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index, developed by Carl Linaburg and Michael Maduell, is a 10-point scale called the Linaburg-Maduell Transparency Index, which focuses on elements such as clarity of strategy and objectives and independently audited annual reports (see box 7.4 on the full Linaburg-Maduell Transparency Index).14 Despite disagreements between methodologies,15 citing the rankings within such indexes is frequently used as shorthand to convey the high transparency standards maintained by individual SWFs. The governance structure of Norway’s SWF, for instance, is considered exceptional partly because of a “profound commitment to transparency and public disclosure” (Alsweilem and Rietveld 2017). The fund receives a full 10/10 score in the Linaburg-Maduell Transparency Index and ranks highest on the Truman 2015 SWF Scoreboard with a total score of 98.
LEGAL AND REGULATORY CONTEXT Although informed by global standards and norms, a SIF’s transparency and disclosure framework emanates chiefly from the specific legal framework within which the fund is created and managed, leading to a variety of disclosure standards among global SIFs. As discussed earlier, the pressure for increased transparency for SIFs arises from international standards like the Santiago Principles, or standards in use in the global financial markets (Dixon and Monk 2012). These global standards are frequently translated into commercial laws pertaining to all investment funds, but not always into domestic ad hoc laws that set up the SIF. Therefore, an important question driving the transparency and disclosure framework of an individual SIF is whether the fund has a legal obligation to disclose specific information, and to whom. In less transparency-oriented political contexts, disclosure to the public may be viewed as less important than disclosure to the political elite (Alsweilem and Rietveld 2017; Hatton and Pistor 2012). The focus may be on transparency to the fund’s own accountability structure, rather than to the public (Ang 2010). For example, the SWF of Qatar, the Qatar Investment Authority, has no legal or fiduciary requirement to disclose information to the public on the fund’s operations. Instead, its board of directors has discretion over the frequency and extent of public disclosure.16 The Kuwait Investment Authority is prevented by its establishment law from disclosing to the public particular information on the fund, such as its assets under management (Ang 2010). The Ireland Strategic Investment Fund (ISIF), by contrast, is required by law to provide specific information on the fund to the Minister for Finance, most of which is also disclosed in an annual report available to the public (see box 7.5). The SIF’s transparency and disclosure framework is also a function of the authorizing environment within which the SIF was founded. As discussed in previous chapters, the authorizing environment of public capital SIFs in particular can be complex because they are investment vehicles straddling public and private markets. In addition to being beholden to the public sponsor that created the fund, the SIF may be subject to the reporting requirements pertaining to SOEs as well as disclosure standards for investment funds perpetuated by the capital markets regulator in the fund’s domicile. The SIF also may be guided by regulatory disclosure requirements of the sector in which it operates (OECD 2016). As discussed in box 2.5 and chapter 5 of this publication, for instance, in China many SIFs (known as government guidance funds) set up at the municipal, provincial, and national levels are expected to meet the annual reporting requirements of the State-Owned Assets Supervision and Administration
