The presentation highlighted three issues:
1. Result of the management of SPN
Since 2010, the Ministry of Finance has regularly reviewed the active management of SPN. Our CEO is satisfied with the client’s feedback after this year’s review.
‘This year, we have been up for examination and received the Ministry’s assessment. It is clear from the report that the Ministry is satisfied with the results achieved and that Folketrygdfondet’s active management performance has been good overall. We don’t expect the competent people at the Ministry to give praise lightly, so I interpret this to mean that we have at least achieved a pass grade,’ said Kjetil Houg.
2. Demanding nomination committee work
Ownership follow-up is a key part of active management, and participation in nomination committees is becoming a frequently used means to this end. The number of nomination committees Folketrygdfondet participates in has increased from 7 in 2017 to 16 in 2022. Houg took the opportunity to highlight a trend in this work. Experience shows that the battle for the best board candidates is becoming increasingly tough.
‘Nomination committees must devote more and more effort to this work, hold more meetings and talk to more people. Both shareholders and authorities make stringent requirements when it comes to time spent, expertise and motivation, there is strong competition for talents from abroad and the unlisted part of the market, and the compensation paid is not always competitive. A well-composed board is a precondition for creating value over time, and it would be a shame if we miss out on talents that could otherwise help boost Norwegian business and industry. We consider this an important responsibility, and I promise that we’ll continue to do our best to help build the boards’ expertise with the resources available to us.’
3. Proposal for new asset management unit in Tromsø
In the report on the Government Pension Fund, Folketrygdfondet was asked to look at potential ways of organising a new asset management unit in Tromsø, with Folketrygdfondet as asset manager. The initiative was first announced in the 2022 report on the Government Pension Fund.
‘In order to succeed with an establishment like that, it is decisive that we find the assignment meaningful and motivating. That means we must be able to manage the unit with a high rate of return and low costs, the same way as for SPN. Given such a framework, I believe we will have good chances of succeeding in establishing a modern, forward-looking management approach that will stand the test of time. We will get back to this in our response in September,’ said Houg.