Norges Bank pushes four companies for independent chairs

Norges Bank Investment Management (NBIM), the investment arm of the Norwegian central bank and asset manager for the Norwegian Government Pension Fund and the Government Petroleum Insurance Fund managing over NOK1,000bn (£107bn) in equity investments, has filed shareholder proposals at four US companies calling for independent chairmanship.

Meetings at Harris Corporation (23rd OCtober), Parker Hannifin (28th October), Cardinal Health (4th November) and Clorox Company (18th November) will all see the NBIM resolutions voted upon. NBIM, member of the ICGN, UN PRI signatory and an established leader in global ESG engagement, has for some time been open about the possibility of using shareholder proposals as a means of fostering better corporate governance practices as a considered part of a wider engagement strategy.

Board and director independence has formed a key part of NBIM engagement work on governance with companies in recent years, and it will be expected that these four resolutions will further harness their momentum.

In 2006, NBIM made it clear that the use of shareholder proposals is likely, “especially in the US market, where the use of these proposals is most common”(NBIM Annual Report, 2006). These proposals therefore come as little surprise, especially given that “it is particularly in areas prioritised by Norges Bank for its corporate governance work … that we may see concrete shareholder proposals from NBIM in the years ahead. But efforts to bring about important changes will rarely be served by starting out with a shareholder proposal, or by filing a shareholder proposal without the company seeing the bigger picture of which the investor’s proposal is part” (op. cit.).

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