In a pioneering approach to governance, the Danish Velliv Association, the commercial pension fund, is demonstrating how pension funds can address broader societal issues. The unique “democratic governance structure” of Velliv allows it to balance financial security for its 400,000 members while also focusing on philanthropic efforts, particularly in the realm of mental health in the workplace. CEO Lars Wallberg highlighted this model at the Sustainability in Practice conference at Oxford University, emphasizing the significance of their approach.
Velliv’s governance structure involves a board of representatives, consisting of 50 individuals elected from the membership, and a board of directors with seven members and two deputies from the association. The board, acting on behalf of the members, has chosen to distribute 80% of profits directly to members and allocate the remaining 20% to philanthropic activities.
Wallberg explained, “We, the owners, keep at arm’s length when it comes to the company’s operations.” The unique profit distribution, where 80% goes to members as an annual cash bonus and 20% is earmarked for philanthropy, sets Velliv apart. Wallberg noted that this approach distinctly contrasts with companies owned by banks, highlighting the tangible benefits for members.
The philanthropic focus on mental health arises partly from the challenge of making mental health “investible.” Wallberg, also chairing two foundations experimenting with investment opportunities related to workplace mental well-being, pointed to the measurement difficulties associated with mental health impact. He acknowledged, “This is a philanthropic activity; we give money, and we don’t get anything in return.” The complexity of measuring impact in the ‘S’ (social) aspect of ESG, especially in mental health, poses significant challenges.
While Denmark is often perceived as one of the happiest countries globally, Wallberg challenged this notion, citing the company’s data. Despite Denmark’s privilege and positive living conditions, mental health challenges persist, particularly among teenagers. Velliv’s pension statistics further indicated that stress, anxiety, and depression are major contributors to individuals leaving the job market temporarily or permanently, accounting for approximately 50% of disability payments.
The symbiotic relationship between Velliv’s pension and philanthropic arms becomes apparent, with the former addressing client-level concerns and the latter contributing to societal well-being. Wallberg stressed the need for increased visibility on mental health issues, acknowledging the gradual shift in attitudes among leaders in demanding sectors. He noted, “Leaders in the very hard-driving sectors, such as financial services, are much more open to the challenges that they have mentally, both as persons and as professionals.” Despite progress, Wallberg emphasized the long road ahead in addressing the stigma associated with mental health struggles in the workplace.
