Corporate Governance in Oil-Lubricated Norway: Regulation, Practice, Ethics and Incoherence

Abstract

This paper presents an overview and brief discussion of three interlinked topics: the key features of the Norwegian corporate governance model, the Norwegian State as a shareholder and as an institutional investor. The essence of the Norwegian corporate governance model is enabling large shareholders to exercise effective management and control over the company, balanced with minority shareholder protection. A strictly hierarchical governance structure, with clear tasks and fundamental lines between the corporate bodies, is perceived to enable effective management to be carried out. In addition to its role as legislator, the Norwegian State is also a substantial market actor, being the largest shareholder in public limited liability companies in Norway. Furthermore, the Norwegian State owns the largest sovereign wealth fund in the world, holding 1.3 per cent of the shares in the world. A brief overview of the fund's responsible investment is given, especially looking at the 'Council on Ethics' and recent development in the Ethical Guidelines regarding exclusion of coal companies.

Keywords: Corporate governance, government ownership, institutional investor, sovereign wealth funds, ethics, Norway