Corporate Governance in Norway: Regulation and Practice

Thursday, 2 July 2015: 2:15 PM-3:45 PM
TW1.1.03 (Tower One)
Jenni Maria Nossum, University of Oslo, Faculty of Law, Oslo, Norway
This paper is based on recent research about the Norwegian Corporate Governance model. Topics include historical context and background, today's model in Norway and the Norwegian state as a shareholder and an institutional investor.

Almost 50 years of oil operations in Norway and the management of the oil reserve have get Norway to be the second richest country in the world by GDP per Capita, approximately 89,000 Euro in 2013. The Norwegian state manages this oil reserve that remains under the public domain. Most proceeds are placed in the Government Pension Fund Global (SPU) and the Government Pension Fund Norway (SPI). This paper provides an overview of the management of the SPU including the role of its ‘Council on Ethics’.

The Norwegian state also holds direct shareholdings in several companies that are managed by different Ministries (especially the Ministry of Trade, Industry and Fisheries), including several listed ones. The shareholding composition for the companies listed at the OSE is distinctive: A large part of these companies are controlled by the Norwegian state or by foreign investors, leaving a remaining minimal group of private domestic investors. The Norwegian State is the single largest investor, controlling approximately 35 per cent of the aggregate market capitalization of listed companies. The Norwegian state has controlling shareholdings in several of the largest listed companies. Statoil ASA is Norway’s largest company and the 54th largest company in the world based on revenue. Statoil ASA is listed at the New York Stock Exchange and OSE, while the Norwegian state holding 67 per cent of the shares in Statoil ASA. Examples of other listed companies with high Norwegian state shareholdings are Telenor ASA (54 %), Yara International ASA (36,2 %), DNB ASA (34 %) and Norsk Hydro ASA (34,4 %). Together with Statoil ASA, these are five of the six largest companies listed at OSE.

The Norwegian Code of Practice for Corporate Governance (CG Code) applies to Norwegian public limited liability companies or equivalent foreign companies listed at Oslo Stock Exchange (OSE) and Oslo Axess. Distinctive features of the Norwegian CG Code will be presented, as well as the interaction of the Code with some featuring legal requirements in the Norwegian Public Limited Liability Act and the Norwegian Accounting Act. Some characteristics of the Norwegian Corporate Governance Model, such as controlling shareholders (block-holders), independent boards, and relatively strong minority shareholders protection, will be presented in this specific context.

The paper concludes with a discussion on which are the current challenges and issues for the Norwegian Corporate Governance model and practice. Does the Norwegian Corporate Governance model contribute to Norway’s welfare and development? How is it situated among existing models, such as the Nordic European, the Continental European, and the Anglo-American one? Can the Norwegian Model provide insights and features to be learned and transferred elsewhere?