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Norway wealth fund CEO to firms: allow independent directors on your boards

Published 02/13/2018, 12:35 PM
© Reuters.  Norway wealth fund CEO to firms: allow independent directors on your boards
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By Gwladys Fouche

OSLO (Reuters) - Norway's $1 trillion sovereign wealth fund plans to be a vocal shareholder during the upcoming AGM season, pushing firms to disclose more non-financial data such as carbon emissions, and allow investors to nominate their own directors.

Greater disclosure on sustainability by the 9,100 companies it invests in will enable the fund to more accurately assess the risk of its investments, its CEO, Yngve Slyngstad, said.

"This is probably, for us, the issue ... where we would like to see the most concrete results in the spring of 2018," Slyngstad told Reuters.

"It is not only climate-related disclosure but also disclosure of what we call non-financial data in general, sustainability data.

"CO2 is very important ... Water-related disclosure (and) the broader spectrum of U.N. Sustainability (Development) Goals is important," Slyngstad said on the sidelines of a news conference.

The fund, which invests the proceeds of Norway's oil and gas production but cannot invest in Norwegian companies, is one of the world's biggest shareholders, with stakes in 1.4 percent of listed companies globally.

In recent years it has become a more active shareholder, trying to use its size to influence companies' attitudes.

Enabling investors to nominate their own directors, is one of its most pressing issues.

As the eighth-largest shareholder in Apple (NASDAQ:AAPL), with a stake worth $7.9 billion, according to Thomson Reuters Eikon data, it voted against a company resolution on proxy access at Apple last year.

"Quite a few of the larger companies have changed their regulations on that, so we expect even the biggest ones, like Apple, to do that as well. It may take some time ... but we will continue," Slyngstad said.

EXERCISING INFLUENCE

In its annual report on responsible investment, released on Tuesday, the fund said that it opposed 6,760 resolutions put forward by companies at annual general meetings last year.

Just over half of them concerned the election of directors, and included opposing combining the roles of CEO and chairman at Facebook (NASDAQ:FB), JPMorgan Chase (NYSE:JPM), Johnson & Johnson (NYSE:JNJ), Bank of America (NYSE:BAC), ExxonMobil (NYSE:XOM), Chevron (NYSE:CVX) and Verizon.

It also voted against directors that it felt had too many commitments at Alphabet (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), Allianz (DE:ALVG) and Wells Fargo (NYSE:WFC).

In a separate document published on Tuesday, the fund set out its view that firms should establish anti-corruption policies to prevent and address corruption, and create channels for whistleblowers to be able to warn of problems anonymously.

"We find that a document is actually necessary for us to have that dialogue ... because otherwise it is going to scratch the surface and not go into any concrete issue," Slyngstad said.

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