The world’s largest sovereign wealth fund is aiming by 2022 to release all its voting intentions ahead of the annual meetings of the 9,000 companies it owns in a move that will shake up how investors approach corporate governance.
Norway’s $1.1tn oil fund currently reveals how it has voted within 24 hours of annual meetings but since 2015 has disclosed a handful of times a year before the shareholder votes.
In its new strategy document for 2020-22 unveiled on Tuesday, Norges Bank Investment Management — which manages the oil fund — said that by the end of that period “we aim to publish all our voting instructions ahead of shareholder meetings where this is practicable”.
The Norwegian fund is one of the world’s biggest investors, owning the equivalent of 1.4 per cent of every listed company in the world and having stakes in more than 9,000 groups in total.
It has sought to become a more active investor, becoming involved in issues such as executive pay, climate change disclosure, and board composition including trying to stop chief executives becoming chairman of companies.
The oil fund has voted against some of the biggest companies in the world this year, including Apple, Alphabet, Goldman Sachs and JPMorgan.
Yngve Slyngstad, the fund’s chief executive, told the Financial Times in 2017 that pre-disclosing its voting intentions a couple of times a year had been “more effective than we thought” in changing corporate behaviour. He added that it was “a sharp tool, not a blunt tool” and needed to be used carefully as companies were often compromised under the mere threat that it might disclose its voting intention early.
The oil fund’s investment mandate is decided by the Norwegian parliament and it currently aims to hold 70 per cent in equities, 5 per cent in property, and the rest in bonds.
The new strategy fleshes out the fund’s impending move into renewable energy infrastructure, saying that it expects such assets — primarily wind and solar farms — to account for about 1 per cent, or $11bn currently.
For the first time since its inception in 1996, the fund is expected to reduce its number of employees. By 2022, it should have 500 workers, 100 fewer than today, as a result of natural attrition in some posts and the moving of some functions such as communications and human resources to Norges Bank, Norway’s central bank.
The oil fund said it would consider investing more in unlisted companies looking to float on the stock market despite deep controversy in Norway over its one such investment so far before the aborted initial public offering of the company behind Formula One motor racing.
It also said it would “increase our active positioning around corporate actions and capital market events such as initial public offerings and secondary offerings”.
It repeated its warning that the Norwegian public should be prepared for “significant fluctuations” in the value of the fund due to its increasing exposure to equities.