At a value of £563bn ($880bn) Norway’s state oil fund is a leviathan of sovereign wealth funds, with a reported average shareholding of 1.3% in every listed company in the world.
The minority stakes would seem to indicate little interest in how companies behave, but under the leadership of chief executive Yngve Slyngstad, that is changing, with the fund now beginning to take a more active interest in corporate governance.
Indeed, its activity could be turning it into a leviathan of governance too. A speech from Slyngstad outlines the fund’s intentions: more involvement in governance, closer contact with boards, more involvement in board appointments and transparent voting intentions.
–Yngve Slyngstad, Norges Bank oil fund
Indeed the fund’s big move this year to increase transparency is to publish its voting intentions ahead of ballots—an unprecedented move among shareholders. It won’t just be the voting intention, but justifications will be made public too.
Slyngstad says: “This year the degree of transparency will increase with the disclosure of our voting intentions ahead of the general meeting of shareholders in certain cases. At the same time, we provide a published account of our motivation and the background for voting. It is our view that this strengthens our influence.”
Taking an active role
At a time when many companies sub-contract their voting decisions to proxy advisers, who are themselves often criticised for their behaviour, Norway’s oil fund has seen fit to take matters into its own hands.
In one sense that should come as no surprise. The fund, known as the Government Pension Fund Global (GPFG), is owned by the Norwegian people as a branch of the country’s central bank.
As such its mission is to “safeguard and build the financial wealth that belongs to the Norwegian people”. It therefore places responsible investment at the heart of its work. And an “active role in improving governance standards” is one of the fund’s three guiding principles for investment.
The fund’s stance takes it into highly publicised areas. Earlier this year it voted against the reappointment of Jamie Dimon to the board of JP Morgan because he holds both chief executive and chairman roles (he was re-elected).
The fund’s corporate governance position therefore attracts much attention. A Financial Times leader article suggests the fund was closely watched by other funds for a lead.
“The sheer scale of the fund and the fact of being a SWF may make it somewhat sui generis among investors, but its policies are closely scrutinised and often emulated by asset managers of all sizes,”says the FT. “It can act as a control test for the benefits of having long-term, engaged shareholders rather than the sort that vote only with their feet.”
At the beginning of the year Reuters reported concerns that the fund’s resources may be undermined by proposed structural changes. Among proposed changes is a plan to scrap the council of ethics’ independence.
A government commission has found it may move more quickly if it was brought under the central bank’s control. That possibility has alarmed campaigners, who argue the fund needs a strong and independent body to screen firms and make recommendations.

Reuters added concerns from Steinar Juel, chief economist at Nordea Bank: “The fund has to be able to defend its decisions politically as well as financially. The fund could be undermined if it is perceived to make investments that are politically unacceptable.”
But those remain marginal worries. More important is how the fund will continue to influence governance.
No doubt Slyngstad will continue to use the media as a means of delivering messages. Most recently, in an interview with the Financial Times, Slyngstad asked whether company boards have become overburdened and deflected from their core task of making profits.
The fund’s influence will continue on a formal footing too. If there is any proof of this, it is the statistic that it voted against 16,000 AGM resolutions last year. That’s a lot of opportunities to upset boards, executive and non-executive alike.