Adherence of the Government Pension Fund Global (GPFG) to the Santiago principles

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GAPP Principle 8

The governing body(ies) shouldact in the best interests of the SWF, and have a clear mandate and adequate authority and competency to carry out its functions.

Status: Implemented

See also response to principle 7.

The authority of the governing bodies is established through legislation and regulations discussed elsewhere in this document. The management mandate issued by the Ministry of Finance to the Executive Board of Norges Bank seeks to ensure that the asset management assignment is executed in the best interests of the GPFG. The mandate covers the management objective, strategic benchmark indices and corresponding risk limits, responsible investment practices, risk management, costs, and reporting requirements. The management mandate also establishes the division of roles and responsibilities between the asset owner (the Ministry) and the operational manager (Norges Bank).

The Executive Board of Norges Bank has established a separate asset management unit – Norges Bank Investment Management (NBIM) – responsible for the day-to-day execution of the Fund management. The Executive Board has issued supplementary regulations for NBIM, including a Job Description and an Investment Mandate for the CEO of NBIM, Principles for risk management, Principles for responsible investment, Principles for compensation of NBIM employees, and Principles for contributions to research. . The CEO of NBIM is responsible for the day-to-day management of the GPFG. The CEO sets policies and delegates mandates and job descriptions to the leader group of NBIM, which in turn sets further guidelines and delegates work tasks and investment mandates within their delegated areas of responsibility.

The Executive Board of Norges Bank is subject to supervision by the parliamentary appointed Supervisory Council, which also appoints the external auditor of the Bank. The Supervisory Council reports annually to the Norwegian Parliament on its supervision of Norges Bank.

Sources: Government Pension Fund Act, Norges Bank Act, GPFG mandate.