The employment contract for the incoming CEO at the world's largest sovereign wealth fund must clarify any conflicts of interest related to the company he founded, AKO Capital.
Nicolai Tangen is set to become CEO of Norges Bank Investment Management, which runs the assets of the 10.3 trillion Norwegian kroner ($995 billion) Government Pension Fund Global, Oslo, in September. He will replace Yngve Slyngstad, whose resignation was announced last year.
The supervisory council has been looking into the appointment of Mr. Tangen, who was named to the position in March. His relationship with Mr. Slyngstad and the terms of his employment have been examined by the supervisory council.
A statement by Norges Bank's executive board, in response to a letter from the supervisory council, said the central bank is now working on Mr. Tangen's employment contract.
"We make note of the Supervisory Council being of the opinion that it is unfortunate that not all conflicts of interest between Nicolai Tangen's finances and the role as CEO of Norges Bank Investment Management were clarified before his employment. In our letter of 29 April 2020, the executive board addresses why specific solutions to ensure sufficient distance could not be in place until after the employment had been made public," said Oystein Olsen, governor of Norges Bank, in the statement.
The central bank is working to ensure that "necessary distance is established between the Government Pension Fund Global, the AKO system and Nicolai Tangen's personal wealth." Mr. Tangen founded $17 billion hedge fund AKO Capital, where he is CIO and co-CEO.
The statement said that, for starters, Mr. Tangen "will no longer exercise ownership or have control over AKO's management." Relevant factors for his employment contract, which will be made public, are to be discussed May 27 by the Norges Bank executive board, the statement said.
"One premise for the work with this contract is that Nicolai Tangen will make the necessary arrangements, even though it might have negative tax consequences for him," the statement added.
The supervisory council also commented on the hiring process for Mr. Tangen. Norges Bank's executive board has said it will consider the need to clarify its ethics rules.
Separately, the Norwegian government said it will withdraw almost 420 billion kroner in petroleum revenues from the sovereign wealth fund in an effort to combat the economic impact of the coronavirus pandemic.
A proposed revision to the government's 2020 budget, published Tuesday, said the planned withdrawal represents 4.2% of the Government Pension Fund Global's assets.
