OSLO (Reuters) - Norway’s sovereign wealth fund, the world’s largest, plans to more than double its investments in Saudi Arabia after it is included in the fund’s reference index soon, Chief Executive Yngve Slyngstad said on Friday.

The fund currently has Saudi assets worth 6.9 billion crowns ($825 million), spread over 42 companies including banks, petrochemicals and healthcare firms.

The fund’s reference index, the FTSE, will include Saudi Arabia in the coming year.

The killing of Saudi journalist Jamal Khashoggi after he entered the Saudi consulate in Istanbul has provoked an international outcry and calls for trade with Riyadh to be limited. [nL8N1X641O]

“We invest in companies, not countries. Our investments in companies based in Saudi Arabia will not be changed based on political developments,” Slyngstad told Reuters.

“Generally speaking, we are not set up to assess political risk.”

Earlier, the $970 billion fund said it would ask the 9,000 companies in which it invests to ensure their board members had sufficient expertise, time and independence.

The fund, which funnels Norway’s revenues from oil and gas production, owns 1.4 percent of all globally listed shares. It has in recent years become a more active shareholder as it has grown in heft.

While some of the demands put forward on Friday are not new for the fund - such as opposing CEOs who sit as chairs of their companies - others are, such as requiring industry expertise from directors.

A majority of independent board members should have “fundamental industry insight” and at least two of the independent members should have worked in the company’s industry, said the fund.

“It is really ... industry expertise which is an issue that has been under-communicated from investors,” said Slyngstad. “The strong desire to have a profitable company by having a board who knows the business.”

He declined to name specific sectors where he thought board industry expertise was lacking, but said: “There has been a focus on the financial sector, also from regulators, which we will reinforce from our point of view.

“But this is a broader issue than just the financial sector,” he added. “We have seen quite differing practice in different sectors and different countries.

“This is a signal that ... we will try to look at these issues more quantitatively, to see where we can find the major issues with regards to countries and sectors.”

The position papers will form the basis of the fund’s position for how it votes on the boards of companies.

“It will be a starting point for how we will vote,” Chief Corporate Governance Officer Carine Smith Ihenacho told reporters earlier.

Asked whether the fund would divest from reluctant companies, on these issues, she said: “It will be a basis for voting, dialogue and engagement.”

Directors should also ensure they have enough time to fulfill their obligations to the boards on which they serve, said the fund.

In practice, that means board members of listed companies should not serve on more than five boards at one time and the chair of a leading company should generally not chair the board of another company, it said.

In the third quarter, the fund made a return of 2.1 percent, helped by rising North American stocks. It still returned 0.2 percentage points less than the a benchmark index set by the Norwegian Finance Ministry.

“The market development was affected by expectations of differing economic growth and uncertainty about the effects of increased trade barriers,” Slyngstad said.

($1 = 8.3576 Norwegian crowns)