Responsible Investment in Sovereign Wealth Funds: A Case Study of the Norwegian Government Pension Fund Global's Decision-making Structure and Its Implications for Addressing Adverse Human Rights Impacts

Cecilie Haugen Ngwenya & Linn Marie Bø

Student thesis: Master thesis


The research in this thesis was inspired by the international challenge to keep economic entities responsible for adverse impact on human rights. Today, there are no overarching institution that can ensure respect for the planet and its people, and states have been unable to solve these issues alone. Consequently, economic entities have responded to a growing set of expectation from the public to start self-regulating. Thus, the aim of the thesis is to study how a state-owned investment fund balance between financial value maximization and respecting human rights. The research paper is a case study of the Norwegian Government Pension Fund - Global, the largest Sovereign Wealth Fund in the world, and examines how the organization’s decision-making structure affect the ability to address adverse corporate human rights impacts.
The study takes a postmodernist stand with the purpose of emphasizing the importance of human rights in business studies. Through a multi-method qualitative approach based on semi-structured interviews and archival studies, the thesis sets out to analyze and discuss the conflicting rationales between the Fund’s three independent units: the Norwegian Central Bank, the Council on Ethics and the Ministry of Finance. In order to identify how this affect decision-making, the empirical data was screened and developed into codes that was thereafter transformed into analytical categories. The categories were analyzed with the theoretical framework that consist of Susanne Holmstrøms’ perspectives on legitimate forms of practices in organizations, and Niels Åkerstrøm Andersen’s theory on polyphonic organizations.
Findings from the analysis showed that the consequence of having three independent units with goals that are fundamentally in conflict with each hinder efficient decision-making based on human rights. Moreover, the division of roles between the units creates a skewed power dynamic where the current decision-maker, the Norwegian Central Bank, has been slow to address human rights. However, this dynamic is balanced by the Council’s normative power, that is important for the legitimization of the Fund’s image as a responsible investor as well as its role as the Fund’s own watchdog.
Lastly, it is concluded that the delicate nature of human rights and the subjects’ strong connection to nation states complicates decision-making due to the Fund’s state ownership. The thesis concludes that the unit structure itself does not hinder decision-making based on human rights however, the units need to find a common ground on how to address the issue.

EducationsMSc in International Business and Politics, (Graduate Programme) Final Thesis
Publication date2018
Number of pages175
SupervisorsKarin Buhmann