Sovereign Investing and Corporate Governance

by Paul Rose

Sovereign wealth funds (SWFs) are increasingly important players in equity markets in the United States and abroad. However, despite their economic power, their reach, and their desirability as investors, SWFs are almost entirely disengaged from corporate governance matters in U.S. firms. Indeed, with the exception of Norway’s Government Pension Fund-Global, SWFs are notable primarily for their passivity as shareholders.

Given that a variety of domestic and external political and regulatory factors that discourage SWF engagement in corporate governance in the United States, how can SWFs provide appropriate stewardship over their equity investments?

This article addresses this question by describing how SWFs and regulators can create the crucial “space” necessary for SWF engagement in corporate governance.

Sovereign Investing and Corporate Governance