World’s largest sovereign wealth fund seeks proxy improvements

The manager of the world's largest sovereign wealth fund wants greater transparency of proxy voting

The manager of the world’s largest sovereign wealth fund has called on US regulators to improve the transparency of the proxy votes that are cast on behalf of investors.

Norges Bank Investment Management – which manages the $990 billion Norway sovereign wealth fund – has written to the US Securities and Exchange Commission to warn that investors are finding it tricky to verify the way proxy companies have voted.

“It can be difficult for investors to obtain confirmation that resolutions have been voted on in line with their instructions,” explained NBIM representatives Carine Smith Ihenacho and Séverine Neervoort in a letter, published on Monday.

“This prevents investors from verifying that intermediaries have respected their direction and that the company has taken their vote into account.”

In their jointly penned letter, Ihenacho, the company’s chief corporate governance officer and Neervoort, a senior analyst, request that a new compulsory requirement be introduced to ensure that transparency of voting is enhanced.

“We respectfully submit that introducing a mandatory requirement for all intermediaries to transmit the necessary information throughout the voting chain, to provide transparency to shareholders on how their votes have been cast, would help address this issue,” they said.

“In recent years, new technological solutions have emerged which could improve the efficiency and accuracy of the voting process and the transmission of information between issuers and investors.”

Norway’s sovereign wealth fund invests around $250 billion in US equities, according to Reuters data. In a separate report by the Financial Times, it was reported that the fund owns, on average, 1.4% of every listed company in the world.