GAPP Principle 7

The owner should set the objectives of the SWF, appoint the members of its governing body(ies) in accordance with clearly defined procedures, and exercise oversight over the SWF’s operations.

Status: Implemented

The asset owner (Ministry of Finance) has stated the overall investment objectives of the Fund in a management mandate issued to the operational manager (Folketrygdfondet). See response to principle 1 and 6 for further information on the objectives of the GPFN and division of roles and responsibilities in the management of the Fund.

The hierarchy of regulation, supervision and reporting related to the management of the GPFN is outlined in the figure below. Objectives have been set and appropriate supervisory functions established at all levels of the governance hierarchy. The Ministry of Finance’s supervision of the GPFN is regulated according to the Government Pension Fund Act and in the Folketrygdfondet Act and specified in the management mandate issued to Folketrygdfondet. The management of the GPFN is based on a governance structure in which the Norwegian Parliament, the Ministry of Finance, the Board of Folketrygdfondet and administration of Folketrygdfondet hold different roles and responsibilities. The Board consists of seven members appointed by the Ministry.

Important decisions pertaining to the overall level of risk in the GPFN shall be anchored with Parliament. The Ministry of Finance adopts, based on the deliberations of Parliament, a general investment framework and provisions for the execution of the management assignment. The provisions issued by the Ministry are supplemented by more detailed limits and regulations at the various decision-making levels. The governance model implies all in all a highly detailed regulation of the management of the Fund.

Sources: Government Pension Fund Act, Folketrygdfondet Act, GPFN mandate, Ministry of Finance’s and Folketrygdfondet’s websites.