Norway’s sovereign wealth fund wants the companies in which it invests to start living up to explicit gender diversity goals.
The world’s biggest, which oversees about $1.3- trillion from its head office in Oslo, it says the idea is to end “persistent underrepresentation” of women on corporate boards. CEO Nicolai Tangen has made clear he intends to make companies more responsible in a number of areas, including the environment and their role in society.
The fund, set up in the 1990s to invest Norway’s oil and gas revenues abroad, owns about 1.5% of global stocks, spread across about 9,000 companies.
Boards on which women make up less than 30% should consider setting targets for gender diversity, the fund said in a position paper published on Monday. Having fewer women “may indicate that a board is recruiting too narrowly and does not have a clear view of the full range of backgrounds and competences required to be effective”, it said, adding it will require progress reports from companies.
The Group of 20/Organisation for Economic Co-operation and Development Principles of Corporate Governance specifically refer to improving gender diversity on boards as a relevant measure, the fund said. On average 26% of board members are female in the Group of 7 countries, it said, while in Europe, regulatory requirements vary between 30% and 40%.
“While there are many different dimensions to diversity, we are particularly concerned by persistent underrepresentation of women on boards,” the investor said. “Based on our experience from markets with mandatory gender quotas for company boards, we do not believe that gender diversity will crowd out other qualifications.”
The fund said the gender diversity requirement also applies to men.