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norwegian oil fund adopts activist stance

Norges Bank Investment Management, manager of Norway’s 560bn oil fund, has established a corporate governance advisory board of financial specialists


Anthony Watson, a non-executive director at Vodafone (one of the fund’s largest holdings – see table); John Kay, a Financial Times columnist and author of an influential UK review of long-term investing; and Peter Montagnon, a former financial journalist and investment affairs director at the Association of British Insurers, were recruited to support NBIM’s “long-term ownership work”.

Largest equity holdings (30 Jun ’13)
 Company  Country  NOK(m)
Nestlé Switzerland 38,207
Royal Dutch Shell UK 28,601
HSBC Holdings UK 26,547
Novartis Switzerland 25,668
Roche Holding Switzerland 23,550
BlackRock US 20,258
Sanofi France 19,541
Vodafone Group UK 19,376
BP UK 18,293
Exxon Mobil US 18,179

The trio will advise on board appointments, serve as a sounding board on corporate governance, and review NBIM’s corporate governance activities. Activism by NBIM last year included lobbying for greater shareholder influence regarding the nominations of directors at four US companies.

Increased action by NBIM could have a significant impact on the corporate landscape, given that the oil fund reputedly owns about 2.5% of every listed European company.

In second quarter results published last week, NBIM reported that the fund held equities with a market value of NOK 2,785bn (€356bn) at the end of June, equivalent to 63.4% of its total assets.

As Expert Investor Europe reported, other institutional investors have achieved success with activist approaches. Earlier this year, the United Nations-backed Principles for Responsible Investment initiative claimed signatories had helped reduce corruption risk at 16 global companies.