News that Norway’s $760bn oil fund has set up an advisory governance board will force other sovereign wealth funds to brush up their governance and transparency credentials, say experts.
Last month, the world’s largest sovereign wealth fund set up a three-strong corporate governance advisory board that will give it a bigger voice in the selection of board members of investee companies.
The move will enable the Norwegian fund to advise on ownership issues when companies go through major strategy changes, takeovers or capital restructuring, says Eliot Kalter, senior fellow at the Fletcher School at Tufts University and co-head of the Fletcher Network for Sovereign Wealth and Global Capital.
Creating the board is “commendable and will be followed by others”, he says…
… And more SWFs are expected to emerge and will need help. Mr Kalter says India has been debating whether to launch a SWF, Colombia is in the process of setting one up, and the Israeli cabinet has approved creating one to manage resources from expected large gas exports. In the US, meanwhile, as gas exports surge, Mr Kalter expects to see more states launch SWFs, while a number of countries will probably increase the number of existing vehicles to better target investment strategies.
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