Norway’s $2.3 trillion sovereign wealth fund is warning of a steady erosion of shareholder rights across major markets. The fund, which owns on average 1.5% of all listed companies globally, is concerned that regulations increasingly favor company founders and insiders over independent investors.

Concerns Over Shareholder Rights

Carine Smith Ihenacho, the fund’s chief governance and compliance officer, stated that the fund is concerned about the general erosion of shareholder rights in many markets, including the US, UK, Europe, and Hong Kong. One of the chief concerns is the allowance for dual-share classes, which typically give more voting power to founders and insiders, while independent investors can own standard shares with less voting power.

The fund is also concerned about changes to reporting requirements, making them more voluntary, and restrictions on access to sue companies and their boards. Fund CEO Nicolai Tangen attributed the trend to strong competition between stock exchanges, which are permitting more deviations from normality to attract new IPOs.

The fund recently took part in the IPO of Elon Musk’s SpaceX, and now holds a 0.05% stake in the company, worth $1.22 billion. However, Musk holds over 80% of voting rights, raising questions about the company’s governance and the rights of independent shareholders.

To counter the trend, the fund is advocating for the issue to stock exchanges, regulators, and companies. Smith Ihenacho emphasized the importance of guardrails around different share voting structures to protect the rights of independent shareholders.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.