The Executive Board is responsible for Norges Bank’s operations. It has eight members appointed by the King in Council. The Governor of Norges Bank is chairman and the Deputy Governors are first and second vice-chairman. The second chairman has a special responsibility for the Government Pension Fund Global.
The Executive Board lays down guidelines and strategic plans for Norges Bank Investment Management's management activities. The aim is to add value through active management of the government’s and Norges Bank’s foreign financial assets, foster the owners’ long-term financial interests through active ownership and implement the owners’ management strategy in a cost-effective, prudent and confidence-inspiring way.
Norges Bank Investment Management’s governance model differs from other parts of Norges Bank. Its Executive Director has the responsibility and authority of CEO of the unit. The CEO reports directly to the Executive Board and is subject to oversight by the Governor on behalf of the Executive Board.
Executive Board oversight
The Executive Board has issued a job description and an investment mandate for the CEO. The mandate supplements the Ministry of Finance’s investment limits by setting additional rules for what the fund may invest in and the risk that may be taken in the management of the fund.
The Executive Board has adopted principles for risk management. These principles form a general risk management framework for the Government Pension Fund Global. Risk is split into four categories: market risk, credit risk, counterparty risk and operational risk. The principles for risk management are supplemented by additional risk limits laid down by the leader of Norges Bank Investment Management.
The leader of Norges Bank Investment Management reports to the Executive Board on the management of the Government Pension Fund Global on a monthly, quarterly and annual basis, in accordance with guidelines laid down by the Executive Board.
Responsible investment management
The Executive Board has laid down principles for responsible investment management of the Government Pension Fund Global. Responsible investment management shall support the objective of the fund by furthering the long-term economic performance of our investments and reducing financial risks associated with environmental and social factors. The principles include the consideration of good corporate governance and environmental and social aspects, in line with internationally recognized principles and standards.
The Executive Board has laid down principles for compensation to employees of Norges Bank Investment Management. The principles form the framework for the remuneration arrangement and shall foster and incentivise good governance and sound risk management, as well as prevent unauthorized risk-taking and conflicts of interest.
The Executive Board has set up four subcommittees as preparatory and advisory bodies:
The Audit subcommittee shall help strengthen and streamline the Executive Board’s work with financial reporting, operational risk management and the systems for risk management and internal control.
The Remuneration subcommittee prepares matters relating to Norges Bank’s pay and remuneration arrangements. The subcommittee prepares recommendations to the Executive Board on main terms and the salaries of Norges Bank Investment Management's CEO and other senior managers who report directly to the CEO. The subcommittee also prepares recommendations relating to the principles for compensation to employees in Norges Bank Investment Management and annual performance payments.
The Ownership subcommittee prepares and advises on matters concerning Norges Bank's work on responsible investment and the observation and exclusion of companies from the investment universe of the Government Pension Fund Global.
The Risk and Investment subcommittee shall help strengthen and streamline the Executive Board’s work on investment strategy, current exposure, evaluation of results, the definition and utilization of risk limits, as well as particularly large and important investments.