Norway’s $1.2tn oil fund will publish its voting intentions five days ahead of 12,000 annual meetings next year in a move likely to make the world’s largest sovereign wealth fund one of the most significant voices on corporate governance.
Nicolai Tangen, the fund’s new chief executive, told the Financial Times it would also tackle companies’ relationships with their auditors and how they choose them, an increasingly contentious topic as shown by the Wirecard fraud in Germany.
Asked if the move to publish about 120,000 voting decisions a year meant the fund was becoming an activist investor, Mr Tangen replied: “No, it just shows we are great believers in transparency.”
He added: “It will make us the leading fund in the world in terms of announcing voting intentions. From the beginning of next year, we will release the votes five days ahead of time so everyone can see how we vote.”
Norway’s oil fund is taking an increasingly active ownership role as its assets swell to such an extent that it now owns, on average, 1.5 per cent of every listed company worldwide.
It has laid out its expectations on everything from what chief executives should be paid and how they should not combine the role with that of chairman to how board directors should be chosen and how companies should report on sustainability.
One issue it has shied away from is gender equality on boards, amid intense debate among government and central bank officials about whether the fund could take a different position to Norway, where a quota law ensures at least 40 per cent of non-executive directors at listed companies are women. The fund had prepared a position on diversity and gender balance but it was not published, its former chief executive Yngve Slyngstad told the Financial Times two years ago.
Mr Tangen declined to comment on the matter. But it is understood the fund could issue its views on diversity next year.
Mr Tangen, founder and former chief executive of London-based hedge fund AKO Capital, had a bruising appointment process to become head of the oil fund. He was forced by Norwegian politicians to transfer his entire holding in the fund with $21bn of assets to a charitable foundation.
The 54-year-old has shown a particular interest for the fund’s work on environmental, social, and governance issues, telling the FT in October that it should sell out of more companies that perform badly in such matters.
He said the fund had done “a phenomenal job” on ESG and had created a technology platform — incorporating data from proxy advisers ISS and Glass Lewis who advise shareholders on how to vote — that would allow it to publish all its voting intentions from January. It chose five days ahead of meetings to allow companies to respond, as well as for ISS and Glass Lewis to issue their own recommendations. “You need to have some kind of platform, otherwise it’s too cumbersome,” Mr Tangen said.
He brushed aside concerns that taking a more vocal stance on ESG issues could lead companies or foreign governments to conclude the fund was a Norwegian foreign policy tool.
“It isn’t,” he said. “It’s a strict commercial and financial institution.”