Norwegian Pension Fund welcomes Chinese corporate governance standards

Norges Bank Investment Management, the manager of the $ 1.36 trillion Norwegian Government Pension Fund Global (GPFG), is welcoming China Securities Regulatory Commission’s proposal to enhance transparency and strengthen shareholder protection in China, the fund said in a recent statement.

Pension & Investment reports that the China Securities Regulatory Commission (CSRC) proposal included that Chinese companies should publish more details regarding how the board and its committees perform their duties in annual and semi-annual reports. CSRC also proposed that Chinese companies should publish details of board members, meeting dates, and agendas as well as any major proposals made during these meetings. CSRC also proposed that companies should disclose changes made to the structure of issued shares including the introduction of dual-class shares and changes in share class, over the reporting period.

Carine Smith Ihenacho, chief governance and compliance officer, and Severine Neervoort, senior analyst – corporate governance, at Norges Bank IM stated in a letter responding to CSRC’s proposals that it is important for investors that company boards address and report on material sustainability issues. “Boards should fulfill the objective of creating value for shareholders while observing the principles for responsible business conduct,” the letter said.

“They should understand the broader social and environmental consequences of business operations and value chains, set their own priorities to address these, and account for associated outcomes,” the letter added.

The Norwegian sovereign wealth fund invests $5 billion in equities and $1.8 billion in fixed income in China

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