Several nice articles appeared recently in the FT on Norges, the world’s largest sovereign wealth fund with $760bn in assets. Sorry, I didn’t save the titles but links to three are here, here and here. Well worth reading at the source.
With assets worth twice Norway’s annual non-oil economic output and after quadrupling in size in eight years, the fund looks to move from largely indexed to a more hands-on approach, such as sitting on Volvo’s director nominations committee. However, FT warns:
Activism is no guarantee of good results: it must itself be exercised responsibly. The fund’s new panel of expert advisers (two of whom have links with this newspaper) is a good sign. It should also not be coy about when it applies pressure on companies. The promise of activism will only be undermined by suspicion about its motives.
FT reported the fund has appointed a corporate governance advisory board consisting of Peter Montagnon, formerly of the Association of British Insurers; John Kay, Financial Times columnist and author; and Tony Watson former chief of Hermes Investment Management and a director at Vodafone, Lloyds Banking Group and Hammerson.
“It will be a sounding board for both long-term ownership matters as well as specific issues,” Yngve Slyngstad, the oil fund’s chief executive, told the Financial Times. “The important thing for us is that we wanted to have sometimes people with a broader, longer, more in-depth experience to complement what we have in the organisation.”
The fund now owns on average about 2.5% of every listed European company and 1.25% of public companies globally. I view them as a very conscientious fund. One area where they have demonstrated leadership is by introducing proxy access proposals in the US with thresholds of 1% held for 1 year, which would provide much greater access than the typical 3% held for 3 year proposals, which several funds have advanced. Three percent would require an enormous amount of coordination and few directors would ever be challenged.
Norges could increase its influence even more by announcing at least some of its proxy votes in advance on ProxyDemocracy.org and participating in the discussions at Sharegate.com. Florida SBA does it. Smaller funds and retail shareowners are learning a lot from Florida’s leadership. I’d love to have Norges join in the dialogue and would love to trade ideas amore frequently bout possible proxy proposals.
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