Norway's US$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.
"We may phrase it politely, but it is pretty clear what we think," Chief Executive Nicolai Tangen said in an interview. "It could also be a red flag, that a company does not have a good process to recruit the best director." 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.
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. 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.