Professor John Kay and ex-Hermes CEO Watson join new Norwegian fund governance panel

Signal of greater active ownership from giant investor

Norges Bank Investment Management (NBIM), the arm of the Norwegian central bank which manages the assets of the giant NOK4.4trn (€563bn) Government Pension Fund, has named Professor John Kay and former Hermes Pension Management CEO Tony Watson to a new Corporate Governance Advisory Board.

Kay is the noted economist and Financial Times columnist who is the author of an influential report on equity markets and short-termism commissioned by the UK government.
Watson, who previously sat on a Norges investment advisory board from 2009-2011, is on the board of mobile telecoms firm Vodafone and is a non-executive director of Lloyds Banking Group. He chaired the Marks & Spencer Pension Trust from 2005-2010.
NBIM has also tapped Peter Montagnon, the former FT journalist who is Senior Investment Advisor at the UK’s Financial Reporting Council watchdog, for the panel. Norges said the panel, set up in the second quarter, will “provide important support” for NBIM’s long-term ownership work.

“As an active owner, NBIM aims to contribute to good corporate governance and high standards of social and environmental performance at the companies the fund invests in.”“Our ownership strategies will support the management of the fund and safeguard the growing value for future generations”, says NBIM Chief Executive Yngve Slyngstad.

The trio has “diverse expertise spanning board leadership, financial economics, company engagement and standard setting”.

One issue the new advisory body will likely grapple with is its stance on ‘stewardship codes’, which fund representatives in the past have had misgivings about. Indeed, Montagnon’s role at the FRC is to promote the UK code, which NBIM has not yet signed.

Earlier this year a separate top-level panel was appointed to review the fund’s responsible investment practices.

The five-strong body, the Strategy Council 2013, is led by Elroy Dimson of the London Business School and Cambridge Judge Business School.

Members include Idar Kreutzer, the former CEO at Storebrand, Rob Lake, the ex-Director of Responsible Investment at the PRI, Hege Sjo, senior advisor at Hermes Fund Managers, and Laura Starks, professor at the University of Texas who is a also a trustee at TIAACREF. Link