Exclusive: Norway wealth fund tells firms: put more women on your boards

Exclusive: Norway wealth fund tells firms: put more women on your boards

Norway’s $1.3 trillion sovereign wealth fund, the world’s largest, wants the companies it invests in globally to boost the number of women on their boards and to consider setting targets if fewer than 30% of their directors are female, top fund officials told Reuters.

One of the world’s largest investors, the fund holds stakes in around 9,200 companies worldwide, owning 1.5% of all listed stocks. It has set the pace on a host of issues in the environmental, social and corporate governance (ESG) field.

Boards where either gender has less than 30% representation should consider setting targets for gender diversity and report on progress, the fund said in a position paper shared with Reuters ahead of its publication later on Monday.

“We may phrase it politely, but it is pretty clear what we think,” Chief Executive Nicolai Tangen said in an interview.

“What we want to see is better representation of women on the boards,” added Carine Smith Ihenacho, the fund’s chief governance and compliance officer.

“Diversity is good for the board because it brings better perspective, it is better for decision-making and increasingly important for the legitimacy of companies,” said Smith Ihenacho.

“It (a lack of female representation) could also be a red flag, that a company does not have a good process to recruit the best director.”

Most other big institutional investors have a general request for boards to be diverse, and some are increasingly prepared to oppose boards they consider are not diverse enough, but they typically have not set precise targets for female representation.


In 2003 Norway became the first country in the world to impose a gender quota, requiring nearly 500 firms, including 175 firms listed on the Oslo bourse, to raise the proportion of women on their boards to 40%.

Some other countries have followed along similar lines, such as Britain, which is aiming for 33% representation on FTSE 350 boards.

Starting with the upcoming AGM season, the Norwegian fund will apply pressure by voting against appointments to the nomination committees of companies that do not have at least two women on the board.

“We will start with developed markets and at companies where women are underrepresented, at large and mid cap companies in the U.S. and Europe,” said Smith Ihenacho.

She did not name names, but candidates for attention this year may include British carmaker Aston Martin and used car online auction firm Copart in the United States, which have one woman, respectively, on their boards.

The fund will refrain from voting against if companies can have a “very good explanation, like a clear plan, with clear targets, or because of a recent resignation that affected the gender balance on this board”, said Smith Ihenacho.

Last year the fund voted against the nomination committees of 16 companies, all large and mid cap companies in the United States and Europe, because they had all-male boards, she said. One of them was London-listed Domino’s Pizza, fund data showed. The firm has since then appointed two women to its board.

Dialogue with companies and voting at AGMs is the focus of the policy, she added, rather than divesting from companies that do not comply with the policy.

Still, the fund can, and does, divest from companies that do not comply with its positions on ESG issues it prioritises: last year, it divested from seven companies over tax transparency.

The fund only has a specific target on gender diversity currently and not on other aspects such as age or ethnicity, for example, because the latter can vary in relevance from sector to sector or from country to country, said Smith Ihenacho.

“But what is relevant for all countries is that women in general are underrepresented and that is why we have a target (on gender),” said Smith Ihenacho.

Globally, 17% of company boards do not have a single woman, she said.

“We really think diversity creates better thinking and better creativity and better business, really,” said Tangen.

“The more diverse the group of people who sit together, the more creative solutions you get and so the better business. You get better innovations, better solutions. It is just good.”

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