Norway’s sovereign wealth fund made a strong plea today for companies to add employee share ownership schemes, saying this would become part of its expectations of the thousands of businesses it invests in internationally.
Norges Bank Investment Management (NBIM) published an official view on employee share ownership on its website this morning, while a LinkedIn post by its chief executive officer Nicolai Tangen argued that employee ownership “isn’t just a perk – it’s good business”.
NBIM, which manages the NOK21trn (€1.9trn) Government Pension Fund Global (GPFG), said: “Growing evidence shows that well-designed employee share ownership can create long-term value for companies, shareholders, employees and society.”
Plans worked best when transparently designed schemes were offered broadly across workforces, complementing pay and benefits rather than replacing them, the Norwegian central bank division stated.
Within its portfolio of more than 7,200 companies, NBIM said, employee share ownership plans were most prevalent in East Asia, particularly Japan and South Korea, with larger European companies also more likely to offer them, though employee participation there was declining.
“In the US, they are found in sectors such as retail and technology among listed companies, with growing momentum in private equity,” NBIM added.
The SWF manager said its view on employee share ownership might evolve as practices and evidence developed.
“We will monitor adoption across our portfolio companies, follow emerging research on long-term value creation, and integrate this view into our human capital management expectations,” it said.
Asked whether this newly-published view would affect NBIM’s voting during this AGM season or in the future, a spokeswoman for the Oslo-headquartered SWF manager told IPE: “This view will not change how we vote. It is built on our existing voting practices”.
NBIM had consistently supported well-designed employee share ownership plans, she said, adding that since 2013, the organisation had voted in favour of 98% of management proposals, typically voting against only when there was insufficient transparency.
In his post, Tangen linked the rise of artificial intelligence to the need for more staff ownership of companies, writing: “As artificial intelligence transforms the global economy, questions about value distribution have gained urgency.”
But he also argued: “This is not about corporate social responsibility. It is about making good long-term financial decisions”.
The financial case for employee ownership was compelling, he said, adding: “This should be on every board’s agenda.”
