Sachs established an  30  For more on ownership strategies, see the NBIM website: http://www.nbim.no/en/Investments/ownershipstrategies/  31  For more about the UN guidelines, see “Global Compact”: http://www.unglobalcompact.org/. For more on the OECD guidelines, see: http://www.oecd.org/topic/0,3699,en_2649_37439_1_1_1_1_37439,00.html  32  South Africa received NOK 149.5 million in development assistance from Norway in 2010. See Norad website http://www.norad.no/en/tools-and-publications/norwegian-aid-statistics  BIS central bankers’ speeches  9  institute where advanced mathematical methods were applied to study the relationship between the position of the stars and the fates of human beings. 33 Collett was more down-toearth. He studied new methods of crop cultivation and was a keen supporter of the cultivation of potatoes here in South-Eastern Norway. 34 As a contributor to sustainable growth, we would have to say that Collett was closer to the mark than Sachs. Norway’s proximity to valuable natural resources has created substantial opportunities. New technology and new oil finds are still increasing the value of our oil wealth. Two North Sea fields where oil and gas were recently discovered, Galtvort (Hogwarts) and Gygrid (Hagrid), have been given names from the Norwegian version of Harry Potter. One of the books features the lucky potion Felix Felicis. This magical potion is difficult to make. The consequences can be catastrophic if the ingredients are mixed incorrectly. But if mixed correctly, the drinker will succeed in all that he undertakes. The potion also has some highly detrimental side-effects. If taken in excess, it may cause giddiness, recklessness and dangerous overconfidence.

The Western governance concept including the appointment of an independent director in the Board of Directors, the introduction of an Audit Committee, and other new initiatives to improve the governance structure, have helped to address some of the problems of the past —but only to a limited extent. Unfortunately, there have been some actual practices in the Western corporate world which are contrary to the intended ideals of good governance. The notorious examples of Enron and WorldCom are all too well-known, notwithstanding the fact that both corporations had Boards of Directors established in accordance with the Western concept of good governance. Yet both eventually faced severe financial difficulties. As I see it, there are two critical aspects of the Western practices which may potentially lead to serious financial difficulties for the firm. The first is that the Chairman and the CEO is one and the same person. The second is the practice of allowing company stock options to be part of the compensation for company Directors. Allow me to elaborate. A CEO is by designation the Chief of Management, responsible for achieving the best possible performance of the company. This means maximizing profits, increasing growth and market share, expanding business lines, and doing all that it takes to maximize the company’s share value. On the other hand, the Board of Directors has to oversee the operations of Management, ensuring that they operate well within the bounds of acceptable risks in order to ensure business continuity.