Norway’s oil wealth fund makes push for more women on boards

Norway's sovereign wealth fund, one of the world's biggest investors, wants to see more diversity, especially gender equality, on the boards of the companies in which it invests, a document published Monday showed.

Norway’s oil wealth fund makes push for more women on boards
Photo: Andreas Dress on Unsplash

“The board (of a company) should have a diversity of competences and backgrounds,” read a new policy document from the fund, the world’s biggest with more than $1.3 trillion in assets.

“Boards where either gender has less than 30 percent representation should consider setting targets for gender diversity and report on progress,” it said.

The policy document also reviewed the arguments for and against diversity.

On the one hand, diversity enriches the decision-making process with a variety of points of view, it illustrates the quality of the recruiting process which is not limited to a small circle, and it increases the legitimacy of decision-makers, the document states.

On the other hand, the effects of diversity on financial earnings are not yet documented in serious academic studies, it can complicate recruiting by eclipsing other competences, and the process of feminisation is already ongoing without the involvement of shareholders, it says.

The fund’s management concluded that “diversity will likely bring additional perspectives and approaches to the board’s discussions and ultimately improve the quality of its decision-making process.”

“While there are many different dimensions to diversity, we are particularly concerned by persistent under-representation of women on boards,” it added.

With holdings in some 9,200 companies, the fund — on Monday valued at 11.14 trillion kroner ($1.32 trillion, 1.09 trillion euros) — controls the equivalent of 1.5 percent of the world’s market capitalisation.

Its decisions are closely watched by other investors and are therefore highly influential.

Several countries, including Norway, France, Germany and the Netherlands, have imposed quotas to ensure that more women are represented on boards of directors.

Yet gender equality remains far-off: the share of women on the boards of the 30 biggest companies is just 12.8 percent in Germany, 28.6 percent in the US, 24.9 percent in Sweden, 24.5 percent in Britain and 22.2 percent in France, according to the Allbright Foundation.

READ ALSO: Norway economy shrinks 2.5 percent in 2020 despite pandemic

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NGOs take Norway to European Court over Arctic oil exploration

Two NGOs and six young climate activists have decided to take Norway to the European Court of Human Rights (ECHR) to demand the cancellation of oil permits in the Arctic, Greenpeace announced on Tuesday.

NGOs take Norway to European Court over Arctic oil exploration
Northern Norway. Photo by Vidar Nordli-Mathisen on Unsplash.

It’s the latest turn in a legal tussle between environmental organisations Greenpeace and Young Friends of the Earth Norway on one side and the Norwegian state on the other.

The organisations are demanding the government cancel 10 oil exploration licenses in the Barents Sea awarded in 2016, arguing it was unconstitutional.

Referring to the Paris Agreement, which seeks to limit global warming to less than two degrees Celsius above pre-industrial levels, the organisations claim that the oil licenses violated article 112 of Norway’s constitution, guaranteeing everyone the right to a healthy environment.”

The six activists, alongside Greenpeace Nordic and Young Friends of the Earth Norway, hope that the European Court of Human Rights will hear their case and find that Norway’s oil expansion is in breach of human rights,” Greenpeace said in a statement.

In December, Norway’s Supreme Court rejected the claim brought by the organisations, their third successive legal defeat.

READ MORE: Norway sees oil in its future despite IEA’s warnings 

While most of the judges on the court agreed that article 112 could be invoked if the state failed to meet its climate and environmental obligations– they did not think it was applicable in this case.

The court also held that the granting of oil permits was not contrary to the European Convention on Human Rights, in part because they did not represent “a real and immediate risk” to life and physical integrity.

“The young activists and the environmental organisations argue that this judgment was flawed, as it discounted the significance of their environmental constitutional rights and did not take into account an accurate assessment of the consequences of climate change for the coming generations,” Greenpeace said.

On Friday, the Norwegian government unveiled a white paper on the country’s energy future, which still includes oil exploration despite a warning from the International Energy Agency (IEA).

The IEA recently warned that all future fossil fuel projects must be scrapped if the world is to reach net-zero carbon emissions by 2050.

The Norwegian case is an example of a global trend in which climate activists are increasingly turning to courts to pursue their agenda.