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Pension Funds, Sovereign-wealth Funds and Intergenerational Justice

Author

Listed:
  • Cappelen, Alexander W.

    (Dept. of Economics, Norwegian School of Economics and Business Administration)

  • Urheim, Runa

    (Dept. of Economics, Norwegian School of Economics and Business Administration)

Abstract

Pension funds and sovereign-wealth funds own a large and increasing fraction of the shares in publicly traded companies in the OECD area. These funds typically have a very long time horizon on their investments, as well as highly diversified portfolios. These features imply that the interests of these funds on important issues are aligned with the interest of future generations because the longterm return on a highly diversified portfolio will depend on the degree to which the development of the world economy is sustainable. It is, therefore, in the enlightened self-interest of these investors to use their shareholder rights so as to protect the interest of future generations. The paper explores the arguments for a more active corporate governance policy among pension funds and sovereign-wealth funds and discusses the obstacles to such policies.

Suggested Citation

  • Cappelen, Alexander W. & Urheim, Runa, 2012. "Pension Funds, Sovereign-wealth Funds and Intergenerational Justice," Discussion Paper Series in Economics 19/2012, Norwegian School of Economics, Department of Economics.
    • Handle: RePEc:hhs:nhheco:2012_019
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    More about this item

    Keywords

    Pension funds; sovereign funds; future generations; corporate governance; shareholder. democracy.;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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