Carine Smith Ihenacho, chief governance and compliance officer of Norway’s $1.7 trillion sovereign wealth fund, emphasized the need for boards to be proficient in AI and take control of its application within businesses to mitigate risks. The Norges Bank Investment Fund, holding significant shares in nearly 9,000 companies globally—amounting to 1.5% of all listed stocks—has led in environmental, social, and corporate governance issues. About a year ago, the fund advised its invested companies on integrating responsible AI to enhance economic outcomes. However, many companies still need to make significant progress. Smith Ihenacho noted that while boards need to build competence in AI, this doesn’t mean every board requires an AI specialist. Instead, boards should collectively understand the relevance of AI to their business and establish appropriate policies.
The fund’s focus on AI governance is especially pertinent, as nine of its ten largest equity holdings are in tech companies, including major names like Microsoft, Apple, Amazon, and Meta Platforms. Investments in these firms drove a 12.5% growth in the fund’s stock portfolio during the first half of 2024. Over the past year, the fund’s exposure to the tech sector rose from 21% to 26%, with technology now making up a quarter of the stock portfolio. This highlights the crucial role that technology and AI play in today’s world.