Kingdom of Norway to Implement Proper Corporate Governance in the United States
Rescuing a virgin in dire straits
The development of Norway’s soverign wealth fund, the Government Pension Fund (GPF), has always been interesting. GPF will this year attend 2000 meetings with American companies, in which they own up to 5 percent, urging them to separate the role of CEO and Chairman. They hope to make the governance structure more transparent and independent. Governance structure in many American corporations is arguably quite old fashioned and this should be a welcome nudge in the right direction. It’s hard to argue this to be a bad thing and it could quite possibly increase returns for Norway in the long run. Even a marginal increase would be significant as the stated investment horizion of the fund is infinite, that is until the collapse of the universe or the world financial system, whichever should come first.
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This is certainly a way to make it easier for us to keep profits to ourselves (the owners) rather than handing it out to already overpaid American CEO's. Perhaps, as the Pension Fund grows in size and with it our ownership share in US companies, American CEO salaries will converge to Norwegian (efficient market) levels. Certainly, when CEO's and not owners decide how much the former are worth, we can hardly expect salaries to be anywhere close to those of a free market.
[...] previously endorsed the Norwegian Government Pension Fund’s (GPF) approach to enhancing global corporate [...]
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