”
He added that “truly acting as a steward” requires “knowing your investee companies, what the strategy and business model of the company is, what the key risks and opportunities facing that company are and what its specific governance structure is”.
“That automatically implies that you cannot have 4000 or 5000 companies in your equity portfolio,” said Abma. “An overly-diversified equity portfolio does not fit with this, and this position argues for more focus and concentration in the portfolio.”
The organisation additionally made a separate recommendation on the diversity of equity portfolios specifically for asset owners. This recommendation read: “Diversification plays a crucial role in the construction of an equity portfolio. However, asset owners are also expected to act as stewards of their investee companies and to truly understand these companies. An over-diversified equity portfolio does not fit in with this.”
Abma also noted that reducing the number of companies within equity portfolios could make shareholders’ voting activity more informed. He suggested that by having investments in fewer companies institutional investors can improve their understanding of voting recommendations. He added that having a more concentrated and focused portfolio could enable shareholders to better judge the recommendations in light of their own voting policy and objectives for their specific investee companies.
Eumedion argues that asset owners should “clearly communicate” their stewardship policy to the asset managers or service providers used or choose a voting and engagement policy that “aligns well with the own stewardship policy and monitor compliance”.
Eumedion represents the interests of institutional investors in the field of corporate governance and sustainability that hold shares in Dutch listed companies. The organisation has 47 ordinary members and three associate members, comprising both Dutch institutional investors and non-Dutch shareholders with stakes in Dutch listed companies.
Its Dutch members include Achmea Investment Management, Aegon Investment Management, Van Lanschot Kempen Investment Management, PGGM, PME pensioenfonds and Robeco.
Eumedion also counts France’s BNP Paribas, the UK’s Railpen and Schroders Investment Management and the US’ BlackRock and Goldman Sachs Asset Management among its non-Dutch members.
According to Abma, Eumedion’s members have more than €10 trillion (U$11.7 trillion) in AUM and collectively hold between 20-25% of all shares in Dutch listed companies.
“Eumedion members are true believers that better corporate governance and sustainability policies from investee companies will lead to a better return risk profile,” said Abma. “Engagement and informed voting are key in fulfilling that specific objective.”
Eumedion noted that a “cooperative attitude” from both executive and supervisory directors of the company is essential and that they should be “prepared to enter into a constructive dialogue with institutional investors”.
The organisation also made recommendations for Dutch listed companies and policymakers to help promote enhanced stewardship. For companies, this included being “open to suggestions” made by institutional investors during the dialogues between the two parties.
Meanwhile, Eumedion urged the Dutch legislator to “ensure that the executive board is accountable for the company’s sustainability policy pursued through an annual AGM vote on the Corporate Sustainability Reporting Directive sustainability report”.
Going forward, Eumedion will engage with its institutional investor members, listed companies and policymakers to put the other recommendations into practice. The organisation also intends to hold discussions with the Dutch Corporate Governance Code Monitoring Committee to eventually include the recommendations into the Code.
The Dutch Corporate Governance Code the core principles of the Dutch Stewardship Code in 2022, meaning both corporate governance and stewardship principles are contained within a single document and underlining the connection between the two. Eumedion is one of the seven supporting organisations of the Dutch corporate governance code.
Eumedion played a key role in the creation of the Dutch stewardship code, with Minerva Analytics reporting in 2017 that the organisation had led pension funds, insurers and asset managers in drafting the code which was adopted in 2018 and the key aspects of which were subsumed into the corporate governance code.
“We believe here in the Netherlands that corporate governance and stewardship are equally important and are not only important for institutional investors but also for companies,” said Abma. “Institutional investors have a specific responsibilities vis-a-vis listed companies and that is better underlined in my view if you have one code instead of two separate codes like in the UK.”
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Last Updated: 8 July 2025