[Norway] Wealth fund seeks women for board amid CEO pay concerns

Norway's sovereign $1.4 trillion wealth fund - the world's single largest stock market investor - has announced its intention to increase pressure on the companies it invests in to have a greater number of women board members and reduce excessive executive pay, Reuters reports.

The fund joins an increasing number of investors and policymakers pushing to put more women in company boardrooms. The presence of a broader range of experiences around a boardroom table has been shown to improve decision-making and corporate culture.

The fund reportedly holds stakes in around 9,200 companies globally (equivalent to 1.5 per cent of all listed stocks) and has been a pacesetter for many issues in the field of environmental, social and corporate governance (ESG).

The latest move comes as the fund evaluates its ESG engagement with companies so far this year. On August 16, it published an analysis of its voting record during this year's annual shareholder meeting season - where investors vote on issues including executive pay - for the first time.

The fund has been campaigning to boost the number of women on company boards since 2021 and to consider establishing targets if fewer than 30 per cent of directors are female.

"This year we said (to companies) that 'if you don't have even one woman on the board, we will vote against you'. We will step that up next year," Carine Smith Ihenacho - the fund's chief governance and compliance officer - told Reuters in an interview.

She reportedly said that specific details of how the fund will do so have not been decided. One option could be expanding the fund's focus to more countries. It currently concentrates on the US, Europe and Japan.

"So far, we haven't looked at developing markets," Ms Smith Ihenacho said. "We can (also) step it up in Japan, increase the (minimum) threshold from one to two (women on a board)."

In addition to the push for more women in the boardroom, the fund has put executive pay in the spotlight and now plans to step up the pressure, details of how have yet to be decided.

"We are concerned. The large packages are getting larger, and from the figures we have seen, the larger packages are increasing more than the median of packages, and more than inflation," Ms Smith Ihenacho said.

The fund has voted against 1 in every 10 CEO pay packages, so far in 2023, more than in recent years, including against a growing number in the US, its report showed.

This year the fund analysed the structure of all US pay packages above $20 million for the first time, to see if they aligned with long-term value creation. As a result of this analysis, it voted against more than half of pay packages above this level, according to the report.

The fund reportedly voted against the pay of Coca-Cola's James Quincey, Apple's Tim Cook and PepsiCo's Ramon Laguarta, its voting record showed.

Source: Reuters

(Links and quotes via original reporting) 

Norway's sovereign $1.4 trillion wealth fund - the world's single largest stock market investor - has announced its intention to increase pressure on the companies it invests in to have a greater number of women board members and reduce excessive executive pay, Reuters reports.

The fund joins an increasing number of investors and policymakers pushing to put more women in company boardrooms. The presence of a broader range of experiences around a boardroom table has been shown to improve decision-making and corporate culture.

The fund reportedly holds stakes in around 9,200 companies globally (equivalent to 1.5 per cent of all listed stocks) and has been a pacesetter for many issues in the field of environmental, social and corporate governance (ESG).

The latest move comes as the fund evaluates its ESG engagement with companies so far this year. On August 16, it published an analysis of its voting record during this year's annual shareholder meeting season - where investors vote on issues including executive pay - for the first time.

The fund has been campaigning to boost the number of women on company boards since 2021 and to consider establishing targets if fewer than 30 per cent of directors are female.

"This year we said (to companies) that 'if you don't have even one woman on the board, we will vote against you'. We will step that up next year," Carine Smith Ihenacho - the fund's chief governance and compliance officer - told Reuters in an interview.

She reportedly said that specific details of how the fund will do so have not been decided. One option could be expanding the fund's focus to more countries. It currently concentrates on the US, Europe and Japan.

"So far, we haven't looked at developing markets," Ms Smith Ihenacho said. "We can (also) step it up in Japan, increase the (minimum) threshold from one to two (women on a board)."

In addition to the push for more women in the boardroom, the fund has put executive pay in the spotlight and now plans to step up the pressure, details of how have yet to be decided.

"We are concerned. The large packages are getting larger, and from the figures we have seen, the larger packages are increasing more than the median of packages, and more than inflation," Ms Smith Ihenacho said.

The fund has voted against 1 in every 10 CEO pay packages, so far in 2023, more than in recent years, including against a growing number in the US, its report showed.

This year the fund analysed the structure of all US pay packages above $20 million for the first time, to see if they aligned with long-term value creation. As a result of this analysis, it voted against more than half of pay packages above this level, according to the report.

The fund reportedly voted against the pay of Coca-Cola's James Quincey, Apple's Tim Cook and PepsiCo's Ramon Laguarta, its voting record showed.

Source: Reuters

(Links and quotes via original reporting)