World’s largest sovereign wealth fund piles pressure on firms to put more women on boards

Norway’s sovereign wealth fund, which is the world’s largest at over 11 trillion Norwegian kroner ($1.3 trillion), is wielding its energy to push the businesses it invests in to put more women on their boards. 

Norges Bank Investment Management, which manages the fund, set out its place on board variety in a paper launched Monday. 

It stated the businesses it invests in ought to think about setting targets for gender variety the place both gender has lower than 30% illustration on their boards and to report on progress.

Norway’s sovereign wealth fund has a small stake in 9,202 corporations, or round 1.5% of all of the world’s listed corporations, throughout 74 nations. 

NBIM stated that whereas more women had been appointed to boards in latest a long time, on common simply 26% of board members in G-7 nations are feminine, but in Europe, regulatory necessities for women’s illustration range between 30%-40%. 

“While there are many different dimensions to diversity, we are particularly concerned by persistent underrepresentation of women on boards,” NBIM stated in its place paper. 

The fund argued that such underrepresentation may be an indication that boards are recruiting “too narrowly” and it was involved that corporations missing variety would not give you the option to preserve the belief of its prospects, buyers and society more broadly. 

A spokeswoman for Norway’s sovereign wealth fund advised CNBC by way of electronic mail that variety on boards helped to convey “different perspectives to decision-making” and was additionally “increasingly important for the legitimacy of companies.” 

NBIM stated it expects boards to “regularly assess whether it collectively has the right mix of competences and backgrounds.”

Based on its expertise with necessary gender quotas for firm boards, NBIM stated it didn’t imagine that pushing for gender variety would “crowd out” different {qualifications} when candidates.

In 2003, Norway grew to become the primary nation to implement a gender quota, requiring public and bigger personal corporations to improve the proportion of women on their boards to not less than 40%.

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