NORWAY - Norges Bank, the manager of the e114bn Government Petroleum Fund, has laid down revised corporate governance principles for the fund and has also stated expectations for companies in which it invests.
The bank said the principles were based on the overriding guidelines for exercising ownership rights in the Petroleum Fund stipulated by the Ministry of Finance in November. The Ministry had said that Norges Bank should execute ownership in order to protect its long-term financial interests rather than executing ownership rights ‘whenever necessary’.
In a statement, Norges Bank said it will exercise ownership rights and promote good corporate governance by:
* communicating its principles for good corporate governance and related expectations for companies, and * exercising voting rights at companies' general meetings.
Where appropriate, the bank may:
* participate in international networks and organisations to promote good principles for corporate governance to enterprises, regulatory authorities and market places * be in direct contact with individual companies, and * co-operate with other investors to promote or follow up specific measures.
Setting down its expectations from companies, the bank said that the company's primary objective must be to maximise shareholders' long-term returns. There must be a clearly defined business strategy that is anchored in the board of directors. The company must present accurate, adequate and timely information concerning its financial position and other relevant information.
The company's board of directors shall protect the interests of all shareholders and shall be accountable for the decisions made by the board. The board of directors shall supervise the day-to-day management and company activities, and shall ensure a proper organisation of these activities, including adequate internal control systems, said the statement.
To ensure the owners' long-term interests, enterprises must effectively manage relationships with the employees, suppliers and customers, follow a code of ethics and take into account the impact of their activities on their surroundings and the society in general.
The bank will report annually on how ownership rights are exercised and how the bank has promoted good corporate governance on behalf of the Government Petroleum Fund and this report will be available to the public.
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