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Written by Gwadis Fouche
OSLO (Reuters) – Norway’s $1.6 trillion sovereign wealth fund, the world’s largest, will call on emerging-market companies in which it invests to put more women on their boards, executives told Reuters. , this policy will be global for the first time.
The fund, one of the world’s largest investors, holds shares in approximately 8,800 companies around the world, and owns approximately 1.5% of all listed stocks. It has pioneered various issues in the environmental, social and governance (ESG) field.
From 2021 onwards, the fund is urging companies to increase the number of women on their boards and consider targets where women have less than 30% of directors, first focusing on Europe and the US, and last year implementing the policy in Japan. It also expanded.
The policy will now also apply to companies in emerging markets such as India, South Africa, Brazil and Egypt, the fund said in updated voting guidelines shared with Reuters ahead of publication on Wednesday.
This means companies such as Qatari telecom company Alldo, Indonesian industrial company Essa and Brazilian logistics company Hydrobias do Brasil, which currently do not have female directors, could be affected.
Promoting the fund could be difficult in countries with fewer candidates than in developed countries, and comes amid signs of public backlash in the United States against moves to bring diversity to the top of organizations. It is being carried out in
Since 2021, the fund has seen “significant improvements” in gender diversity on its board of directors, Chief Governance and Compliance Officer Karine Smith Iheanacho said in an interview, adding that the fund has seen “significant improvements” in gender diversity on its board of directors, as it complies with state regulations and best practice guidelines. He highlighted Europe, where a combination of factors is promoting the appointment of female directors. numbers.
But “we’ve long thought that we need to vote even in countries where this is actually more of an issue,” she said.
“In some developed and emerging markets, we are actually seeing women fall behind.”
In practice, this means that if an emerging market company does not have at least one male and one female director, the fund will be required to elect the chair of the nominating committee or, if there is no nominating committee, the chair of the board. means to vote against. – At the annual general meeting.
In developed markets, funds will still be subject to negative votes if the board does not include at least two male and female directors.
latecomer
The fund’s head of stewardship, Amy Wilson, said the new voting guidelines are expected to affect about 5% of the companies in the fund’s equity portfolio.
“Our voting policy is designed to address the laggards, lift the worst performers and close the gap to our expectations,” Wilson said.
Overall, about 60% of the companies in the fund’s portfolio still have at least 30% gender representation on their boards, he said.
The foundation said it was “pleased” to see progress made on gender diversity at Hollywood film studio Warner Bros. Discovery and pan-European stock exchange Euronext.
The fund voted against both companies because they each had one female director in 2022. Both companies currently have three female directors.
The fund also tightened its policy on South Korea, Singapore and Poland, which had been exempted from gender requirements despite Norwegian investors already classifying the three countries as developed countries.
These countries, like Japan, are required to have at least one male and one female member on their boards of directors, but this is due to the fact that overall progress in gender diversity on boards has been slow and that “senior female This reflects the fact that the pipeline is not mature and the number of female directors is small. ” Wilson said.
Smith-Iheanacho said the fund had not divested from companies so far and had no plans to do so because they did not respect gender diversity requirements.
“I think it’s much better to speak up and be an investor on this issue,” she said.
The Fund’s policies have had some unexpected consequences. In one case, a fund had to vote against the nominating committee chair of a company with no men on its board for two consecutive years.
office? lingerie company Victoria’s Secret.
(Reporting by Gwladys Fouche in Oslo; Editing by Mark Potter)
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