GAPP Principle 6
The governance framework for the SWF should be sound and establish a clear and effective division of roles and responsibilities in order to facilitate accountability and operational independence in the management of the SWF to pursue its objectives.
Status: Implemented
The Norwegian parliament has laid down the regulatory framework for the GPFG in the Government Pension Fund Act. The Ministry of Finance holds the overall responsibility for the management of the Fund and acts as the asset owner. The Ministry’s instructions to the manager on the management is gathered in a management mandate to Norges Bank. The management mandate stipulates that Norges Bank shall make investment decisions and exercise ownership rights independently of the Ministry.
The Executive Board of Norges Bank is responsible for the asset management operations within the Bank. One of the two Deputy Governors has a particular function in the board’s management of the Fund. The Executive Board shall appoint a general manager of Norges Bank’s management of the GPFG. The general manager is responsible for the day-to-day management of Norges Bank’s management of the Fund and shall adhere to guidelines and instructions from the Executive Board. Day-to-day management shall not include matters that are of an unusual nature or major importance in the context of Norges Bank’s management of the Government Pension Fund Global. The Executive Board has issued supplementary governing documents for the management of the GPFG.
The Ministry of Finance has also issued Guidelines for Observation and Exclusion of companies from the GPFG. These ethically motivated guidelines are in place to reduce the risk of the Fund being invested in companies deemed in serious violation of fundamental ethical norms. The guidelines specify the process for observation, exclusion or re-inclusion of individual companies. Norges Bank receives recommendations on the exclusion, observation or re-inclusion of companies from an independent Council on Ethics established by the Ministry. The final decision rests with the Executive Board of Norges Bank.
Sources: Government Pension Fund Act, GPFG mandate, Guidelines for Observation and Exclusion, Ministry ofFinance’s and Norges Bank’s websites.