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Meld. St. 27 (2013–2014) Report to the Storting (white paper)

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Published by:Norwegian Ministry of Trade, Industry and Fishe

Internet address: www.government.no

Photo: Olaf Schjelderup and UNINETT AS, NorskCermaq, Telenor, Hanne H. Christiansen and Uniand Statoil ASA, Yara International, Alan O’Neill a

Printed by: DSS 03/2015

MILJØMERKET

241 Trykksak 379

Table of contents

1 Introduction and summary ...... 71.1 Background to the report ............. 71.2 Summary ......................................... 81.2.1 Ownership – significance for value

creation ........................................... 81.2.2 Prerequisites for private ownership

in Norway ....................................... 81.2.3 The state’s ownership administered

directly by the ministries .............. 10

Part I Ownership – significance for value creation ........................ 13

2 Ownership – significance and development trends ................... 15

2.1 The significance of ownership for value creation ................................. 15

2.1.1 The importance of capital allocation ......................................... 15

2.1.2 The importance of the exercise of ownership ................................... 15

2.1.3 Owner composition and owner types ................................................ 17

2.2 What characterises good owners? ........................................... 17

2.2.1 Owners focused on capital allocation ......................................... 18

2.2.2 Long-term strategic owners .......... 182.2.3 Owners focused on operational

involvement .................................... 192.3 Trends and developments in the

exercise of ownership .................... 192.3.1 Polarisation between passive and

active owners .................................. 192.3.2 Faster global industrial and

technological developments ......... 202.3.3 Growth in long-term state

ownership with expansive agendas ........................................... 21

2.3.4 Greater expectations of responsible ownership .................. 22

2.3.5 Increased awareness of the long-term value trend of companies ....................................... 22

2.3.6 Increase in activist investors ........ 232.3.7 Effective board work has become

a more important competitive factor ............................................... 24

Part II Prerequisites for private ownership in Norway.............. 25

3 Ownership in Norway ................ 273.1 The Norwegian capital market –

overview and figures ...................... 273.1.1 The equity market .......................... 283.1.2 The external capital market .......... 313.1.3 Other characteristics ..................... 313.2 Asset management and

ownership in Norway ..................... 313.2.1 Private ownership ........................... 313.2.2 Public ownership ............................ 37

4 Private ownership as a main rule ....................................... 39

4.1 Why should private ownership be the main rule? ............................ 39

4.2 The challenges of state ownership 404.2.1 The state’s different roles .............. 404.2.2 Concentration of power ................. 414.2.3 Limited industrial expertise .......... 414.3 The government’s policy for

strengthening private ownership .. 414.3.1 Framework conditions ................... 424.3.2 Tax ................................................... 424.3.3 Other measures .............................. 44

Part III The state’s ownership administered directly by the ministries.............................. 45

5 The present state ownership administered directly by the ministries ...................................... 47

5.1 Overview ......................................... 475.2 Historical developments ................ 48

6 Why should the state own? ...... 506.1 Justifications for state ownership . 506.1.1 Correction of market failures ........ 506.1.2 Maintaining important companies,

head office functions and key competences in Norway ................ 51

6.1.3 Management of common natural resources ......................................... 52

6.1.4 Sectoral-policy and societal considerations ................................. 52

6.2 Alternative instruments to state ownership ........................................ 54

6.3 Categorisation of the companies under direct ownership ................. 55

7 What should the state own? .... 577.1 Changes to the state’s ownership 577.1.1 Reduction in the state’s direct

ownership over time ...................... 577.1.2 Value-increasing transactions ....... 587.1.3 Demergers and the creation of

new state companies ...................... 587.1.4 Factors to be emphasised in the

event of changes to the state’s ownership ....................................... 59

7.2 Ministerial powers ......................... 59

8 How should the state own? ...... 608.1 Framework for the state’s

ownership administration ............. 608.1.1 Constitutional framework ............. 608.1.2 The minister’s authority within

the company ................................... 618.1.3 Administration of the company .... 628.1.4 Specifically concerning manage-

ment of companies wholly owned by the state ..................................... 62

8.1.5 Other frameworks .......................... 638.2 The Norwegian state’s principles

of corporate governance ............... 678.2.1 Introduction to the principles ....... 678.2.2 Principle 1. All shareholders shall be

treated equally. ............................... 688.2.3 Principle 2. There shall be

transparency in the state’s ownership of companies. ............... 68

8.2.4 Principle 3. Ownership decisions and resolutions shall be made at the general meeting. ...................... 69

8.2.5 Principle 4. The board is responsible for elaborating explicit objectives and strategies for the company within the constraints of its articles of association; the state sets performance targets for each company. ......................................... 70

8.2.6 Principle 5. The capital structure of the company shall be appropriate given the objective and situation of the company. .............................. 71

8.2.7 Principle 6. The composition of the board shall be characterised by competence, capacity and diversity and shall reflect the distinctive characteristics of each company. . 71

8.2.8 Principle 7. The board assumes executive responsibility for administration of the company, including performing an independent supervisory function vis-à-vis the company’s management on behalf of the owners. ................................. 72

8.2.9 Principle 8. The board should adopt a plan for its own work, and work actively to develop its own competencies and evaluate its own activities. ................................. 73

8.2.10 Principle 9. Compensation and incentive schemes shall promote value creation within the companies and be generally regarded as reasonable ....................................... 74

8.2.11 Principle 10. The company shall work systematically to safeguard its corporate social responsibility ...... 74

8.3 Details of the state’s corporate targets and expectations ................ 75

8.3.1 Returns and dividends ................... 758.3.2 Board work ..................................... 778.3.3 Corporate social responsibility ..... 808.3.3.1 Overarching and general

expectations .................................... 828.3.3.2 Climate and environment .............. 838.3.3.3 Human rights .................................. 848.3.3.4 Labour rights .................................. 848.3.3.5 Commitment to anti-corruption

practices and transparency in financial transactions ..................... 85

8.3.3.6 The Government’s follow-up of corporate social responsibility ...... 85

8.3.4 Executive salaries ........................... 858.3.5 Research, development, innovation

and expertise .................................. 868.3.6 Diversity and equality .................... 888.4 Contact with companies ................ 888.4.1 Particular about information

exchange in companies wholly owned by the state ......................... 88

8.5 The state’s various roles ................ 898.5.1 Organisation of the state’s

ownership administration .............. 898.5.2 Further development of the state’s

exercise of ownership .................... 90

9 A review of the state’s direct ownership interests .................... 91

9.1 Category I – Companies with commercial objectives ................... 91

9.1.1 Ambita AS ....................................... 919.1.2 Baneservice AS ............................... 92

9.1.3 Cermaq ASA ................................... 929.1.4 Entra Holding AS ........................... 939.1.5 Flytoget AS ..................................... 949.1.6 Mesta AS ......................................... 949.1.7 SAS AB ............................................ 959.1.8 Veterinærmedisinsk

Oppdragssenter AS ........................ 969.2 Category 2 – Companies with

commercial objectives and an objective of maintaining head office functions in Norway ....................... 96

9.2.1 Aker Kværner Holding AS ............ 969.2.2 DNB ASA ........................................ 979.2.3 Kongsberg Gruppen ASA ............. 989.2.4 Nammo AS ...................................... 999.2.5 Norsk Hydro ASA .......................... 999.2.6 Statoil ASA ...................................... 1009.2.7 Telenor ASA ................................... 1009.2.8 Yara International ASA .................. 1019.3 Category 3 – Companies with

commercial objectives and other specifically defined objectives ...... 102

9.3.1 Aerospace Industrial Maintenance Norway SF ...................................... 102

9.3.2 Argentum Fondsinvesteringer AS 1029.3.3 Eksportfinans ASA ......................... 1039.3.4 Electronic Chart Centre AS .......... 1049.3.5 Investinor AS .................................. 1049.3.6 Kommunalbanken AS .................... 1059.3.7 NSB AS ........................................... 1069.3.8 Posten Norge AS ............................ 1079.3.9 Statkraft SF ..................................... 1079.3.10 Store Norske Spitsbergen

Kulkompani AS .............................. 108

9.4 Category 4 – Companies with sectoral-policy objectives ............... 109

9.4.1 Andøya Space Center AS ............... 1099.4.2 Avinor AS ........................................ 1109.4.3 Bjørnøen AS .................................... 1119.4.4 Eksportkreditt Norge AS ............... 1119.4.5 Enova SF ......................................... 1129.4.6 Gassco AS ....................................... 1129.4.7 Gassnova SF .................................... 1139.4.8 Innovation Norway ......................... 1139.4.9 Kings Bay AS .................................. 1149.4.10 Nofima AS ....................................... 1159.4.11 Norfund ........................................... 1159.4.12 Norwegian Seafood Council AS .... 1169.4.13 Norsk Helsenett SF ........................ 1179.4.14 Norsk Rikskringkasting AS ........... 1179.4.15 Norsk samfunnsvitenskapelig

datatjeneste AS ............................... 1189.4.16 Norsk Tipping AS ........................... 1199.4.17 Petoro AS ........................................ 1199.4.18 Simula Research Laboratory AS ... 1209.4.19 SIVA SF ........................................... 1219.4.20 Space Norway AS ........................... 1219.4.21 Statnett SF ....................................... 1229.4.22 Statskog SF ..................................... 1239.4.23 UNINETT AS .................................. 1249.4.24 University Centre in Svalbard AS . 1249.4.25 AS Vinmonopolet ............................ 1259.4.26 Regional health authorities ........... 126

10 Financial and administrative consequences ............................... 128

Diverse and value-creating ownershipMeld. St. 27 (2013–2014) Report to the Storting (white paper)

Recommendation of the Ministry of Trade, Industry and Fisheries of 20 June 2014, approved in the Council of State the same day.

(The Solberg Government)

1 Introduction and summary

1.1 Background to the report

One of the government’s most important priorityareas is to boost competitiveness in Norwegianbusiness and industry, to create more secure jobsand strengthen the financing of the welfare sche-mes.

Our competitiveness is influenced by how effi-ciently we utilise the country’s resources, and ourability to innovate and restructure. The govern-ment aims to implement a broad set of measuresto strengthen competitiveness and increase over-all value creation in Norway. One of these measu-res is to facilitate diverse and value-creatingownership. Good ownership, by both the privateand public sectors, is important. Our competitive-ness and value creation depend on the establish-ment, development and operation of profitableenterprises, and the restructuring or phasing outof unprofitable ones. Good management and goodownership are key contributors to this aspiration.Diverse, well-developed and competent ownercommunities are a prerequisite for nationalcompetitiveness and value creation.

The government will shape the policy to makeit possible for everyone to save and invest and,through their ownership, participate directly inand reap the rewards of the value creation thattakes place in Norway. The objective is increased

competitiveness, value creation and more secureand productive jobs. Against this background, thegovernment will strengthen private ownership inNorway.

The government believes that there are anumber of good reasons why the state shouldexercise ownership in different companies. Thesewill vary from company to company, from an ini-tial premise that state ownership may help provideeconomic and social safeguards. Accordingly, forthe foreseeable future, Norway will have conside-rable state ownership.

At the same time, state ownership in Norwe-gian business and industry is currently veryextensive. In order to contribute to a more diverseand productive ownership, and to reduce thepotential challenges entailed by extensive stateownership, the government wishes over time toreduce direct state ownership.

The government believes that it is crucial forstate ownership to be administered professionallyand predictably, and the government will conductits state ownership policy in a responsible mannerthat provides space for both diversity of owners-hip and value creation as a contribution toboosting Norwegian competitiveness.

Against this background and based on its poli-tical platform, the government is submitting areport to the Storting on ownership in Norwegian

8 Meld. St. 27 (2013–2014) Report to the Storting (white paper) 2013–2014Diverse and value-creating ownership

business and industry, with a main emphasis onthe framework and policies relating to the state’sdirect ownership.

Part I of the report is a presentation of howownership and different types of owners can con-tribute to value creation; part II outlines the princi-ple direction of the government’s policies for pro-moting diverse ownership in Norwegian businessand industry; and part III, the main section of thereport, presents the government’s policy fordirect state ownership.

The presentation in chapters 2 and 3 of thereport and parts of chapter 8 are based on workperformed for the Ministry of Trade, Industry andFisheries by the McKinsey & Company consul-tancy firm.

1.2 Summary

1.2.1 Ownership – significance for value creation

Ownership can be highly significant for compa-nies’ competitiveness and value creation. Ownersand investors have a fundamental role in facilita-ting profitable business activity by contributingrisk capital for the establishment of new compa-nies or for expanding established companies.What constitutes a good composition of enterpri-ses and owners will vary in line with markettrends, with an enterprise’s development andnature, and with the owners’ prerequisites andattitudes to risk. A diversity of owners, ownertypes and owner communities will therefore beable to enhance the combination of enterprisesand owners, prompt desirable restructuring andinnovation, and hence increase competitiveness.

An increased rate of change in business andindustry means that the importance of enterpri-ses’ ability to adapt and innovate is increasing.This places greater demands on the owners, whoset policies for the companies’ activities, and makecritical decisions in the event of major changes inthe companies. For example, this would relate torestructuring, investments, business start-ups andto the acquisition, divestment and winding up ofbusinesses. In such a business climate, competentowners, with the ability to understand marketsand a company’s situation and opportunities, areimportant for realising the company’s potential forvalue creation.

In the capital market, those who want to saveare connected with those who want to lend andinvest. In this way, capital is channelled to potenti-ally profitable investments, and risk is distributed

between the participants. As a result, the capitalmarket streamlines the use of resources in theeconomy.

Ownership is important for how companiesare governed and run. Owners can be involved incompanies in different ways and to differentextents, depending on the ownership model. Atone extreme are owners who allocate capitalthrough small shareholdings, and who are easilyable to liquidate positions if the company does notperform and deliver returns as expected. At theother extreme are owners who get involved inoperational activities with an aim to develop profi-tability over time and exploit inter-company syner-gies. Good owners with a low level of active invol-vement will primarily ensure that companies fol-low principles of good corporate governance andmanagement in order to protect their own inte-rests. With a greater degree of involvement,owners can create added value by supporting andfollowing up the companies.

The owner composition and owner types maybe significant for value creation in companies inthat they may create different incentives for exer-cising good corporate governance. Accordingly,different combinations of owner concentration,owner type and duration of ownership may affectthe quality of the exercise of ownership.

How ownership is exercised has changed inrecent years. There has been a gradual trendtowards more fragmented ownership in listedcompanies. Companies must take into accountincreasingly more rapid changes in their surroun-dings and greater uncertainty and volatility in theglobal markets. This makes it more challenging tosustain strategic competitiveness and the ability tocreating value over time, and makes greaterdemands of management, boards and owners tomake good decisions quickly. The focus onowners’ and companies’ social responsibilities hasalso increased and, in the wake of the financial cri-sis, there has also been a trend towards increasedawareness of the long-term performance ofcompanies, and the emergence of activist inves-tors. Another trend is recognition that good boardwork has become a more important competitivefactor for the companies.

1.2.2 Prerequisites for private ownership in Norway

In the government’s view, private ownershipshould be the main rule in Norwegian businessand industry. The government intends to boostprivate ownership as part of its measures to

2013–2014 Meld. St. 27 (2013–2014) Report to the Storting (white paper) 9Diverse and value-creating ownership

strengthen the competitiveness of Norwegianbusiness and industry.

Private ownership is a diverse concept cove-ring different types of holdings, for examplefamily ownership, employee ownership, institutio-nal ownership and ownership by private individu-als. Owners have different expectations and cancontribute to companies’ value creation in diffe-rent ways, and the extent of owner involvementvaries from highly active owners, taking an opera-tional role in the companies’ businesses, to pas-sive financial owners with small shareholdings.

Although there is great variation between pri-vate owners, in the government’s opinion, privateownership is characterised by certain fundamen-tal factors that make it essentially well-suited tocontributing to value creation and improving Nor-wegian competitiveness.

Private owners can often more directly lookafter their own preferences and assets, and exer-cise more direct personal ownership than thestate, which performs its role as an owner onbehalf of the community. In the case of a personalowner, there will normally be fewer decision-making steps between owners and managementthan if ownership is administered by institutions.This indicates that personal (private) owners mayhave stronger incentives for safeguarding theirown ownership interests. This can produce bettercorporate governance, higher profit expectationsand more appropriate risk management in linewith the owners’ interests.

Private owners may often be closer to and bet-ter informed about the markets. This applies bothto active private owners who are operationallyinvolved in the companies they own, for exampleon the board, and to passive, more financial,owners who follow the companies’ developmentsclosely on the basis of thorough financial andindustrial analyses.

Private owners are likely to have strongerincentives for efficient operation and high returns.This may be an argument for boosting privateownership. It may also be an argument for brin-ging private co-owners into companies where thestate is a dominant owner and where there aregood grounds for state ownership.

The government would also like to point tosome potential challenges associated with stateownership which suggest limiting the extent ofdirect state ownership in commercial companiesand strengthening private ownership. Theserelate to potential conflicts between the state’s dif-ferent roles, the risk of a concentration of powers,

and the state’s limited industrial expertise as anowner.

The government has an objective of strengt-hening private ownership in Norway and organi-sing policies to make it more profitable to esta-blish businesses, work, save and invest. Thegovernment aspires to reduce direct state owners-hip over time, which may help boost privateownership.

The government will strengthen privateownership through a broad set of measures.

What is most important for ensuring healthyeconomic growth in Norwegian business andindustry is for the general economic policy to con-tribute to stable and predictable framework condi-tions. The policy must therefore be structured soas to promote predictable and healthy trends inprices, wages, interest rates, exchange rates andtax levels. This will also have the effect of redu-cing uncertainty in the economy, lowering capitalcosts and improving access to capital. Good, gene-ral framework conditions that are not biasedtowards individual industries benefit all enterpri-ses, employees and owners. This allows for a bet-ter functioning capital market, more vigorouscompetition, strengthened private ownership,healthy restructuring and innovation, improvedcompetitiveness and better value creation.

The tax system is a crucial economic fra-mework condition having great significance forNorwegian business and industry and for privateownership. The government will use the tax andduties system to finance public goods, facilitatesocial mobility, achieve more efficient utilisationof resources, and create better conditions for Nor-wegian business and industry. Private ownershipmust be strengthened and it must be profitable towork, save and invest, and start up, operate anddevelop companies.

The government took the first steps in growth-promoting tax reductions which will strengthenprivate ownership, among other things, in the nati-onal budget for 2014. Total tax reductions in theadopted budget came to in excess of NOK 7 bil-lion. The general tax rate for individuals andcompanies was reduced to 27 per cent, the wealthtax rate was reduced to 1 per cent, while the mini-mum allowance was increased to NOK 1 million,and inheritance tax was abolished. The govern-ment also refers readers to the Scheel Committeewhich is reviewing corporate taxation. In line withthe boost to growth-promoting tax reductions anda lower tax level, the Scheel Committee will alsoassess proposals for net tax reductions.


Work on streamlining bureaucracy for busi-ness and industry and private individuals is a keyarea for the government. This may help busines-ses and owners spend fewer resources on repor-ting and purchasing of administrative services.This will make it easier to start up, run and grow abusiness in Norway. Over time, this will result inmore private ownership. The government aims toreduce the annual cost of to business and industryof complying with statutes and regulations byNOK 15 billion by the end of 2017, compared withthe cost level in 2011, which represents a redu-ction of 25 per cent. The government also seeks topromote an entrepreneurial culture. Over time,this will result in greater capacity for restructu-ring and innovation, value creation and privateownership.

The government will use the national budgetin the years ahead to implement further tax chan-ges to stimulate labour, saving, entrepreneurship,business activity, private ownership and invest-ment. The government will work for a simpler,more growth-promoting tax system and will conti-nue to prioritise tax cuts that enhance Norwegiancompetitiveness and help secure productive andvalue-creating Norwegian jobs. The governmentwill also assess other measures to strengthen pri-vate ownership, including measures to increaseprivate savers’ ownership of Norwegian compa-nies and measures to stimulate employee owners-hip.

Furthermore, the government is committed tomaking it attractive for foreign investors to investin Norway. Foreign owners add to the compe-tency and diversity of ownership. They may alsoboost knowledge transfer and expertise amongNorwegian companies and private owners. It istherefore beneficial that foreign companies andinvestors want to invest in Norway, which is refle-cted, for example, in the relatively high level ofshareholdings of foreign investors on the OsloStock Exchange. This shows that Norwegianemployees, owners and industries are competi-tive.

1.2.3 The state’s ownership administered directly by the ministries

In the government’s view, private ownershipshould be the main rule in Norwegian businessand industry. Direct state ownership should havea special justification.

In the government’s view, there are a numberof reasons why the state should exercise owners-hip of different companies. These relate, for exam-

ple, to corrections of market failures, the maintai-ning of important companies, head offices functi-ons and key competence in Norway, the manage-ment of common natural resources and sectoral-policy and societal considerations. Beyond therebeing good reasons for state ownership, the statealso possesses specific characteristics which maymake it a good owner in a broader perspective.These include the fact that the Norwegian state isa long-term and financially strong, owner which isable to make a positive contribution to long-termownership. Along with other long-term investors,the state can contribute to stability and stimulategrowth of Norwegian companies and competencebuilding over time. This means that, for the fore-seeable future, the state will have considerabledirect ownership.

In the government’s assessment, the gover-nance of direct state ownership is handled in aprofessional and responsible way. Through trans-parency concerning corporate governance princi-ples, acceptance of the division of roles andresponsibilities in corporate legislation, gover-nance through general meetings and an emphasison choosing competent and independent boardsof directors, the exercise of Norwegian stateownership can be seen as advanced, including inan international context.

Since 2006, the state’s portfolio of companieshas been divided into four different categories.The categorisation has been based on the state’sjustification and objectives for direct state owners-hip. The government believes that the categorisa-tion system has helped clarify the state’s objectivefor ownership of the individual company and thatthe current four categories are an appropriateclassification of ownership. The government the-refore intends to maintain this categorisation.

Over time, the government wishes to reducethe state’s direct ownership. This will particularlyapply to companies where the state has no parti-cular reasons for being an owner, but it may alsobe appropriate to reduce the state’s holdings inother companies, assuming this can be done wit-hin a framework that safeguards the objective ofthe ownership.

The government believes that the state shouldnot have a long-term ambition of ownership incompanies where the state’s objectives are purelycommercial. In the government’s opinion, overtime, other owners will often be better able toincrease the value of such companies. On thisbasis, in the budget proposal to the Storting for2015, the government will ask parliament for amandate to fully or partially divest the state’s


ownership of companies in category 1. For someof these companies, the government already hassuch authority. The government emphasises thateven though the state should not have a long-termambition of owning such companies, any changesin the state’s holdings will be made only if it is con-sidered to be financially beneficial to the state.Furthermore, there may be corporate or market-related factors entailing that the state shoulddelay use of these powers.

The companies in category 2 are commercialcompanies where the objective of state ownership,beyond a return on invested capital, is to retainhead office functions in Norway. This is achievedthrough a holding that gives negative control, i.e.more than one-third. The government’s premisewill therefore be that it will not be appropriate toreduce the state’s holdings in these companies tobelow 34 per cent. There may be special factorsdictating why the lower threshold for the state’sholding in individual companies in category 2deviates from 34 per cent. In the budget proposalto the Storting for 2015, the government accor-dingly intends to ask for a mandate to possiblyreduce the state’s holdings in Kongsberg Grup-pen ASA and Telenor ASA, down to 34 per cent.

Category 3 includes companies where thestate has a commercial objective in its ownership,and where there are other justifications for stateownership than maintaining head offices in Nor-way. The government believes that there aresound justifications for the state to have holdingsin these companies. Nonetheless, for companiesin category 3, there may still be scope for adjust-ments to and changes in the state’s ownershipbased on commercial considerations, and in a waythat also takes into account the state’s rationalefor ownership in these companies.

The state’s holdings in the sectoral-policycompanies in category 4 should, as a rule, remainintact. This does not however prevent changes ifthe sectoral-policy interests no longer apply, orcan be fulfilled in another satisfactory mannerthrough the use of instruments other thanownership.

As an owner, in principle, the government willtake a positive view of strategic initiatives andtransactions that may be expected to contribute tovalue growth in the companies and that are alsoimplementable within a framework that safegu-ards the objective of the state’s ownership.

Only in very special circumstances will thegovernment assess increasing the state’s holdingsin partly owned companies. Nor does the govern-ment consider it relevant for the state to be pro-

active in acquiring new strategic positions incompanies subject to competition. Only in extraor-dinary cases will the government consider under-taking new state ownership positions. Such anundertaking would have to be carefully assessedand justified on the basis of economic profitabilityand broader considerations. The government iscommitted to state production activities being car-ried out efficiently, using an appropriate manage-ment and organisational structure. On this basis,the government may consider reorganisations ofstate-owned enterprises and the founding of newcompanies.

The government aims for the Norwegianstate’s ownership to be an example of bestpractice internationally. Ownership shall be admi-nistered professionally, and the government willconduct a responsible ownership policy characte-rised by predictability and established principlesfor state governance. In executing its ownership,the state will emphasise areas as, where an owner,it has good premises for adding value to thecompanies, including a continued emphasis onstrengthening strategic and financial follow-up ofthe companies through analysis, strengtheningwork on recruiting board members and systemati-sing assessments of board activities. The state willplace emphasis on being a leading owner when itcomes to promoting good corporate governance.

In this report, the government has made cer-tain adjustments to the state’s principles of corpo-rate governance, in line with developments in cor-porate governance and established practice.

The primary purpose in the commercialcompanies is the return on invested capital. Thegovernment believes that various factors contri-bute to this. Accordingly, the government hasclear expectations of the companies in terms ofreturns and dividends, board work, corporatesocial responsibility, executive remuneration,research and development, and diversity and equ-ality.

Corporate social responsibility is an area thathas garnered increased attention and importancein recent years, both in business in general andfor the state as an owner. The government expectscompanies in which the state has a holding towork systematically on their corporate socialresponsibility and to be exemplary in their respe-ctive fields. The government would particularlylike to draw attention to developments in the cli-mate and the environment, and to the impactsthese may have on society as a whole and on thedevelopment of companies in particular. Thegovernment expects companies to have a good


understanding of risk in terms of how climatechange and climate policy initiatives may affecttheir activities, and for them to be at the forefrontof work on the climate and the environment intheir sectors.

In respect of the state’s attitude to executiveremuneration, the government signals certainchanges in this report. In some areas, however,

the government believes that a more detailedreview is required before it puts forward its newguidelines. The Storting will be informed appro-priately when the guidelines are in place.

The company review in chapter 9 details thestate’s objectives of ownership in each individualcompany, based on the justifications for stateownership and the four ownership categories.

Part IOwnership – significance for value creation


2 Ownership – significance and development trends

This chapter describes the significance thatownership may have for value creation. It gives aportrayal of what characterises good owners andof key development trends in the exercise ofownership in recent years. The topics describedrelate primarily to commercial companies, but willbe transferable to some extent to other types ofcompanies.

2.1 The significance of ownership for value creation

Ownership can be highly significant for value cre-ation. Different phases of a company’s develop-ment present different needs, and differentowners may have varying preconditions for contri-buting to a company’s development. These relateto, for instance, expertise, controllability, objecti-ves, access to networks, preconditions for contri-buting to restructuring and innovation, and forcontributing capital on the basis of risk appetiteand capacity. What constitutes a good combina-tion of company and owners may vary with thecompany’s phase of development, growth andnature. A diversity of owners, owner types andowner communities will contribute positively to agood combination of company and owners, soundbusiness development and economic value crea-tion over time.

An increased rate of change in business andindustry means that the importance of thecompany’s ability to adapt and innovate increases.This places greater demands on the owners, whoset policies for the companies’ activities, and makecritical decisions in the event of major changes inthe companies. This may, for example, relate tothe setting up of new businesses and to the acqui-sition, divestment and winding up of businesses.In such a business climate, competent ownerswith the ability to understand a company’s situat-ion, challenges and opportunities are importantfor realising the company’s potential for value cre-ation.

The owner can contribute to the companies’value creation in a number of ways. These are des-cribed in more detail below.

2.1.1 The importance of capital allocation

Well-developed and competent owner communi-ties are a prerequisite for value creation. Ownersand investors have a fundamental role in facilita-ting profitable business activity by contributingrisk capital for the establishment of new compa-nies or for expanding established companies.

In the capital market, those who want to saveare connected with those who want to lend andinvest. In this way, capital is channelled to potenti-ally profitable investments, and risk is distributedbetween the participants. In this fashion, the capi-tal market streamlines the use of resources in theeconomy.

Sound decisions concerning financing are con-tingent on sufficient knowledge about expectedprofitability, risk, markets, sectors, companies andthe position the company is in. Strong and compe-tent owner communities and professional commu-nities can be crucial for analysing and understan-ding risk and potential returns, and therebyensuring the appropriate capital input.

2.1.2 The importance of the exercise of ownership

Ownership is important for how companies aregoverned and run. Owners can be involved incompanies in different ways and to differentextents, depending on the ownership model. Atone extreme are financial owners who allocatecapital through small shareholdings, and who areeasily able to liquidate positions if the companydoes not perform and deliver returns as expected.At the other extreme are owners who get involvedin companies’ operations and aim to develop profi-tability over time and exploit inter-company syner-gies.

Good owners with a low level of active involve-ment will primarily ensure that companies followprinciples of good corporate governance and


commercial management in order to protect theirown interests. With a greater degree of involve-ment, owners may try to create added value bysupporting and following up the companies. Suchowners may, for example, use networks and theirown industrial expertise in order to complementthe executive management, and also influencewho is on the board and thereby also on the mana-gement. They are more prone to impose require-ments on the board and management based ontheir own knowledge of relevant markets andsectors, and may become involved in companies’strategy formulation or giving direct operationalsupport.

Private equity (PE) investors are an exampleof owners who have extensive involvement in thecompanies in their portfolios. These ownersreceive a lot of attention but they constitute a rela-tively small part of the overall ownershipcommunity.

The model for PE investors is to take overcompanies where they can realise a potential forrunning the company better or contributing tofurther growth. PE investors are also liable tomake changes to management and/or providedirect operational support. In many cases, theycontribute to both organic growth and growththrough acquisition. Analyses indicate thatreturns on PE funds have been higher than for therest of the market, including when adjusted forthe gearing ratio. Since 1995, US PE funds haveyielded returns three percentage points higher onaverage than the S&P 5001. There have typicallybeen large differences in funds which performwell and those which perform badly, with traditio-nally great stability in respect of which partici-pants perform well. This indicates that skill inexercising ownership creates value. The figuresfor recent years also indicate that the PE investorsas a whole have gradually become more professio-nal, that there is now less difference in perfor-mance between the participants, and somewhatlower stability as to which investors perform wellover time. What creates high returns for the PEinvestors has changed over time. Formerly, thereturn was largely based on identifying and inves-ting in the right companies and sectors («buyingwell»). In recent years, the trend is towards goodownership being increasingly taken to mean dri-ving value creation («owning well»)2. This may

reflect the fact that the owners’ expertise hasbecome more significant.

The owners choose the company’s board. Acompetent board is important if a company is tobe operated prudently and profitably. Someowners sit on the board themselves, and throughtheir board representation participate directly inthe company’s administration. Some owners alsoparticipate in the executive management invarious ways.

The owners’ primary aim will essentially be tomaximise the return on invested capital at thedesired level of risk. The company managementmay have incentives for pursuing other objectives.This is normally referred to as the principal-agentproblem3. The relationship between the majorityand minority shareholders, between managementand employees, and between management andother stakeholders are other key agency dilem-mas in the corporate context. The diminution ofpotential difficulties in such relationships is key tovarious principles for sound corporate gover-nance, such as those of the OECD4. Such difficul-ties do not necessarily reduce value creation, butthey may affect the risk and also redistribute thereturn between stakeholders. Conflicts of interestbetween the owners, where one or more ownersattempt to enrich themselves at the cost of others,may however tend to reduce the total value crea-tion in the company by wasting resources. Theowner is often not able to observe or control themanagement’s activities directly. The owners canalso lack knowledge as to what the best operatio-nal decisions will be. Accordingly, the manage-ment often has an information advantage that theycan use to pursue their own objectives, in prefe-rence to the owners’ desire for the highest possi-ble return on invested capital over time.

There is a comprehensive literature on theeffect of good corporate governance on companyvalue creation, but due to the complexity of thesubject, conceptual ambiguities and regional diffe-rences, it is difficult to point to unambiguousresults. There does however appear to be a broadsense that good corporate governance is impor-tant for value creation, and the literature is ten-ding to provide empirical support for this view5.

1 Harris, R.S., Jenkinson, T. and Kapland, S. N. (2013): «Pri-vate Equity Performance: What Do We Know?»

2 Ghai, S., Kehoe, C. and Pinkus, G. (2014): «Private equity:Changing perceptions and new realities.»

3 See, for example, Jensen, M. C. and Mecklings, W. H.(1976): «Theory of the Firm: Managerial Behavior, AgencyCosts and Ownership Structure.»

4 OECD (2004): «Corporate Governance Principles.»5 See, for example, Switzer, L. N. (2013): «Perceptions of

Board Alignment with Shareholder Interests and the Ope-rational and Stock Market Performance of Firms.»


2.1.3 Owner composition and owner types

The owner composition and owner types may besignificant for value creation in companies by cre-ating different incentives for exercising good cor-porate governance. Accordingly, different combi-nations of owner concentration, owner type andduration of ownership may influence the quality ofthe exercise of ownership6.

The benefit of a high concentration of owners-hip is that large owners are likely to be better pla-ced to assert their interests towards managementthan owners in a more fragmented shareholderstructure. A high concentration of ownership cantherefore reduce the agency costs. Conversely, ahigh concentration of ownership can make it moredifficult for the minority shareholders to asserttheir interests. Furthermore, a high concentrationof ownership will reduce liquidity in the shares.Liquidity is an important factor for investors, sincea high liquidity lowers the cost of exiting acompany. In addition, low liquidity provides poo-rer pricing data. Good pricing data can help disci-pline company management and reduce agencycosts, especially in the case of a fragmentedownership structure or other circumstanceswhere the owners have little direct control overthe management. For example, the FTSE 100index7 operates with a minimum requirement of25 per cent free float8, and it has been discussedincreasing this further. On the Oslo StockExchange, profitability of companies with highconcentration of ownership appears to be lowerthan for companies with low concentrations ofownership, whereas the relationship is moreinconsistent internationally6.

A key distinction between owner types is bet-ween indirect and direct owners. Indirect owners-hip means that the ownership is administeredthrough a third party, for example, a fund. Indirectownership is therefore at two removes of agencyfrom management instead of one. Institutionalownership can have positive effects in that, as arule, an institution will be larger and possessmore expertise than private individuals. On theother hand, direct owners, who administer theirownership themselves, have greater incentives formanaging their ownership well.

Another distinction between owner types isbetween public and private sector. The literatureprovides no clear answer as to whether privateownership provides a better return than publicownership, but some research does support thisperception9. The mechanisms behind this poten-tial phenomenon are unclear, but one possibleexplanatory parameter may be that the publicsector is an indirect owner10. Furthermore, a highpublic sector concentration of ownership in indivi-dual companies (which is often the case) mayhave an effect by reducing liquidity, which in turnmay affect market prices. It is important to notethat the conclusions will depend on factors suchas which market the research was done in andwhen.

The duration of the ownership will have conse-quences for its exercise. Long-term owners cancreate value by financing strategies that producelong-term, but not necessarily short-term, gains.On the other hand, long-term ownership can leadto less pressure on the management. Researchperformed on Norwegian stock exchange datagives some indication that indirect long-termownership yields lower returns, while direct long-term ownership yields higher returns. In listedcompanies, investors are typically divided into tra-ders, mechanical investors and value investors,according to how they allocate capital. Tradersattempt to achieve a return by picking the righttime to move in and out of shares. Mechanicalinvestors follow indexes and place capital passi-vely in order to achieve the market return. Valueinvestors are investors who seek to place theirmoney in companies which they believe, overtime, will produce a return due to the company’sfundamental value. How the shareholder stru-cture is defined by the different shareholder cate-gories may be significant for the company’s valua-tion, its liquidity and volatility, and may thereforeaffect the return.

2.2 What characterises good owners?

Value creation ensuing from capital allocation andcorporate governance will vary between the diffe-rent types of ownership models. The distinctionhere is between owners who primarily perform

6 Bøhren, Ø. (2013): «Eierne, Styret og Ledelsen.»7 The FTSE 100 is a share index of the 100 most valuable

companies listed on the London Stock Exchange. Thecompanies on the FTSE 100 represent around 80 per centof the market value of the exchange.

8 Free float refers to shares that are actually available for tra-ding.

9 See, for example, Wolf, C. (2009): «Does Ownership Mat-ter? The Performance and Efficiency of State Oil vs. PrivateOil (1987–2006).»

10 Shleifer, A. and Vishny, R. W. (1997): «A Survey of Corpo-rate Governance.»


capital allocation, long-term strategic investorsand owners with operational involvement; seefigure 2.1. The following expands briefly on whatcharacterises the main owners within each model.

2.2.1 Owners focused on capital allocation

These are owners who primarily maintain a diver-sified portfolio, with small shareholdings in eachcompany. They typically have investments of smallshareholdings in 100–5,000 companies. Thevalue-creation logic is centred around dynamicportfolio adjustments, with little involvement inthe companies invested in. In order to ensuregood diversification, the portfolio may well bespread over different geographical areas and dif-ferent asset classes.

These owners create added value by perfor-ming capital allocation based on profound exper-tise and insight into financial and capital markets.The ownership is exercised by having clear crite-ria and guidelines for the requirements they haveof the companies they invest in. Voting rights atgeneral meetings are used actively in order to pro-mote good corporate governance. These ownersare often adept at working with other sharehol-ders to achieve desired changes. If the companiesthey invest in prove not to meet the defined crite-ria or do not perform as expected, the sharehol-dings will be sold («voting with their feet»). Inrecent years, especially as a result of the financial

crisis, «tactical investments» have increased inscope. These are investments which try to eva-luate market timing more actively and achieve areturn on short-term investments.

2.2.2 Long-term strategic owners

These are owners who attempt to create value byadopting long-term strategic positions, and whosupport the portfolio companies’ managementand value creation. The typical long-term strategicinvestor usually has between 10 and 50 companiesin the portfolio, and shareholdings between 10and 100 per cent. The shareholding must be largeenough for the investor to have direct influence inthe companies, for example through board repre-sentation, so that it is possible to create addedvalue by taking part in defining the individualcompany’s direction.

With their profound knowledge of the indus-try and extensive familiarity with the individualcompanies, these owners seek to help improvelong-term returns from the portfolio. This requi-res an independent sense of companies’ strategiesand business models. Good long-term strategicinvestors work proactively to influence key strate-gic decisions. These owners will typically berepresented on the boards of the companies onthe portfolio. As part of their strategy follow-up,good owners will participate in promoting majorstrategic initiatives in the portfolio companies and

Figure 2.1 Three models of ownership.

I. Owners focused on capital allocation

II. Long-term strategic owners

III. Owners focused on operational involvement

Passive ActiveInvolvement in the portfolio company

Examplesof owners


will also provide support for strategy execution.The owners will typically set clear financial andstrategic objectives and follow them up.

Some strategic owners have a selection ofboard members whom they follow up throughboard seminars and other forms of competencebuilding. Furthermore, the board representativesmay be rotated through the companies in the port-folio, both as part of capacity-building andknowledge-sharing, and also to ensure that at anytime the boards have the right expertise for thechallenges which the particular companies face.

Typical examples of long-term strategicowners are Investor and Industrivärden of Swe-den and state holding companies such as Tema-sek (Singapore) and Khazanah (Malaysia).

To succeed with long-term strategic owners-hip, it is necessary to have a broad range of exper-tise, and it is crucial for the owners to have suffici-ent industry knowledge to follow-up the portfoliocompanies properly.

2.2.3 Owners focused on operational involvement

Owners focused on operational involvement try tocreate added value by concentrating on fewercompanies and using their expertise to supportcompanies at operational level. In order to capita-lise on the expertise they bring to the companies,such owners will primarily be sole owners or, as aminimum, majority owners. The portfolio will typi-cally consist of 10–50 companies.

Owners who are involved at operational levelwill actively undertake operational improvementsin partnership with the management. The ownerswill ensure that there are regular reviews of valuecreation in the portfolio companies, and they willdevelop ambitious plans which they follow up clo-sely. They will often drive functional thematicchanges across the portfolio, for example throughinitiatives aimed at cost control, recruitment andso forth. These owners will also seek to create andexploit synergies between the companies in theirportfolio, for example by having common procure-ment functions, IT solutions and other shared ope-rational solutions. The best of these investors aregood at building centres of excellence in differentareas which the companies in the portfolio canbenefit from.

Examples of such owners are the most activelyinvolved private equity investors and large conglo-merates such as General Electric.

The expertise required for good owners focu-sed on operational involvement will vary greatly,

depending on how they choose to be involved andwill depend on the individual company’s situationand strategy.

2.3 Trends and developments in the exercise of ownership

2.3.1 Polarisation between passive and active owners

Over recent decades, there has been a gradualtrend towards more fragmented ownership inlisted companies. Increased fragmentation ofownership means that the owners have fewerincentives (and reduced opportunities) for exerci-sing active ownership.

The increasing level of passive owners is con-nected with the increase in institutional owners-hip. Institutional owners, such as pension funds,insurance companies and mutual funds, own aconsiderable share of the world’s listed compa-nies.

Companies with a fragmented shareholderstructure and a predominance of institutionalowners are often referred to as «ownerless»companies, since they lack major direct ownerswith incentives for exercising active ownership. Insuch ownerless companies, a lot of power may beconcentrated with the management, and it may bedifficult to verify whether the management isacting on the basis of its own, potentially short-term financial incentives, or on the basis of long-term value creation for the owners. Institutionalowners have fewer incentives to work for long-term value creation due to generally shorter termpositions.

It is natural to draw parallels between thedevelopment of ownerless companies and theemergence of very active ownership communi-ties. Passive ownership and ownerless companieshave also been suggested as a contributory factorin the financial crisis.

Active ownership requires resources and the-refore entails a cost. Passive owners can therebyrealise a gain by having other owners assume thecosts of active ownership. Problems associatedwith passive ownership are reflected in a variety ofguidelines for corporate governance and companymanagement. The UK Stewardship Code, a set ofcorporate governance principles aimed at instituti-onal investors in the UK, established in 2010,requires that institutional investors have clearguidelines for the use of voting rights and thatthey report on voting activity. The UK Stewards-hip Code is monitored by the UK’s Financial


Reporting Council which requires institutionalinvestors to report on whether or not they adhereto the guidelines («comply or explain»). The pro-blems are also reflected in, for example, the Her-mes Responsible Ownership Principles from Her-mes Fund Managers11, containing principles forwhat companies should be able to expect frominvestors, including a constructive dialogue withthe board and management and a long-term viewin the exercise of ownership, including the use ofvoting rights.

2.3.2 Faster global industrial and techno-logical developments

Companies must take into account increasinglymore rapid changes in their surroundings andgreater uncertainty and volatility in the globalmarkets. This makes it more difficult to maintainstrategic competitiveness over time. For example,the companies’ average life time on the S&P 500has fallen considerably over the last century; seefigure 2.2. This trend is powered by a number ofdifferent factors.

Firstly, technological changes are occurringmore rapidly than before, and new technologiesare gaining footholds in the market ever more

rapidly. This means that innovations can quicklyalter the dynamics of a sector. Technologicaldevelopments may make companies which aremarket leaders today unable to withstand compe-tition tomorrow if the company does not adapt fastenough and act innovatively. A well-known exam-ple is Nokia, which was the world leader in mobiletelephony but which saw the value of its sharecapital reduced from 110 billion Euro to 15 billionEuro over five years after Apple, with the introdu-ction of the iPhone, changed the competitivelandscape.

Secondly, it is increasingly the emerging econ-omies which are driving growth in the global eco-nomy. The growth in demand in these markets ismaking them increasingly important, includingfor Western companies, and creating a need fornew expertise and experience. At the same time, agradual dismantling of trade barriers and increa-sed integration in the global economy has ensu-red that more industries have been opened up tocompetition.

Thirdly, the financial markets still bear themarks of the financial crisis of 2008, and theensuing debt crisis in Europe. In Europe especi-ally, the financial sector remains weak, and withlow expected future growth, there are reasons tobelieve that Europe faces considerable challen-ges12.11 Leading British investment firm established in 1983.

Figure 2.2 Average life time of companies on the S&P 500. Implied life time in number of years based on average loss of tenure over a 20-year period.

Source: McKinsey & Company.

90

2005 2020E

5-10?

15

1995

22

1975

30

1955

45

1935


In a world of keener competition and fasterchange, greater demands are made of manage-ment, boards, and owners to make good decisionsquickly. The management should be able to eva-luate operational opportunities and be more inter-nationally oriented. The boards should be closerto the strategy process and have adequate interna-tional expertise and experience. The boardsshould, moreover, be able to represent the long-term perspective in a world where CEOs arereplaced more frequently, and where greaterunpredictability means that management has toconcentrate more intently on short-term challen-ges. The owners should be prepared to assessdecisive strategic changes, acquisitions and othermajor investments with less delay.

2.3.3 Growth in long-term state ownership with expansive agendas

Large distortions in the global balances of tradehave led to substantial national wealth accumula-tion in individual countries and hence greaterstate ownership in commercial companies.Through large sovereign wealth funds, especially

in China and the Middle East, state agencies ownan increasingly larger proportion of the world’sshare capital. The extent of sovereign wealthfunds is shown in figure 2.3.

State ownership has also grown nationally,powered to a great extent by state acquisitions inconnection with the financial crisis. This applies inparticular to the financial sector where a numberof insurance companies and banks have been pla-ced under state control. Moreover, a number oflarge, substantially state-owned, companies haveexpanded globally. This scenario is especially evi-dent among Chinese companies but is alsoillustrated through, for example, the expansionsof Telenor and Statoil in the early 2000s.

State investment and pension funds are funda-mentally organised in the same way as large pri-vate funds and often operated under similar princi-ples. Many states also use state-owned enterprisesto protect national interests, for example by safe-guarding access to commodities or for promotingindustrial development in their own countries. InNorway, the national maintenance of key functi-ons in the country is an important argument forretaining majority or negative control (more thanone third) in certain Norwegian companies.

In many countries, there has been a professio-nalisation of state ownership, with clearer division12 IMF (2013): «World Economic Outlook.»

Figure 2.3 Sovereign wealth funds in the period 2007–2013. Capital under administration in USD billi-ons.

Source: Sovereign Wealth Fund Institute.

5 999

5 1474 859

4 1663 9244 061

3 265

+11 % p.a.

201312111009082003


of responsibilities between regulatory authoritiesand the state’s exercise of ownership. Communi-cation with the international investor market, inorder to explain how state ownership functions, ishugely important for trust in state ownership.Even if state owners act professionally and trans-parently, it will still be increasingly more impor-tant for them to be open and clear about the guide-lines which apply to their exercise of ownershipand how these are adhered to.

2.3.4 Greater expectations of responsible ownership

In recent years, increasing attention has been paidto a number of problems associated with owners’and companies’ social responsibilities. Environ-mental challenges, multinational companies’ rolein developing countries and corruption cases areareas which have received great attention.

At the same time, there has been a large incre-ase in funds and other investors focused on sustai-nable investments. Examples of such funds areOsmoris MoRE World, Generation and GSSustain. In addition, many investors who do nottreat sustainable investments as a separate con-cept have introduced better systems for reducingrisks relating to corporate social responsibility intheir portfolios.

In 2006, the UN Principles for ResponsibleInvestment were formulated. Adherence to theUN principles has increased to more than 1,200investors who, combined, administer capitalvalued at more than USD 34,000 billion; see figure2.4.

The fact that owners are increasingly emphasi-sing their social responsibility and associatedimproved routines for compliance, places morepressure on other owners to follow suit, as thereputational risk of not following the best exampleincreases. For owners, there is therefore anincreasing need to ensure they have good sys-tems and routines for monitoring corporate socialresponsibility in different areas, and many trendsindicate that this may become a competitiveadvantage for companies and shareholders in thefuture.

2.3.5 Increased awareness of the long-term value trend of companies

Many people have argued that the focus on short-term gains contributed to the financial crisis13.This crisis and the ensuing debt crisis in Europehave put a critical spotlight on short-term market

13 OECD Insights (2010): «From Crisis to Recovery.»

Figure 2.4 Number of investors who have signed up to the UN Principles for Responsible Investment.

Source: Principles for Responsible Investment.

0

200

400

600

800

1 000

1 200

1 400

0

5

10

15

20

25

30

35

40

Capital under administration 000’ billion USD# signers

Apr-13Apr-12Apr-11Apr-10Apr-09Apr-08Apr-07Apr-06


participants. Such turbulence also goes to under-mine confidence in companies and owners.

A survey14 of business leaders across a num-ber of countries shows that they experience pres-sure to produce short-term results, and 63 percent of respondents stated that the pressure hasincreased in the last five years. Nearly half repor-ted that they worked to a strategy with a time hori-zon of less than two years. At the same time, 73per cent of respondents stated that the planninghorizon should be three or four years or more. Itis therefore the case that a majority of businessleaders see the planning horizon as non-optimaldue to pressure from outside or from greatercompetition.

The boards will therefore be increasinglymore important for guaranteeing a long-term plan-ning horizon. The best boards are also increas-ingly involved in strategy work and spend morethan half their time on this.

2.3.6 Increase in activist investors

Activist investors represent a phenomenon thathas grown strongly in recent years. Capital admi-nistered by activist funds grew more than sixfoldin the period 2003–2013, and activist investors aretaking positions in increasingly larger compa-nies15. The growth has not shown any tendenciesto flatten out, so it is reasonable to assume thatthis is a trend that will continue in the yearsahead.

Activist investors are commercially orientedinvestors who acquire small shareholdings in acompany and attempt to increase the value of theinvestment by trying to force through changes inthe company’s governance. The objective for acti-vist investors is to buy into companies they beli-eve have a large potential for improvement andwith clear plans for measures to boost the compa-nies. If their plans fail to make an impact, they willattempt to force through their agendas by initia-ting a campaign against the management. Thevalue creation model of activist investors is to buyinto companies they believe lack good corporategovernance.

Typically in the USA, activist investors oftenprepare an in-depth analysis (a white paper) of thetarget company. Based on this analysis, detailedproposals or requirements are put forward whichthe management and board are requested to

implement16. The proposals might, for example,entail splitting of the business, the sale of subsidi-aries, larger dividends, arranging for acquisitionsand other transactions of a clear commercial andoperational character. The proposals are oftencombined with communication campaigns, TVappearances, shareholder letters, newspaperarticles, etc. Calculations by FactSet17 show thatactivist shareholders succeeded fully or partiallyin their campaigns in six out of ten cases in 2013.According to The Wall Street Journal, this was thehighest figure ever.

The activist investor trend is strongest in theUSA, but has also spread to Europe. However,compared with the USA, the campaigns of activistinvestors in the EU and Norway have been lessvocal. Activist investors have been active in theNordic region for a number of years; for example,Stockholm-based Cevian Capital took a 16 percent holding in Lindex in 2003 and replaced muchof the management18. In the Nordic region, thefrequency of activist actions looks set to increase,and Cevian is now the largest activist investor inEurope19. Internationally, there have also beencases where activist investors become involved incompanies with few dominant owners.

Activist investors are a controversial topic, theterm often has negative associations and they areoften criticised for taking short-term gains. Howe-ver, analyses indicate that activist investors gene-rally have a positive effect on companies’ returns,including in the longer term20. For managementand boards, attacks from activist investors arelikely to be unwelcome since they imply that themanagement should have done a better job. Forother owners, this may potentially be a benefit. Insome cases, activist investors will be invited in byother long-term investors or by concernedemployees who are dissatisfied with the manage-

14 Canada Pension Plan Investment Board and McKinsey &Company (2013): «Looking toward the long term.»

15 Hedge Fund Research Database.

16 Mellbye A. (2014): «Aksjonæraktivisme – et gode elleronde?» http://www.wiersholm.no/publikasjoner/Pages/Aksjoneraktivisme.aspx

17 FactSet Research Systems is an American company whichoffers financial information and analytical tools to professi-onal investors.

18 Becht, M., Franks, J. and Grant, J. (2013): «The Returns toHedge Fund Activism: An International Study.»

19 Activist Insight (2014): «Activist investing: An annualreview of trends in shareholder activism.»

20 Bebchuk, L. A., Brav, A. and Wei, J. (2013): «The Long-Term Effects of Hedge Fund Activism.» Brav, A. Wei, J.,Partnoy, F. and Randall, T. (2008): «Hedge Fund Activism,Corporate Governance, and Firm Performance.» The Jour-nal of Finance 63(4). Becht, M., Franks, J. and Grant, J.(2013): «The Returns to Hedge Fund Activism: An Interna-tional Study.»


ment21. In other situations, the threat of activistaction may itself prompt change.

2.3.7 Effective board work has become a more important competitive factor

Before the financial crisis of 2008, there was along period of stability and high economic growthin the global economy, often referred to as «TheGreat Moderation». Long periods under a favoura-ble economic climate placed relatively less pres-sure on the boards than is the case today. Theboards’ duties and responsibilities were thereforeoften limited, and many boards essentially restric-ted themselves to approving the executive’s pro-posals. The dot-com crisis, the financial crisis anda series of major bankruptcies contributed to con-siderably increasing the demands placed on theboards. In many jurisdictions, the formal require-ments have also been strengthened. The board isincreasingly being viewed as a crucial factor forthe company’s long-term success. The company’svarious support functions have gradually becomemore professionalised, and in many respects theboard is the last link in this chain.

This development has been driven by a num-ber of factors. As previously mentioned, the paceof technological development, globalisation andfinancial market turbulence have meant thatcompanies need to deal with greater uncertaintyand faster changes in the market than before. Inaddition, digitisation, globalisation and new busi-

ness models have made the companies morecomplex and therefore more difficult for theboards to control. More frequent changes to exe-cutive management mean that it falls to the boardsto safeguard the long-term prospects of thecompanies to a much greater degree. Followingthe financial crisis, the media also scrutinised theboards more carefully in the event of irregulari-ties in a company, with ensuing discussions of theboards’ qualifications and what they spent timeon.

McKinsey’s Global Board Survey 2013 indica-tes that many directors continue to find that theyhave insufficient time, knowledge and the appro-priate information to contribute effectively, butthat this is changing. Over the last five years, dire-ctors have found that the boards have becomemore effective, and the time spent on strategyactivities has increased. Nonetheless, the surveyindicates that board members believe that a furt-her increase in the time spent on strategy wouldproduce greater value for the companies in theyears ahead22.

The boards increasingly aspire to becomemore professional. At the same time, there areincreased expectations of the boards taking anactive role in order to be able to add value to theorganisation. High-functioning boards, which ope-rate as effective sparring partners and challengersto the management, will be increasingly moreimportant components of well-run companies.

21 Financial Times: (2014): «Executives take note: activistsare sometimes right.»

22 NYSE Governance Services (2014): «What Directors Think2014 Survey.»

Part IIPrerequisites for private ownership in Norway


3 Ownership in Norway

3.1 The Norwegian capital market – overview and figures

The capital market is a collective term for themarkets in equity and debt instruments (externalcapital). The market for external capital can bedivided in turn into bank debt and bonds.

A well-functioning capital market contributes,through different functions, to efficient resourceallocation over time and increased value creation.Among other things, the capital market facilitatesthe matching (of savings, consumption and invest-ments) over time, by linking those who want tosave with those who want to consume or invest,including in business and industry, and helps dis-tribute risk between market participants. Byissuing shares and bonds in the securities

markets, enterprises can finance projects and therisk can be spread across several investors andlenders.

The total capital stock of non-financial corpora-tions1 in Norway was around NOK 9,600 billion in2012, of which NOK 5,600 billion was debt andNOK 4,000 billion was equity; see figure 3.1. Nor-wegian companies therefore have a larger shareof their capital financed by external capital than byequity2. This proportion has been stable in recentyears. There has been a moderate rise in the valueof total balance sheet items, but given inflation

1 According to Statistics Norway, «non-financial enterprises»includes all corporations and quasi corporations that under-take market-oriented non-financial activities.

2 The figures for the listed share of equity represent marketvalue, while the unlisted share is book value.

Figure 3.1 The allocation between equity and external capital among Norwegian corporations.

Source: Statistics Norway

Balance sheet items for non-financial corporationBillion NOK

250

200

150

100

50

0

10 000

8 000

6 000

4 000

2 000

0

+ 6 % p.a.

2012

9 609

5 628

8 979

5 226

3 752

2009

8 235

4 855

3 381

2008

8 220

5 138

3 883

2007

7 302

4 312

2 989

2010

5 493

9 377

2011

3 982

3 082

External capital

Number of enterprises Equity

59

Share debt %

63 59 58 59 59

Number of enterprises (000’)


and economic growth in the same period, theannual growth is moderate (around 3 per cent inreal terms).

Compared with some other Europeancountries, the size of the Norwegian equity mar-ket, as a share of GDP, is around the average.Book equity comprised 53 per cent of GDP at thestart of 20143, whereas similar values for Sweden,Finland and the Netherlands, for example, weremore than 75 per cent. In addition, Norway has arelatively small external capital market for non-financial enterprises compared with other Euro-pean countries; see figure 3.2.

The Norwegian capital market has tended torecover quickly in the wake of turbulent periods.Following the dot-com bubble in the early 2000s,the capital market in Norway was affected to asmall extent, and although the financial crisis of2008–2009 almost halved the value of the OsloStock Exchange, Norway was one of the countrieswhich recovered fastest. To some extent, the lat-

ter may be due to the financial crisis in Norwaynot being followed by a fiscal crisis and high long-term unemployment, and to the sectoral composi-tion of the companies on the Oslo StockExchange, among other things.

3.1.1 The equity market

The equity market can be divided into private andpublic sector, and into listed and unlisted compa-nies. Figure 3.3 shows an overview of the owners-hip structure of equity in Norway. The figures forthe listed share of equity represent market valueat the start of 2014, while the unlisted share repre-sents book value at the start of 20124. Of total equ-ity, around 35 per cent is listed on the stockexchange, while around 65 per cent is unlisted.

3 Figures for the period 1990-2012 were obtained from thenational statistical offices of the countries included in theanalysis. The figures for 2013 are estimated by McKinseyMGI.

Figure 3.2 The markets for equity and external capital in selected European countries.

Source: Standard & Poor’s, Statistics Norway and equivalent national statistical offices for other countries in the analysis.

Equity market size is around average compared with other countries...

……while capital market for non-financial enterprises is somewhat less

Stock market value in per cent of GNP, 1990-2013 %

External capital in per cent of GNP, 1990-2013%

0

50

100

150

200

250

300

2013E10080604022000989694921990

Portugal Austria

Slovakia Greece Ireland

Belgium

Norway

Finland

Netherlands

Sweden

020406080

100120140160180200220240

1992 0494 96 98 2000 02 100806 2013E

4 Listed values are based on data from VPS – the NorwegianCentral Securities Depository. Due to limited data availabi-lity, the unlisted share of equity is estimated on the basis ofa variety of data points from Statistics Norway, Proff andBøhren, Ø. (2013): «Eierne, styret og ledelsen.» The statedvalues should therefore be taken as best estimates. As faras possible, attempts have been made to use publicly availa-ble sources, and these may differ from private databasessuch as the ownership database of BI Norwegian BusinessSchool.


This means that the majority share of equity inNorway is not listed on the stock exchange5. Ofthe listed equity, around 35 per cent is publiclyowned, primarily within public administration6,while 65 per cent is owned by the private sector,by financial enterprises, non-financial enterpri-ses7, households, foreign investors and otherowners. Of the unlisted equity, 30 per cent ispublicly owned. The remaining 70 per cent is pri-vately owned, and is distributed between instituti-onal, industrial and foreign investors, and familycompanies and households8.

On average, the stock exchange listed share ofthe equity market has yielded high returns in thelast decade. Between 2003 and 2013, the OsloStock Exchange produced an average annual

overall return of around 13 per cent, which is hig-her than the other Nordic stock exchanges. Thismay reflect which industries are relatively over-represented and under-represented on the Osloand other stock exchanges. The Oslo StockExchange has, however, experienced higher vola-tility. One reason for this may be that the stock-exchange-listed companies are relatively moreexposed to commodity prices, such as the pricesof oil and gas. During the financial crisis, the OsloStock Exchange had the highest fall in value ofthe Nordic stock exchanges9 (from September2008 to March 2009). Part of the fall may be

5 The proportion of unlisted equity is probably under-estima-ted since book values are generally lower than actual mar-ket values.

6 According to Statistics Norway, public administration con-sists primarily of the different ministries.

7 Hereinafter referred to as institutional and industrial enter-prises.

Figure 3.3 The equity market in Norway.

Source: VPS, Statistics Norway, Proff and Bøhren.

Public listed1 Public unlisted 3

Private unlisted 2Private listed1

Billion NOK

Industrial

Households

ForeignInstitutional Others

2 227

838

479

383 263 263

2 227

646

1 196

1 062

Public management 4

1 062

Publicmanagement

Publiccontrolledenteprises

646

641

5

Foreign

Households

IndustrialInstitutional

Others

1 196

682

206 169

71 68

1 Based on the market value of all listed shares registered in VPS at the entrance to 2014.2 Calculated as book equity to all corporations in Norway at the beginning of 2012, net equity to listed companies and equity of public unlisted companies. The distribution between ownership types are estimated based on Bøhren, Ø. (2013): «Eierne, styret og ledelsen.»3 Calculated as book equity to all public-owned enterprises at the beginning of 2012 (excluding equity to public administrative units), less equity to listed public companies.4 Public administration is considered here as all unlisted public equity.

A C

D B

8 The distribution between private owners of unlisted equityis estimated based on Bøhren, Ø (2013): «Eierne, styret ogledelsen.», since this is the most up-to-date source availa-ble. Since information is not available about the extent towhich ultimate or indirect owners are used, there may be adiscrepancy between the stated distribution and other sour-ces which use ultimate owners, such as Grünfeld, L. A. andJakobsen, E. W. (2006): «Hvem eier Norge?» Here,Bøhren's and Statistics Norway's categorisation of ownergroups is used.

9 Includes the Swedish, Danish and Finnish stock exchan-ges.


explained by a considerable weakening of theNorwegian krone in the same period.

The above illustrates some of the difficultiesthe Norwegian capital market faces from being asmall market with many foreign investors. Whenfinancial turbulence occurs in global markets,foreign owners often move capital back to marketswith larger and more stable currencies. This wea-kens smaller currencies, and was a major contri-butor to reinforcing the fall in value and increasein volatility on the Oslo Stock Exchange duringthe financial crisis.

In the stock market, continuous assessmentsare made of expectations of the market as a wholeand of the individual companies’ activities. Thishappens both in the primary market, i.e. asregards the price of new shares in connectionwith initial public offerings and capital increases(issues), and in the secondary market, via theongoing pricing of a company’s share capital. Boththe primary and secondary markets may yieldindications of activity on the stock market.

Activity in the primary market can be measu-red by the total volume of issues on the OsloStock Exchange. Oslo was clearly the most activestock market in the Nordic region in the period2005–2013, with twice the issue value and morethan three times as many IPOs as the Copenha-gen exchange, which was the second most active.In this period, 202 new companies were listed onthe stock exchange in Oslo, compared with 74, 56and 24 IPOs on the stock exchanges in Stock-holm, Copenhagen and Helsinki respectively. In2013, the companies listed on the Oslo StockExchange attracted more than three times asmuch capital as companies on the other Nordicexchanges. This is in spite of the fact that theissue volume in Oslo has fallen considerably inthe last two years, and in 2013 was well below the15-year average. It should however be mentionedthat the market for issues on the Oslo StockExchange has historically been highly volatile10.

The high level of activity on the primary mar-ket is powered by a number of factors, includingthe keen interest from foreign companies11. Thisrelates in particular to offshore and oil and gas,the maritime industry and the seafood industry.These are three key sectors in Norway, and thecompanies take a positive view of proximity to an

equity market that is knowledgeable about theirown sector. The Norwegian capital market is con-sidered to be among the world’s largest asregards these three sectors, especially in terms ofanalytical expertise.

Activity in the secondary market closely refle-cts the liquidity in the market. The liquidity of dif-ferent investments is of great importance for theinvestors’ investment decisions. A liquid marketfor a share provides a better profit and risk assess-ment of projects and undertakings, since moreinvestors implicitly make such assessmentsthrough continuous pricing of the shares. Statis-tics from the World Federation of Exchanges indi-cate that a number of European markets12 havebecome less liquid in recent years, following apeak just before the financial crisis. The annualtrade in shares on the Oslo Stock Exchange hasreduced from around USD 550 billion in 2007 toUSD 140 billion in 2013, corresponding to a fall of74 per cent. In the last two years, this fall hasmoderated which may indicate that the markethas normalised. There has been a correspondingtrend in the turnover rate13, in which most Euro-pean countries have experienced a market declinesince 2008. For Norway, in 2008, the averageturnover rate was around 155 per cent. This figurereduced to around 50 per cent in 201314. Thedownward trend was stronger for Norway than forthe other countries12, and the turnover rate in thelast two years has moved below the level of boththe Nordic9 and Swiss exchanges.

One of the reasons for the relatively strongdecline in Norway is the introduction of the EUMiFID (Markets in Financial Instruments Dire-ctive) in 2007, which allowed for the establish-ment of MTFs (Multilateral Trading Facilities).MTFs are marketplaces which allow trading inshares that are already listed on other exchanges.In recent years, Oslo Stock Exchange has there-fore had competition from other marketplaces inoffering trade in Norwegian shares, and the otherNordic exchanges in particular have taken someof the trade which formerly took place on the Osloexchange. Another reason is the increasing pro-portion of Norwegian shares traded via so-called«dark pools«15, where the volumes are not recor-ded on the Oslo exchange16.

10 Based on data from the Oslo Stock Exchange and WorldFederation of Exchanges.

11 Oslo Stock Exchange (2013): «Oslo har Nordens mestaktive kapitalmarked.» http://www.oslobors.no/Oslo-Boers/Om-oss/Presserom/Nyheter-fra-Oslo-Boers/Oslo-har-Nordens-mest-aktive-kapitalmarked

12 The Nordic countries, Austria, Hungary, Switzerland, Ire-land and Greece.

13 Measured as average turnover per month in relation to themarket value at year end.

14 Oslo Stock Exchange.


3.1.2 The external capital market

External capital is a collective term for debtinstruments which companies use for financing.Both turnover and issue activity on the Norwe-gian bond market have increased substantially inthe last decade. This has been driven primarily bytwo factors: firstly, market evaluations and regula-tory requirements have increased the costs offinancing through credit institutions. The compa-nies have increasingly also used the stockexchange to acquire loan capital. Secondly, thebond market has become more accessiblethrough the creation of Nordic ABM (formerlyOslo ABM) as an alternative marketplace forlisting and trading in bonds and certificates. Nor-dic ABM was launched in 2005 as a self-regulatingmarketplace, not subject to the regulations in theNorwegian Stock Exchange Act, which meansthat the listing process is somewhat simpler andthat issuers have a greater flexibility in terms ofchoice of accounting standards17. Nordic ABMhas contributed to a significant increase in issuevolume, and in 2013 had a 44 per cent share of theNorwegian volume of bond issues18.

3.1.3 Other characteristics

Beyond the general descriptions above, there areparticular features that characterise the Norwe-gian capital market.

The Norwegian capital market is largelyenergy driven. As the world’s third largest gasexporter and fifth largest oil exporter, Norway is aleading energy-producing and trading nation. Thisis also reflected in the capital market. For exam-ple, energy sector companies represent more than40 per cent of the value of the Oslo StockExchange. Although this is predominantly drivenby a few large companies, notably Statoil, the OsloStock Exchange is also large in terms of the num-ber of listed energy-related companies, with thesecond highest number in Europe. Over the lasttwo decades, oil service has grown to become akey segment of the energy sector. By the numberof listed companies, Oslo is currently the world’s

second largest exchange for oil service compa-nies19.

The Norwegian capital market is dominatedby a small number of sectors. Beyond the energysector, the maritime industry and the seafoodindustry in particular are substantial. The OsloStock Exchange has grown to become the world’ssecond largest shipping exchange and the world’slargest seafood exchange, which has made a sub-stantial contribution to the high level of shareissues in recent years. Since 2010, more than tennew shipping and seafood oriented companieshave been listed on the Oslo Stock Exchange20.

3.2 Asset management and ownership in Norway

3.2.1 Private ownership

Private ownership includes all ownership that isnot public, i.e. where the state, county authoritiesor municipalities are not dominant owners. InNorway, the majority of the capital invested inNorwegian companies is owned by private enti-ties, and according to Statistics Norway is prima-rily distributed between households, institutionalowners, foreign owners and industrial owners. Pri-vately owned companies can be either listed orunlisted.

Unlisted private ownership constitutes themajority, at around 65 per cent of private owners-hip; see figure 3.35. In contrast to listed compa-nies, unlisted ownership is relatively little analy-sed, less transparent and may be difficult to findgood up-to-date data on. This applies, for example,to family ownership, which represents a substan-tial proportion of private unlisted ownership.

Private ownership constitutes around 65 percent of the value of the Oslo Stock Exchange. Ofthis, the proportion of foreign ownership is high(37 percentage points) in comparison with othercountries. The share has gradually increasedsince 1995 when the EEA Agreement allowedforeign investors to own more than one third ofthe voting shares in Norwegian companies. Fore-ign owners are defined here as all investors regis-tered outside of Norway with shareholdings inNorwegian-registered companies. Institutionaland industrial owners own roughly the same amo-

15 «Dark pools» is a collective term for trading facilities whichoffer trading without showing order information, i.e. wheremarket participants can buy or sell large volumes withoutrisking other market participants finding out what is hap-pening and pushing the price up or down.

16 Pareto Securities (2014): «Det Nye Børslandskapet.»17 Oslo Stock Exchange (2011): «Nordic ABM. The Oslo Børs

alternative marketplace for fixed income securities.»18 Oslo Stock Exchange.

19 Oslo Stock Exchange (2014): http://www.oslobors.no/Oslo-Boers/Notering/Energi-shipping-og-sjoemat/Energi

20 Oslo Stock Exchange (2014): http://www.oslobors.no/Oslo-Boers/Notering/Energi-shipping-og-sjoemat/Ship-ping/De-nyeste-noteringene


unt of the value of the Oslo Stock Exchange at 9and 11 per cent respectively, while householdsown only 4 per cent. Institutional investors arethose whose purpose is to undertake financialinvestment activity, typically on behalf of clients.Industrial ownership includes all non-financiallimited companies and privately-owned enterpri-ses with the exception of households. Householdsare all private individuals who directly own part ofa company registered in Norway. The differentgroups of owners will be described in more detailbelow.

Norway has a low proportion of privateownership of shares compared with many otherEuropean countries; see figure 3.4. This must beviewed against the fact that the share of publicownership is higher in Norway than in othercountries. Like most other countries, Norway hasa considerable share of foreign and industrialownership, but a considerably smaller proportionof institutional owners and a low proportion ofowners among households compared with otherEuropean countries.

When it comes to unlisted private ownership,the situation is different. Foreign owners own a 17per cent share, while industrial owners and house-holds own 38 per cent and 22 per cent respecti-vely21.

3.2.1.1 Households and family companies.

According to Statistics Norway’s definition, hou-seholds include individuals or groups of personswho share the same dwelling, combine all or partsof their income and assets, and are consumersand who directly own part of a company registe-red in Norway (listed or unlisted)22. There arelarge differences in the households’ shares of theequity market between the listed and unlisted seg-ments.

For the listed segment, households own onlyaround 4 per cent of the value of the Oslo StockExchange, which represents low direct ownershipcompared with other European countries. The lowstock exchange holdings of households are due toa number of factors. Firstly, the structure of Nor-wegian households’ financial assets differs consi-derably from other countries, in that Norwegiansgenerally have little personal savings, in partbecause the state is a considerable saver. In addi-tion, the fact that Norwegian households owntheir own dwellings to a much greater extent thanin other countries must be taken into account. The

Figure 3.4 Listed shareholdings by type of owner in different countries. Measured by value. Data for Nor-way from 31.12.2013. All other data from 2007.

Source: Federation of European Securities Exchanges 2007, Proff and VPS.

37 41

14

38 31 3821

39 40 37

3510

10

8

11

13

26

11 24 2040

3025

9

29

23

2733

1924

19

4418

7

2716

720

13 12 1320

Austria Belgium Germany

100

Sweden

100

0 0 0

Industrial

3

Institutional

OthersHouseholds

100 100

UK

State

100

Foreign

Iceland Spain

100 100

5

Italy

100

3

France

100

2

Norway

100

44

21 Estimated based on data from Bøhren, Ø. (2013): «Eierne,styret og ledelsen.» In the book, households are denoted as«persons».

22 See Statistics Norway for a fuller explanation of who isincluded in households: http://www.ssb.no/a/publikasjo-ner/pdf/notat_201205/notat_201205.pdf


composition of savings must also be viewed in thelight of the Norwegian tax system, and that diffe-rent assets are valued differently.

For unlisted companies, households representa considerably larger proportion of total owners-hip with a share of around 22 per cent21. The diffe-rence in household ownership between listed andunlisted companies can essentially be explainedby the fact that nearly all Norwegian familycompanies are unlisted. A family company is defi-ned as a company where more than half of theshares are owned by people who are married to,are in-laws of, or are related to each other. Familyownership is widespread in Norway23. In 2011,around 65 per cent of all active Norwegian limitedcompanies were unlisted family companies, i.e.where the family owned at least 50.1 per cent ofthe shares. By including companies where thefamilies owned at least 33.3 per cent of the shares,the proportion increases to around 80 per cent.Although family companies represent a largeshare of the total number of limited companies inNorway, the companies are relatively small since,in the same year, they accounted for only 36 percent of employment, 19 per cent of turnover and13 per cent of assets24.

One characteristic of family-owned companiesis their high concentration of ownership. Forexample, the largest individual owner’s sharehol-ding is on average higher in family companies (79per cent) than in companies without family control(52 per cent). By combining the holdings of all themembers of one family into one holding, the lar-gest owner has on average a shareholding of 93per cent in family-owned companies20.

For family companies, the high ownership con-centration affects potential agency dilemmas. Thehigh ownership concentration causes high levelsof occupancy of inside positions, such as seats onthe board, chair of the board and managing dire-ctor. In 74 per cent of family companies, the lar-gest owner acts as both chair of the board andmanaging director, compared to only 12 per centin other companies. In this way, family companiesavoid part of the potential agency dilemma of pos-sibly divergent goals between owners and mana-gement, even though this presents other challen-ges, for example relating to the board’s gover-nance function.

Family ownership is considered to be stableand long term. A study by Menon Business Econ-omics from 2009 shows however that a low pro-portion of change of ownership from personsowning more than 33.4 per cent is to the benefit ofchildren or other relatives of the originalowners25. The study also points to surveys perfor-med by Statistics Norway in 1997 and 2003, whichshow that 27 per cent of family companies in 1997did not have this ownership status in 2003. Studiesfrom other countries show a similar pattern26.

3.2.1.2 Innovation and entrepreneurship

Entrepreneurs are part of the industrial owners-hip landscape. There are many definitions of whatan entrepreneur is27. Here it is defined as a per-son who establishes an enterprise, usuallyinvolving a considerable degree of risk.

One possible indicator of entrepreneurial acti-vity is the number of start-ups as a proportion ofthe total number of companies. This businessstart-up rate in Norway is relatively low comparedwith other countries. For example, Norway has aconsiderably lower business start-up rate thanother European countries such as Sweden,Luxembourg, Belgium and Austria; see figure 3.5.What is key for society and for value creation ishowever not the number of entrepreneurs andnew enterprises, but rather the value they create.In many cases, poor labour market opportunitiescan lead many people to create their own compa-nies, and it is therefore not obvious what a coun-try’s business start-up rate should be.

In 2011, Menon Business Economics investi-gated the most important sources of capital forstart-ups28. In the very earliest stages, the entre-preneurs’ self-financing is the most importantsource of capital. This may be in the form of unwa-ged work or a direct capital injection, from savingsor a private loan. Capital from the entrepreneur’scircle of acquaintances may also be important in

23 Berzins, J. and Bøhren, Ø. (2013): «Eierne, styret og ledel-sen.»

24 Bøhren, Ø. (2013): «Norske familiebedrifter: Omfang, eier-styring og lønnsomhet.»

25 Menon Business Economics (2009): «Eierskifter i norsknæringsliv.»

26 Harveston, P. D., Davis, P. S. and Lyden, J. A. (1997):«Succession Planning in Family Business: The Impact ofOwner Gender.» The Family Business Institute (2014):«Succession Planning.»

27 See for example Kirzner, I. M. (1973): «Competition andEntrepreneurship.» University of Chicago Press. Schumpe-ter, J. A. (1934): «The Theory of Economic Development:An Inquiry Into Profits, Capital, Credit, Interest, and theBusiness Cycle.» Harvard University Press.

28 Menon Business Economics (2011): «The need for govern-ment supported capital measures in the market for earlystage risk capital in Norway.»


the earliest phase. Loans can be an importantadditional source of capital for many start-ups. Ofthe potential high-growth enterprises in Menon’ssurvey, 60 per cent received loan financing in theirsecond year of operations. Other sources of capi-tal which may be important for a smaller selectionof companies with high growth potential mayinclude business angels and venture capital.

There are few sources of reliable and compara-ble international statistics on capital access forstart-ups. Sources for data on venture capitalinvestments are mainly based on national andregional venture capital associations, sometimesin cooperation with commercial entities. This canlead to differing answers to apparently simplequestions, depending on the data source used.International comparisons are difficult and eventhe harmonised data from the OECD must beinterpreted with caution29.

According to the OECD’s figures, Israel, theUSA and to some degree Canada stand out fromother countries in terms of venture capital invest-ments, both relative to population size and GDP.In 2012, Norway was the country with the world’sfifth highest venture capital investments relativeto population size, behind the three above-mentio-ned, along with Sweden, Luxembourg, Switzer-

land and Ireland. The venture capital investmentsconstitute around 0.3 per cent of GDP in Norway,which is about the average of the OECD countriesincluded in the survey. How the investments aredivided into the different phases in Norway, asdefined by the OECD, are also roughly the sameas the average of the other countries.

In a review of the Norwegian economy, theOECD points out that the business start-up rateand the number of self-employed people in Nor-way is low despite the low barriers to entry.Among possible explanations, they indicate lowunemployment, good welfare schemes and relati-vely high taxes. Since this is a result of deliberatepolicies aimed to some extent to achieving otherpositive political objectives, the OECD suggestsminor policy adjustments rather than major chan-ges. The proposals the OECD highlights for aNorwegian entrepreneurship policy are to main-tain the commitment to education in science,technology, engineering and mathematics, toassess whether a reduction in wealth tax mightboost entrepreneurship, to enhance technologytransfer offices (TTO) at Norwegian universities,to continue targeting broad competitive arenas forinnovation measures, to improve impact evaluati-ons of public subsidies and to evaluate whethercompetition policy should exclusively emphasisethe consumers’ interests30.29 OECD (2013): «Entrepreneurship at a glance.»

Figure 3.5 The business start-up rate in Norway. Business start-ups as a percentage of total number of companies in OECD countries.

Source: OECD (2014): «Economic Surveys: Norway.»

2001-03 2007-09

2004-06 2010

0

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20

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BRA ESP FRA LUX USA HUN NZL NLD PRT BEL AUT SWE NOR ITA JPN FIN


3.2.1.3 Institutional ownership

Institutional owners consist primarily of banks,financing companies, insurance companies,mutual funds, pension funds, private equity funds,and other investment companies31. Even thoughthe proportion of institutional investors in Norwayis relatively small, measured by the value ofownership, institutional owners are still an impor-tant source of capital.

Figures from VPS show that in 2012 institutio-nal owners owned 9 per cent of listed companyvalue in Norway32. For comparison, in 2007 pri-vate institutional owners owned 27 per cent of thevalue of the Swedish Stock Exchange, and 44 percent of the value of the London Stock Exchange.In addition, relative to GDP, Norway has limitedinstitutional ownership compared with othercountries. In 2011, the value of the shareholdingsof Norwegian traditional institutional owners33

was measured at around 70 per cent of GDP, lessthan one third of the equivalent figure for the UK,and one quarter compared with Denmark34.

One reason for the limited proportion of insti-tutional owners is that Norwegian householdssave relatively little as securities, and that savingsare mainly made through investment in their ownprivate houses. In particular, Norwegians havelow pensions savings since these are largely provi-ded by the state through the National Insurancescheme. Since the population can expect to enjoybeneficial National Insurance schemes in thefuture, this may limit the present perceived needfor independent savings35. This limits the use ofinstitutional investors. In other countries, this typeof saving may well be done through institutions,

thereby having the effect of boosting the share ofinstitutional investors.

3.2.1.4 Foreign ownership

Increased globalisation and ever-greater flow ofgoods, services and capital across national bor-ders have helped foreign owners become one ofthe largest groups of investors in Norway. Foreignownership is often divided into two types of invest-ment: direct and indirect. Direct foreign invest-ment means foreign companies acquiring owners-hip-based control of activities in Norway. Thisoften involves creating subsidiaries in Norway.This is distinct from foreign indirect investment,or portfolio investment, which primarily relates toshort-term involvement in the capital market36. Inthe figures below, Statistics Norway’s sharehol-ding limit of 20 per cent has been used to differen-tiate direct investments from portfolio invest-ments.

Direct foreign investment in Norway hasroughly doubled since the early 2000s, and ismore than ten times higher than in the early1990s. Historically, this major growth has occur-red primarily in connection with oil and gas activi-ties, and in sectors such as financial services,transport and manufacturing. In the 2000s, a lot ofthe growth was in other sectors such as buyingand selling, and operating real estate; see figure3.6. Although there has been considerable invest-ment in services relating to oil and gas extractionover a long period, this too has seen stronggrowth over the last decade. Whereas formerly itwas access to Norwegian natural resources thatbrought about the high growth in foreign invest-ment in the oil and gas industry, growth in recentyears has been driven extensively by resources inthe form of competence and technology, especi-ally among Norwegian oil service companies.

By value, Sweden has the largest proportion ofdirect foreign investment in Norway at 23 percent. This is followed by the Netherlands (14 percent), France (8 per cent), USA (7 per cent), UK(7 per cent), and Denmark (7 per cent). As a per-centage of total returns on all foreign investmentsin Norway, Sweden accounts for only 15 per cent,while the Netherlands (30 per cent), USA (16 percent) and France (12 per cent) have had relativelyhigh returns on their investments. This is proba-bly because different countries invest in different

30 OECD (2014): «Economic Surveys: Norway.»31 Bøhren, Ø. (2013): «Eierne, styret og ledelsen.» Definitions

of different funds: pension funds are funds where capital isset aside in order to provide pensions for the investors;mutual funds are group investments where many sharehol-ders join together to place their funds on the securitiesmarket; other investments funds might be, for example,venture capital.

32 Note that these proportions are assumed to increase if fore-ign institutional owners are included, since they are consi-dered to comprise a large share of foreign owners in Nor-way. They are, however, included in «foreign owners» inStatistics Norway's classification.

33 According to the OECD, traditional institutional owners aretaken to be pension funds, investment funds and insurancecompanies.

34 OECD (2013): «Institutional Investors as Owners: Who arethey and what do they do?»

35 Modigliani, F. (1986): «Life Cycle, Individual Thrift, and theWealth of Nations.» The American Economic Review 76(3),297-313.

36 See Ministry of Foreign Affairs: http://www.regjerin-gen.no/en/dep/ud/kampanjer/refleks/innspill/oeko-nomi/benito.html?id=493175


sectors. Whereas Swedish and Danish-ownedcompanies have historically had most employ-ment in retail trade and service industries, theenterprises with investors from the UK, USA,France and the Netherlands have been moreexposed to industry and especially the oil and gasindustry, where the return has often been higherthan in retail trade and other service industries37.

The extent of indirect foreign ownership canbe more difficult to measure. One indicator maybe how active foreign investors are on the OsloStock Exchange. Although foreign investors ownaround 37 per cent of the market value of thestock exchange, they account for a full 89 per centof turnover38. The largest share of the foreignindirect investors are international funds, whichto a large extent view the Norwegian stockexchange as an attractive opportunity for diversi-fying their portfolios across countries39 and for

achieving specific company and sectoralexposure. In contrast to more active owners,which largely exercise control by expressing theiropinions on the companies’ results at generalmeetings, such foreign investors exercise theircontrol through frequent buying and selling ofshares.

Foreign owners and their capital have played amajor role in Norway for a long time. From as farback as Norwegian industrialisation in the early1900s, foreign owners have been involved indeveloping business and industry in Norway,often in the form of relatively large and capitalintensive enterprises linked to the export indus-try. Examples of such companies are Orkla, NorskHydro, Findus, Lilleborg Fabrikker and Hafslund.Today too, foreign ownership accounts for animportant and increasing share of both the Nor-wegian capital market and Norwegian businessand industry. From 2000 to 2014, foreign inves-tors’ stock exchange holdings rose from 34 percent to 37 per cent. The number of foreign-con-trolled enterprises in Norway has increased by 38per cent, from 3,608 in 2000 to 4,979 in 2007. Thenumber of Norwegian-controlled enterprisesincreased by only 20 per cent in the same peri-

37 Emberland, B., Totland, E. and Tveita, O. (2009): «Norge ien globalisert verden – betydning av utenlandsk eierskap inorsk næringsliv.» Statistics Norway's Økonomiske Analy-ser 6/2009.

38 VPS ASA: http://www.vps.no/Om-oss/Statistikk/Utlendin-gers-handel

39 Bøhren, Ø. (2009): «Eierne, styret og ledelsen.»

Figure 3.6 Foreign direct investments in Norway.

Source: Statistics Norway.

Billion NOK

Foreign direct investment equity in Norway1

200

300

100

50

350

250

0

150

450

400

Oil and gas extraction

0908070605040302010099989796

Transport

9493929190 95

Retail fuel

Production

Turnover/operating property

Other

Financial Services

1989

6

28

12

26

11

29

14Total

17

1 Based on the most updated figures to SSB. Excludes direct investment in 2010, when industry affiliation for large parts was unknown to SSB. Note that the statistics range consists of the largest enterprises that have direct investments (SSB cutoff selection)

1989–99 2000–09

Annual growth rate%

12

7

7

14

21

2

9

10


od37. Within Norwegian industry, the number ofcompanies owned by foreign entities rose by 90per cent, from 2003 to 201040.

There are indications that foreign ownershiphas positive effects. In a doctoral thesis at the Nor-wegian School of Economics in 200641, RagnhildBalsvik analysed the effect of foreign acquisitionsin Norway in the years 1979 to 2000. The studyindicates that industrial companies with foreignowners are more productive on average than Nor-wegian industrial companies, and that enterprisesthat are acquired by foreign owners on averageincrease both productivity and employment fol-lowing acquisition. Other studies also indicatepositive effects. For example, research by MenonBusiness Economics shows that foreign-ownedcompanies in Norwegian industry perform relati-vely well in terms of value creation and employ-ment40.

3.2.2 Public ownership

The public sector has extensive ownership whichincludes both direct ownership in Norwegiancompanies and indirect ownership in foreign andNorwegian companies. The latter refers essenti-ally to the Government Pension Fund Global andthe Government Pension Fund Norway which areadministered by the Norwegian Central Bank andthe National Insurance scheme. In contrast todirect ownership, these investments are admi-nistered on the basis of a financial portfolio per-spective, and not based on a strategic ownershipperspective in the individual companies. The valueof the Government Pension Fund Global andGovernment Pension Fund Norway were respecti-vely NOK 5,110 billion and NOK 172 billion at 31March 2014.

In the following, only domestic public owners-hip is discussed. This comprises primarily thegovernment’s, the municipalities’ and the countyauthorities’ ownership. The ownership varies bet-ween different sectors and different types of busi-nesses.

According to Statistics Norway, public owners-hip concerns all unlisted and listed, financial andnon-financial companies where the state, muni-cipalities and county authorities directly or indire-ctly own more than 50 per cent of the paid-upshare capital, capital contributions or partnership

contributions and government and municipalbusiness operations. Public sector enterpriseswhich are defined as administrative units areexcluded. This means that independent, commer-cial companies where the state directly or indire-ctly has a large holding are considered to beunder public ownership. These are however inde-pendent legal entities which are not part of thepublic sector and which also, to some extent, havesignificant input from other owners.

The public sector owns a considerable propor-tion of the country’s economic activity. In total,around one third of all equity in Norway is ownedby the public sector, see figure 3.3, which is consi-derable compared with other OECD countries. Inrecent years, many of these countries have beenundergoing extensive privatisation processes.Outside the OECD, the proportion of publicownership is often higher. For example, Brazil,India, Russia and China have substantial privateownership, in the case of the last two around 30per cent of the country’s total share capital42.

The publicly-owned Norwegian equity is distri-buted between listed capital at around NOK 646billion and unlisted capital at around NOK 1,062billion. The listed part is owned primarily throughthe ministries and the Government Pension FundNorway. The unlisted part of public equity consti-tutes a relatively large proportion of the totalunlisted equity market (32 per cent43). The equityowned by public administration is distributedamong governmental, county and municipal enter-prises (where more than 50 per cent of paid-upshare capital are owned), and other governmentaland municipal business operations.

Compared with other countries in the Nordicregion, Norway has a larger public ownership.There are nonetheless greater similarities bet-ween the Nordic countries than with elsewhere inEurope. For example in 2013, Sweden had 42companies fully-owned by the state and 9 wherethe state was co-owner. The value44 of the Swe-dish state’s direct ownership is around NOK 540billion45. Finland also has considerable directstate ownership with 24 wholly-owned companiesand 36 companies where the state is a co-owner.

40 Menon Business Economics (2012): «Industrielt eierskap iNorge.»

41 Balsvik, R. (2006): «Foreign direct investment and host-country effects.»

42 Büge, M., Egeland, M., Kowlaski, P. and Sztajerowska, M.(2013): «State-Owned Enterprises: Trade Effects and PolicyImplications.» OECD Trade Policy Paper 147.

43 Estimated based on data from Statistics Norway.44 This includes all holdings under direct state ownership.

The value of the equivalent direct state ownership in Nor-way was around NOK 665 billion at the end of 2013.

45 Swedish Ministry of Finance (2013): «Rapport för bolagmed statligt ägande januari-december 2013.»


The value of the Finnish state’s direct sharehol-dings in the listed companies came to aroundNOK 140 billion at the end of March 201446.

The public sector has ownership interests incompanies operating in different industries. Interms of turnover, mining and resource extractiondominate, including the extraction of crude oiland natural gas, with Statoil and the state throughthe State’s Direct Financial Interest (SDFI) as theclearly largest entities. Companies which have apredominance of public ownership are also parti-cularly active in power supply, transport and infor-mation and communications services.

Municipalities and county authorities are sig-nificant owners in the Norwegian context, both inthe form of county and municipal administrationbut also as owners of limited companies. Muni-cipalities and county authorities have a largedegree of freedom to organise their services,whether as part of administrative activities orthrough the establishment of independent enter-

prises. Since the early 2000s, there has been anincrease in the establishment of municipal andcounty-level enterprises. From 2005 to 2010, forexample, the number of municipal enterprisesincreased by 10 per cent47. Although the start-uprate has decreased in the last three years, thistype of enterprise has become a larger part of thepublic ownership spectrum. The control of thesecompanies has increasingly switched from admi-nistrative management to corporate governance.According to KS (the Norwegian Association ofLocal and Regional Authorities)48, this is anundertaking that the municipalities have been lessthan successful with. According to KS, manymunicipalities lack control of their enterprises, inaddition to lacking concrete ownership strategies.

46 The Prime Minster’s Office of Finland: http://www.sta-teownership.fi/

47 KS (2010): «Anbefalinger om kommunalt eierskap.» Statis-tics Norway: https://www.ssb.no/statistikkbanken/Select-Table/hovedtabellHjem.asp?KortNavnWeb=stoff&CMS-SubjectArea=offentlig-sektor&StatVariant=&PLan-guage=0&checked=true

48 KS (2010): «Anbefalinger om kommunalt eierskap.»


4 Private ownership as a main rule

4.1 Why should private ownership be the main rule?

Private ownership is the main rule in Norwegianbusiness and industry. According to StatisticsNorway, at 1 January 2014 there were 526,703business enterprises in Norway. The predominantshare of these are owned by private entities.

The government believes that there are soundreasons why private ownership should be themain rule in Norwegian business and industry,and why state ownership should require specialjustification. In the government’s view, there are anumber of sound reasons why the state shouldexercise ownership of different companies. Thesewill vary from company to company, from an ini-tial premise that state ownership may help provideeconomic and social safeguards. Accordingly, forthe foreseeable future Norway will have conside-rable state ownership. An account of the justificati-ons for this is given in chapter 6.1.

Private ownership is a diverse concept cove-ring different types of holdings, for examplefamily ownership, employee ownership, institutio-nal ownership and ownership by private individu-als. Owners have different expectations and cancontribute to the companies’ value creation in dif-ferent ways, and the extent of owner involvementvaries from highly active owners, taking an opera-tional role in the companies’ businesses, to pas-sive financial owners with small shareholdings.

Although there is great variation between pri-vate owners, in the government’s opinion, privateownership is characterised by certain fundamen-tal factors that make it essentially well-suited tocontributing to value creation and improving Nor-wegian competitiveness.

Private property is fundamental to a well-functioning society. This should also create abasic premise for the ownership of companies andenterprises.

It is mainly private entities that initiate andsupport the foundation, ownership and operationof companies in Norwegian business and indus-try. In commercial enterprises in well-functioning

competitive markets, private owners will often bebest placed to be good owners.

Private owners can often more directly lookafter their own preferences and property, andexercise more direct personal ownership than thestate, which performs its role as an owner onbehalf of the community. In the case of a personalowner, there will normally be fewer decision-making steps between owners and managementthan if ownership is administered by institutions,for example by being involved in the board of dire-ctors or in the management. This indicates thatpersonal (private) owners may have strongerincentives for safeguarding their own interests.This can produce better corporate governance,higher profit expectations and more appropriaterisk management in line with the owners’ inte-rests.

Private owners can often be closer to themarkets and be better informed about themarkets’ needs and demands. This applies both toactive private owners who are involved in thecompanies they own, for example on the board,and to passive, more financial, owners who followthe companies’ developments closely on the basisof thorough financial and industrial analyses.

Private owners are likely to have strongerincentives for efficient operation and highreturns1. Private owners’ strong incentives interms of both cost reductions and innovation are afundamental argument for why private ownershipis more appropriate. This has been underpinnedby a number of empirical studies showing that, asa rule, privatisation leads to lower costs and hig-her quality2.

Deficient and unevenly distributed informationbetween companies and their owners, and diffe-ring incentives between management and ownersmay also indicate that private ownership is funda-mentally preferable. Those who set up and admi-

1 See for example Shleifer, A. (1998): «State versus PrivateOwnership.» Journal of Economic Perspectives, AmericanEconomic Association, vol. 12(4), pp. 133-150.

2 World Bank (1995): «Bureaucrats in Business.» OxfordUniversity Press.


nister companies often have more informationabout expected profitability and risk than externalcapital providers (asymmetric information). Thereare reasons to expect that the challenges of asym-metric information will be greater for the state asan owner than they will be for private owners.This has to do with the fact that private ownersmay, for example, be closer to the management(they themselves may sit on the board) or evenpart of management, and because they may havestronger incentives since they are investing theirown assets.

4.2 The challenges of state ownership

In the government’s assessment, the governanceof direct state ownership is handled in a professio-nal and responsible way. Through transparencyconcerning corporate governance principles,acceptance of the division of roles and responsibi-lities in corporate legislation, governance throughgeneral meetings and an emphasis on choosingcompetent and independent boards of directors,the exercise of Norwegian state ownership can beseen as advanced, including in an internationalcontext.

However, there are particular challenges asso-ciated with state ownership which tend to limit theextent of direct state ownership in commercialcompanies in functioning competitive markets,especially in areas where it is easy to distinguishbetween the state’s use of regulatory instrumentsand the producing enterprise.

Beyond the arguments in favour of privateownership referred to in chapter 4.1, the govern-ment would like to draw attention to three parti-cular challenges associated with state ownership:– Conflicts between ownership of companies and

the state’s other roles.– The risk of a concentration of powers which

weakens the private sector.– Limitations in industrial expertise.

4.2.1 The state’s different roles

There are potential conflicts between the exerciseof the role of owner of a commercial activity andexercise of the state’s other roles. This may giverise to adverse perceptions of the state’s roles andactions as an owner. When the state simultaneo-usly occupies the role of owner, purchaser and/orregulator, this may potentially weaken perceptionsof the state’s legitimacy and effectiveness in itsundertakings. In exercising state ownership in

Norway, the owning ministries responsible try tomanage their different roles in an open, orderlyand deliberate manner. In exercising governmen-tal and supervisory functions, the state will nor-mally not take account of its own ownership inte-rests. This is particularly the case where compa-nies under state ownership operate in competitionwith private market participants. Even if the stateis able to adopt sound mechanisms for dealingwith this issue, this is not necessarily sufficient forensuring the state’s legitimacy and creating trustthat competition takes place on fair terms. Inorder to avoid conflicts between roles, in areaswhere there are political objectives, it will beappropriate to try to achieve these objectives tothe greatest possible extent through the use ofinstruments other than state ownership. Wherethere are private market participants and well-functioning markets, the primary task of the statein respect of business and industry will be to facili-tate high levels of value creation in the economythrough stable, well-designed framework conditi-ons, rather than managing or owning businessactivities on its own account.

When the state owns companies, it needs toorganise itself in a way that creates confidencethat the markets’ requirement for equal treatmentof companies is respected. The roles can be refi-ned in such a way that the ownership function islodged with separate entities that do not haveother responsibilities which may conflict with theownership role. In order to help increase legiti-macy, supervisory activities are often delegated todirectorates and are thereby fundamentally sepa-rated from central administration. A second factorwhich promotes legitimacy is the EEA Agree-ment. Through the option of complaining toEFTA’s surveillance authority, the markets have atool which can be used in cases of doubt as towhether the state is favouring companies understate ownership. This helps both to protect third-party interests (for example competitors of state-owned companies) and to establish a process fordealing with cases where claims of favouritism ofstate-owned companies are made.

Historically, when the state has engaged incommercial activity, conflicts have also arisen bet-ween distribution policy concerns and corporateprofitability. In recent years, this has been counte-racted by the state having clearly communicatedthat its ownership will be exercised in a professio-nal and predictable manner in accordance withgenerally accepted principles for corporate gover-nance and company management, and throughclear legislative delimitation of how the state as an


owner may act on the basis of competitive inte-rests.

As long as the state has ownership interests, itis however effectively impossible for the state tobe organised and to act in such a way as to pre-vent or discourage doubt being raised about itsneutrality in exercising authority. It is thereforenecessary to continuously evaluate the justifica-tion and the scope of state ownership in commer-cial companies.

4.2.2 Concentration of power

In a democratic society, private initiative and wil-lingness to invest are the driving force for econo-mic development. The government believes thatthis is a particular challenge in a small countrysuch as Norway, where the state owns a large pro-portion of the financial capital. The extent of thestate’s direct ownership is considerable. The stateowns around one third of the value of the OsloStock Exchange through large holdings in someof the biggest companies. At the same time,through its other roles as policy maker, adminis-trative authority etc., the state exercises potenti-ally great power over citizens. Significant stateownership will therefore tend to increase the con-centration of power held by the public administra-tion at the cost of citizens. The government belie-ves that this is a factor that should be highly emp-hasised and that there should be a trend over timetowards the state reducing its ownership.

4.2.3 Limited industrial expertise

The state owns businesses in many sectors andindustries where the market conditions undergorapid change. Strong involvement of the owners inboard and management positions is often impor-tant in such cases. This requires considerableindustrial and market-related expertise.

Based on its different roles and in order toavoid political responsibility for commercial deci-sions, the state has chosen to refrain from partici-pating on boards. Although, as a major owner, thestate has considerable influence on the election ofboard members and sets out clear expectations ofthe companies, it can be difficult, solely on thebasis of an ownership position, especially conside-ring the sectoral diversification of companiesunder state ownership, to meet the need for activeowner participation in such companies. This, too,is an indication that direct state ownership shouldbe limited.

4.3 The government’s policy for strengthening private ownership

A diversified, competent ownership can helpboost value creation; see chapter 2. With this inmind, the government has an objective of strengt-hening private ownership in Norway and organi-sing policies to make it more profitable to esta-blish businesses, work, save and invest. Overtime, more new private enterprises and more pri-vate owners will contribute to the government’sobjective. The government also aspires to reducedirect state ownership over time, which may helpboost private ownership. The government willmake it possible for everyone to save and investand, through their ownership, participate directlyin and reap the rewards of value creation thattakes place in Norway. The objective is increasedvalue creation and more secure and productivejobs.

The government seeks to conduct a forward-looking policy that facilitates value creation andemployment in the Norwegian economy. It is theemployees’, the companies’ and the owners’ abi-lity to restructure and innovate that has made thecompanies competitive. The government will faci-litate the continuation of this trend through pre-dictable and advantageous framework conditions.This will help business and industry to achievegood competitiveness and the potential for morevalue creation.

It must also be attractive for foreign investorsto invest in Norway. Foreign owners contribute tocompetent, diversified ownership and a value-cre-ating interaction between companies and owners.They may also boost knowledge transfer andexpertise among Norwegian companies and pri-vate owners. It is therefore beneficial that foreigncompanies and investors want to invest in Nor-way, which is reflected, for example, in the highlevel of shareholdings of foreign investors on theOslo Stock Exchange, at around 37 per cent. Thisshows that Norwegian employees, owners andindustries are competitive.

For the foreseeable future, Norway will retainconsiderable direct state ownership. How thestate conducts itself as an owner is important forthe public’s and investors’ confidence in Norwe-gian companies and in the Norwegian capital mar-ket. The government will therefore conduct itsstate ownership policy in a responsible mannerthat provides space for and contributes to bothdiversity of ownership and value creation. Profes-sionalism and transparency in state ownership arefactors that may help strengthen confidence in the


Norwegian capital market and improve the pre-conditions for private ownership.

4.3.1 Framework conditions

Sound and predictable framework conditions arecrucial for business and industry and economicvalue creation. Company start-ups and invest-ments are often risk-prone and long term innature. Sound, predictable framework conditionscan reduce the risk of such decisions in generaland reduce capital costs in particular, and therebyincrease access to capital. Good framework condi-tions make Norway an attractive country for busi-ness investments among both Norwegian andforeign private owners.

The government’s business policy is to be for-ward-looking and contribute to the greatest possi-ble overall value creation in the Norwegian econ-omy. The policy shall facilitate both restructuringand innovation. Over time, the ability to restru-cture and innovate will contribute to efficientresource utilisation. This means that resourcessuch as labour and capital are employed wherethey are expected to yield high returns. This inturn will provide a sound economic basis for grea-ter welfare.

The government is working in many policyareas in order to create a framework which, as awhole, enhances the ability to restructure and inn-ovate, and hence improve competitiveness in theNorwegian economy. Key to this work are theeconomic policy, the Norwegian model whichoffers people security, including in the event ofrestructuring, and efforts to maintain well-functio-ning markets.

In its policies, the government will emphasisethat what is most important for ensuring healthyeconomic growth in Norwegian business andindustry is for the general economic policy to con-tribute to sound, stable and predictable fra-mework conditions. The policy must therefore bestructured so as to promote predictable andhealthy trends in prices, wages, interest,exchange rates and tax levels. This will alsoreduce uncertainty in the economy. General fra-mework conditions benefit all entrepreneurs,companies, employees and owners; they facilitatedesired restructuring and innovation, more effe-ctive markets, including the capital market, well-functioning competition, strengthened privateownership and more value creation.

The key to competitiveness is the overall fra-mework and its effect on the ability to restructure,innovate and create value. This should therefore

be viewed in context. The key framework compri-ses a predictable and effective tax system, effe-ctive infrastructure, opportunities for researchand innovation, facilities for entrepreneurship,access to skilled labour and access to capital.

The policy should be designed to make thecosts of restructuring as low as possible. Publicpolicy instruments should facilitate changes incorporate structure and production that yield bet-ter profitability. If business subsidies, protectionfrom international competition, use of marketpower or protective regulations prevent continuedand profitable restructuring and innovation, therestructuring processes may subsequently be farmore costly to society.

From a business policy standpoint, it is desira-ble above all to reduce those taxes that most inhi-bit value creation. However, account should betaken of what the tax revenues are used for. Someof the tax revenues are employed on growth-pro-moting measures which also benefit business andindustry and the establishment of new enterpri-ses. Examples of this are the education systemwhich creates skilled labour; research initiativeswhich provide access to new knowledge in Nor-way and from abroad; investment in entreprene-urship which contributes to the realisation ofideas as new goods and services; investments intransport which provide access to markets; andthe welfare state which provides security for peo-ple and looks after those who bear the costs ofrestructuring.

4.3.2 Tax

The tax system is a crucial economic frameworkcondition of great significance for Norwegianbusiness and industry and for private ownership.The government seeks to use the tax and dutiessystem to finance public goods, facilitate socialmobility, achieve more efficient utilisation ofresources, create better conditions for Norwegianbusiness and industry and strengthen privateownership. It must be profitable to work, save,invest, and start up, operate and develop compa-nies.

In order to achieve this, the tax system mustbe structured efficiently, and unnecessarilycomplicated rules which entail extra costs for taxpayers and the Norwegian Tax Administrationshould be avoided. A broad tax base of low taxrates offers more effective use of resources andlower costs to society through taxation than hig-her rates on a smaller tax base. Special schemesin the tax system aimed at specific types of invest-


ments, sectors or industries reduce the tax baseand hence tax revenues, and may come at the costof general growth-promoting tax reductions. Thiswill reduce the overall return on capital andlabour. Broad-based and diversified business andindustry benefit from wide-ranging tax breaks.The tax system thereby helps strengthen thebasis for private ownership and, through this, hig-her overall value creation in the Norwegian econ-omy.

The government took the first step in growth-promoting tax reductions in the national budgetfor 2014. Total tax reductions in the adopted bud-get came to in excess of NOK 7 billion. The gene-ral tax rate for individuals and companies wasreduced to 27 per cent, the wealth tax rate wasreduced to 1 per cent, while the minimum allo-wance was increased to NOK 1 million, and inheri-tance tax was abolished.

Lower taxes on ordinary income for individu-als and companies help make the economy moreexpansive because they increase the return onworking, saving, investing and setting up, runningand developing companies.

A lower wealth tax rate reduces the impor-tance of the low taxable value for housing andother real estate. This allows for a greater propor-tion of savings to be channelled into investment inbusiness and industry. The return on overallsavings increases, and private Norwegian owners-hip is strengthened. A lower wealth tax may alsoreduce any liquidity difficulties among privateNorwegian owners caused by taking out divi-dends from a company in order to finance thewealth tax. In addition, in the long term, some ofthe loss of revenue in income and wealth taxeswill be replenished due to more efficient use ofresources.

The inheritance tax was a challenge at genera-tional changes in family companies. The removalof this tax has therefore been long-awaited in thissegment of Norwegian business and industry inparticular. It facilitates the change of ownership infamily companies. The abolition of inheritance taxfrom 2014 onwards will ease the liquidity burdenin the case of generational changes, simplifytaxpayers’ obligations and reduce the NorwegianTax Administration’s administrative costs. Thechange may strengthen private ownership due tomore capital remaining in the hands of privateindividuals and family companies.

Through the Skattefunn scheme, business andindustry receive an extra tax allowance for rese-arch and development (R&D) costs. R&D canbring new knowledge and provide access to

knowledge generated abroad, and thereby contri-bute new insights and ideas to entrepreneurshipand innovation in new and established businesses.This can generate economic growth through newand improved goods, services and processes. Thegovernment aspires to stimulate an increase inR&D in business and industry, and in the 2014national budget substantially reinforced the Skat-tefunn scheme. The changes as of 2014 entailincreased options for tax allowances for busines-ses using the scheme. This should stimulateincreased R&D investment by reducing compa-nies’ R&D costs. Increased R&D investments mayhelp strengthen private ownership by allowinginnovation to spur the growth of new activities innew or existing companies.

The corporate tax rate is a significant part of acompany’s financial framework conditions, andmay be significant for where companies are loca-ted. In an increasingly more globalised economy,companies are more likely to move betweencountries than they were previously. The corpo-rate tax rate in Norway should therefore not besignificantly higher over long periods than therates in our neighbouring countries. In recentyears, several of our neighbours have reduced, ordecided to reduce, their corporate tax rate; seefigure 4.1. A high corporate tax rate in Norwaycompared with other countries will make it lessattractive to invest in Norwegian business andindustry, and increase the risk of Norway losingsome of its tax base due to tax planning.

The reduction of the corporate tax rate to 27per cent was a first step in the necessary adapta-tion of corporate tax to international develop-ments. There may be a need for further tax redu-ctions in order to strengthen the general fra-mework conditions for business and industry inNorway, and make the Norwegian tax base morerobust. The Scheel Committee has been asked toassess this in more detail. The Committee willsubmit its proposal for changes in the autumn of2014. Because the government wishes to reducethe tax and duty level, the Ministry of Finance hasasked the Committee to also assess alternativesthat produce net tax reductions. A reduction in thecorporate tax rate will make it more attractive toinvest in business, and thereby help to strengthenprivate ownership in Norwegian business andindustry.

The government will use the national budgetin the years ahead to implement further tax chan-ges to stimulate saving, business activity, privateownership, investment and entrepreneurship. Thegovernment will work for a simpler, more growth-


promoting tax system and will continue to priori-tise tax cuts that enhance Norwegian competitive-ness, private ownership, and secure productiveand value-creating Norwegian jobs. The govern-ment will also assess other measures to strengt-hen private ownership, including measures toincrease private savers’ ownership of Norwegiancompanies and measures to stimulate employeeownership.

4.3.3 Other measures

The work on simplifications for business andindustry and private individuals is a key area forthe government. This may help businesses andowners spend fewer resources on reporting andpurchasing of administrative services. This willmake it easier to start up and run a business inNorway. The government aims to reduce theannual cost to business and industry of complyingwith statutes and regulations by NOK 15 billion bythe end of 2017, compared with the cost level in2011, which represents a reduction of 25 per cent.Such measures will help reduce companies’ capi-tal requirements and benefit new and small enter-prises in particular. This may spur increasedinvestment and strengthen private ownership.

The government will work for increased entre-preneurship, which will also help new knowledgeto be employed in new goods, services and

processes in existing and new enterprises.Through the public funding agencies, the statecan provide advice and financing, and facilitate theuse of knowledge, expertise and networks for newideas, innovations, new business and internationa-lisation. By reducing the risk for private investors,in some cases, public capital can make it easier forstart-ups and other companies to obtain furtherprivate capital and thereby stimulate privateownership.

Public measures must often be financedthrough increased tax revenues, which may repre-sent a loss of efficiency. It is also important thatpublic funding does not displace private capital,reduce diversity of ownership, create adverseincentives, tie up resources in unprofitable activityor reduce the expected return on investments.One consequence of excessive public schemesmay be that companies do not gain access to theexpertise that may accompany private investment.It is therefore crucial for the state, as for privateinvestors, to be aware of where the input providesthe greatest value creation and how public fun-ding can be used to stimulate private ownership.The government will review the funding instru-ments and work towards an accurate and compre-hensive public funding system. The goal is a moreeffective use of resources and better impact fromthe business-targeted funding.

Figure 4.1 Corporate tax rates in selected countries. Per cent

Source: Ministry of Finance and International Bureau of Fiscal Documentation.

15

17

19

21

23

25

27

29

31

33

15

17

19

21

23

25

27

29

31

33

2000 2002 2004 2006 2008 2010 2012 2014 andstated goals

ahead

Denmark Sweden UK

Finland Norway

Part IIIThe state’s ownership administered

directly by the ministries


5 The present state ownership administered directly by the ministries

5.1 Overview

The state administers direct ownership in around70 companies through ten different ministries1.The ownership varies in size, from large holdingsin some of the country’s largest listed companiesto wholly owned companies with purely sectoral-policy purposes, and by the sector in which thecompanies operate. Under company law, theseenterprises are organised as limited liabilitycompanies, public limited companies, state enter-prises, health enterprises and other types of spe-cial law companies. The State Ownership Report,issued annually, provides an overview of thestate’s direct ownership as administered by theministries, and includes a review of most of thecompanies2. Readers are also referred to thecompany review in chapter 9 of this report, whichcovers the commercial companies and the keycompanies with sectoral-policy objectives underdirect ownership, 55 companies in all.

Table 5.1 List of the companies reviewed in the report, grouped by which ministry administers ownership

1 The ten ministries that administer the state's direct owners-hip are the ministries of: Defence; Health and Care Ser-vices; Local Government and Modernisation; Culture; Edu-cation and Research; Agriculture and Food; Trade, Indus-try and Fisheries; Petroleum and Energy; Transport andCommunications; and Foreign Affairs.

2 www.eierberetningen.no

Ministry of Defence Holding

Aerospace Industrial Maintenance Norway SF 100 %

Ministry of Health and Care Services Holding

AS Vinmonopolet 100 %

Central Norway RHA 100 %

Northern Norway RHA 100 %

Western Norway RHA 100 %

South-Eastern Norway RHA 100 %

Norsk Helsenett SF 100 %

Ministry of Local Government and Modernisation Holding

Kommunalbanken AS 100 %

Ministry of Culture Holding

Norsk Rikskringkasting AS 100 %

Norsk Tipping AS 100 %

Ministry of Education and Research Holding

Norsk samfunnsvitenskapelig data-tjeneste AS 100 %

Simula Research Laboratory AS 100 %

UNINETT AS 100 %

Universitetssenteret på Svalbard AS 100 %

Ministry of Agriculture and Food Holding

Statskog SF 100 %

Veterinærmedisinsk Oppdragssenter AS 34 %

Ministry of Trade, Industry and Fisheries Holding

Aker Kværner Holding AS 30 %

Ambita AS 100 %

Andøya Space Center AS 90 %

Argentum Fondsinvesteringer AS 100 %

Bjørnøen AS 100 %

Cermaq ASA 59.17 %

DNB ASA 34 %

Eksportfinans ASA 15 %

Eksportkreditt Norge AS 100 %

Electronic Chart Centre AS 100 %


The market value on the Oslo Stock Exchange ofthe state’s direct ownership was in the region ofNOK 552 billion at year-end 2013. Ownership ofStatoil constituted more than half of this, followed,

in terms of value, by Telenor, DNB, Yara Internati-onal, Norsk Hydro, Kongsberg Gruppen, Cermaqand SAS. At the same time, the state’s share of thebook value of equity in the unlisted companieswith commercial operations as their main pur-pose3, was estimated to be around NOK 113 bil-lion. This comes to a total estimated value of NOK665 billion for the state’s direct commercialownership at this time. It should however benoted that the book value of equity may vary con-siderably from the companies’ actual marketvalues. In addition to this are the investments inthe companies with sectoral-policy mandates.

5.2 Historical developments

The justifications and purposes of Norwegianstate ownership have changed over time. This factmust be seen in the light of changes in themarkets, changes in policy, improved knowledgeand economic trends. Historically, companieshave often come under state ownership as a resultof assessments and decisions made at particularjunctures. But a common denominator for stateownership has been the desire to safeguard thepublic interest. This has led to state ownership,with different time frames, in a range of differententerprises. As the motives and need for stateownership as a policy instrument have changed, anumber of liquidations of state holdings havebeen undertaken. There has been a trend towardssectoral-policy objectives being increasingly sepa-rated from the actual exercise of ownership.However, ownership in a number of companiesstill retains a sectoral-policy grounding.

The post-war era saw the creation of a numberof public corporations in the industrial sector.Access to foreign capital was limited, notably dueto restrictions on the movement of capital bet-ween countries. A limited private capital market inNorway and political aspirations for industrialexpansion were instrumental in the state’s contri-bution of long-term capital for industrial develop-ment. The state’s role in companies such as Årdalog Sunndal Verk (1947), Norsk Jernverk (1955)and Norsk Koksverk (1960) must be viewed inthis light.

When oil and gas extraction began on the Nor-wegian Continental Shelf in the 1970s, the aspira-tion of substantial ownership of the exploitation ofnatural resources was the rationale for stateownership of Statoil and increased holdings in

Entra Holding AS 100 %

Flytoget AS 100 %

Innovation Norway 51 %

Investinor AS 100 %

Kings Bay AS 100 %

Kongsberg Gruppen ASA 50.001 %

Mesta AS 100 %

Nammo AS 50 %

Nofima AS 56.84 %

Norges sjømatråd AS 100 %

Norsk Hydro ASA 34.26 %

Space Norway AS 100 %

SAS AB 14.3 %

SIVA SF 100 %

Statkraft SF 100 %

Store Norske Spitsbergen Kulkompani AS 99.94 %

Telenor ASA 53.97 %

Yara International ASA 36.21 %

Ministry of Petroleum and Energy Holding

Gassco AS 100 %

Gassnova SF 100 %

Petoro AS 100 %

Enova SF 100 %

Statnett SF 100 %

Statoil ASA 67 %

Ministry of Transport and Communications Holding

Avinor AS 100 %

Baneservice AS 100 %

NSB AS 100 %

Posten Norge AS 100 %

Ministry of Foreign Affairs Holding

Norfund 100 %

3 The companies in ownership categories 1, 2 and 3.


Norsk Hydro. Ownership also secured publicaccess to large revenues in the form of resourcerent.

A political desire to safeguard activities consi-dered to be strategically important has led to stateownership in a number of cases. Security andemergency preparedness concerns lay behindstate involvement in Raufoss Ammunisjonsfabrik-ker (later Raufoss ASA which demerged itsammunition activities in 1998 to create the Nordicammunition group, Nammo), Kongsberg Våpenfa-brikk (wound up in 1987, but the company’sdefence activities were continued and are nowpart of Kongsberg Gruppen) and Horten Verft(insolvency in 1987).

During the banking crisis of the 1990s, thestate took over the shares in a number of Norwe-gian banks, with the purpose of averting a moreserious banking crisis with unpredictable andpotentially major negative economic consequen-ces. The banks were later privatised through flota-tions, but the state has retained a 34 per cent hol-ding in DNB.

Many of the companies owned by the statewere previously organised as governmental agen-cies or public sector enterprises. The conversionto companies or independent enterprises hasmost frequently occurred through extensive regu-latory reforms. Examples of this are Statkraft andStatnett (1992, formerly Statkraftverkene) andTelenor (1994, formerly Televerket).

In the 2000s, ownership policy was characteri-sed by reorganisation of ownership through cen-

tralisation of major parts of the directly commer-cial holdings under state administration. Additio-nally, a number of companies were privatised,such as Arcus (2001/2003), BaneTele (2006/2009) and Secora (2012). The state’s holdingswere also reduced through stock-exchange listingof Telenor (2000), Statoil (2001) and Cermaq(2005). Furthermore, structural changes weremade both in companies with commercial objecti-ves and those with sectoral-policy mandates.

A number of sectoral-policy companies werecreated, through separation of activities, or mer-gers, or as new entities. Some of these enterprisesare economic policy instruments, including Enova(created in 2001), Innovation Norway (2004) andGassnova (2007). Other companies created inorder to cater for sectoral-policy concerns areSimula Research Laboratory (2001), Universitets-senteret på Svalbard (2002), Nofima (2008) andNorsk Helsenett (2009). Petoro was founded in2001 to manage the State’s Direct Financial Inte-rest (SDFI) in petroleum activities on the Norwe-gian Continental Shelf. At the same time, Gasscowas established as an operator of gas pipelinesand transport-related gas processing facilities.Eksportkreditt Norge AS was established in 2012to administer a government export credit scheme.

The regional health enterprises and theirsubordinate health trusts were set up from 2002onwards. The intention was to employ the corpo-rate form to achieve more efficient resource utili-sation in the hospital sector. The hospitals hadpreviously been linked to the county authorities,but with extensive state financing.


6 Why should the state own?

6.1 Justifications for state ownership

In the government’s view, private ownershipshould be the main rule in Norwegian businessand industry; cf. chapter 4. Direct state ownershipshould have a special justification.

The state exercises ownership for a number ofreasons. These will vary from company tocompany, from an initial premise that stateownership may help provide economic and socialsafeguards.

Beyond there being good reasons for stateownership, the state also possesses specific cha-racteristics which may make it a good owner in abroader perspective. These include the fact thatthe Norwegian state is a long-term and financiallystrong owner which is able to make a positive con-tribution to long-term ownership in the Norwe-gian capital market. Along with other long-terminvestors, the state can contribute to stability andstimulate growth of Norwegian companies andcompetence building over time. The state has akeen interest in the financial development of thecompanies, and has short-term expectations inthis regard. Equally though, the state can take alonger term view of its ownership than private sta-keholders, and therefore also emphasises thesound development of the companies over time.Where there are investment opportunities withanticipated returns and acceptable risk, the statehas the capacity to contribute to the necessarycapital increases even in times of financial turbu-lence. Accordingly, the state’s long-term owner-ship can act as a stabilising force in the Norwe-gian capital market.

The following is a review of the justificationson which the government believes state owners-hip should be founded. The formulations of obje-ctives for the state’s ownership in each individualcompany are set out in the company review inchapter 9.

6.1.1 Correction of market failures

Market failures are characterised by a discre-pancy between private and socio-economic profita-

bility. Such failures can lead to poor functioningmarkets, lack of useful production of goods andservices and financial loss to the economy. Marketfailures may have different causes, includingentry barriers, economies of scale and scope,external impacts on the supply and demand side,deficient competition and deficient or asymmetricinformation. Market failures may also be due toregulatory omissions (such as a lack of propertyrights), defective regulation that inhibits marketentry and creates adverse incentives and desiredregulations (in some areas markets are not desira-ble or not permitted). State ownership may serveas a viable instrument for correcting market failu-res.

For a society, it may be the case that somegoods and services should or must be producedother than through a freely competitive market.This may be true, for instance, for the productionof public goods or production in areas with naturalmonopolies. The electricity grid is an examplewhere there are considerable benefits of scale cre-ating a natural monopoly. Additionally, the centralelectricity grid is regarded as critical nationalinfrastructure where state control is desirable.This is achieved through state ownership.Through Statnett, the state owns the majority ofthe central electricity transmission grid. The cen-tral grid connects power producers and consu-mers in different parts of the country, safeguardscentral power exchange hubs in all regions andalso covers international connections.

External effects arise when one participant’sdecisions impact, either positively or negatively,other participants’ costs without this having beentaken into account during decision-making. Forexample, the benefit to society of research anddevelopment may be greater than the privatefinancial benefit. Another example is the potentialfor cluster effects which may affect the profitabi-lity of the (geographical) siting of a business. Pro-fitability may be lower for both the individualenterprise and society at large if the individualparticipant does not take account of overall profi-tability, but only his own activities. These exam-ples show that there are various forms of market


failure where intervention can be used in order toseek to increase the national economic benefit. Incases of market failure, precise and targeted mea-sures should be designed to provide better incen-tives, help increase the coherence of private andpublic profit and thereby also contribute to betterfunctioning markets, more efficient resource utili-sation and greater value creation. The state has avariety of instruments for stimulating research inbusiness and industry and rectifying other formsof market failure. State ownership should only beused to correct external effects or other forms ofmarket failure when other, more accurate, instru-ments are unavailable.

6.1.2 Maintaining important companies, head office functions and key competences in Norway

From society’s perspective, it may be desirable tokeep certain types of business in Norway. Forexample, some businesses may be considered orexpected to have (external) positive effects on therest of the economy. State ownership may be one

of several means of safeguarding and developingdesirable business activity and competence inNorway, and thereby contributing to increasedoverall value creation for society. The develop-ment of Statoil from 1972 until today being a goodexample.

The knowledge capital represented by employ-ees, owners, organisations and research instituti-ons is important for the competitiveness of Nor-wegian business and industry over time. Keyparts of a company’s competence, including itsresearch and development function, have traditio-nally been located in connection with its headoffice. State ownership can be used as a means ofkeeping head office functions in Norway. This isensured by owning at least one third of acompany, which means that the state, in itsownership role, can oppose changes to thecompany’s statutes.

Strategic decisions at corporate level willalways be taken by the company’s governingbodies, which are normally located at the headoffice. Maintaining head office functions is there-fore desirable both in Norway and in many other

Figure 6.1 Through Statnett, the state owns the majority of the central electricity transmission grid in Norway.

Photo: Statnett.


countries. For Norwegian business and industry,it is important that many small and large enterpri-ses are run from Norway. Norwegian head officesin important companies can help to safeguard anddevelop specialised industrial, technological andfinancial expertise and can also contribute to thedevelopment of Norwegian leadership skills. Stateownership can contribute to the development ofNorwegian business and industry as a whole if ithelps Norwegian businesses and technology to beretained in and developed from Norway. A sub-stantial contribution from the state in retaining,attracting and developing such knowledgeenvironments will be through a coherent policyfor making Norway an attractive country to con-duct business in. This will also help generate taxrevenues.

Companies are generally listed on the stockexchange of the country where their head officeis located, which is also where most of the trade inthe company’s shares will occur. This is onepotential positive outcome of making it moreattractive for companies to locate their headoffices in Norway.

Another reason for state ownership may be toguarantee continued production of goods and ser-vices of importance for national security, securityof supply or the protection of national sovereignty.Concern regarding strategic production hasbrought about state ownership involvement in anumber of different enterprises. Security andemergency preparedness considerations werebehind the state’s involvement in Raufoss Ammu-nisjonsfabrikker, Kongsberg Våpenfabrikk andHorten Verft. The state retains its ownershipinvolvement in enterprises that emerged fromthese companies through Kongsberg Gruppenand Nammo, and it is considered appropriate forthe primary activities of these companies to bekept in Norway. These companies are now co-owned with private shareholders.

On Svalbard, state ownership will be maintai-ned in companies which make a specific contribu-tion to supporting Norway’s Svalbard policy, withreference to White Paper no. 2 (2008–2009). Thisapplies for example to Store Norske SpitsbergenKulkompani, which is to be operated on acommercial basis and help maintain and developthe Longyearbyen community in a way whichunderpins the overall objectives of NorwegianSvalbard policy, and Kings Bay, which is a keyplayer in achieving the objective of developingSvalbard and Ny-Ålesund as a platform for Norwe-gian and international polar research.

6.1.3 Management of common natural resources

There has been broad political consensus forsecuring for the common good a large share ofthe wealth creation from the exploitation of natu-ral resources such as fisheries and aquaculture,hydroelectricity and petroleum. Over a longperiod, frameworks and institutions have beendeveloped in order to achieve this.

In some areas, other public means than stateownership has not been considered suffisient toensure control over and income from the coun-try’s major natural resources. The necessity ofstate ownership for achieving these objectives ishowever subject to debate, since much has chan-ged since these different resources were firstexploited. It is not feasible to move location-speci-fic natural resources abroad. Thus, regardless ofownership, the state is able to retain a degree ofcontrol over the resources and regulate theirmanagement in various ways, as well as secure areasonable share of the return and economic rentfrom the resource through taxation. Direct stateownership should therefore be evaluated overtime against other options, especially where thepreconditions are subject to change.

State ownership has been used as an instru-ment for securing Norwegian control of a varietyof natural resources. Statkraft SF and Statskog SFare examples of state ownership being used as aninstrument to safeguard the management of natu-ral resources in line with public demand and thecommon good. It may be the case, for example,that private commercial exploitation of individualnatural resources has a short-term perspectivethat is at odds with sound national economicexploitation over time. In order for the manage-ment of such resources to be for the commongood, consideration must be given to future gene-rations. State ownership can be used as an instru-ment to accommodate such concerns. Stateownership may also play a role in ensuring thatthe revenues from natural resources benefit thecommon good rather than individual stakehol-ders.

6.1.4 Sectoral-policy and societal conside-rations

State ownership can, in some cases, be justified onsectoral-policy grounds. This is especially relevantin areas where the state particularly wishes toexercise management and control, includinghaving the option to amend framework conditions


rapidly. Private owners may be wary of establis-hing businesses in such areas, since the potentialfor changes in framework conditions (the politicalrisk) may be considered too great. State-ownedcompanies may be used as potential instrumentsin particular policy areas. Specific sectoral-policyobjectives may impose requirements on the indivi-dual company concerning, for example, its sphereof activity and products, availability, quality, ser-vice and prices of goods and services. Vinmono-polet, for example, is used as an instrument inalcohol policy to restrict and control the availabi-lity of alcohol. The state also has a special respon-sibility for safeguarding dependable national infra-structure such as airports and power grids. This iscurrently achieved through ownership of Avinorand Statnett. There has been a trend towardsmore differentiation of the state’s different typesof responsibility, e.g. responsibility for financingand for production. In some cases, responsibilitycan be shared, with the state taking on the finan-cing liability, while production is put out to tenderand performed through public procurement.

There are, for example, sectoral-policy con-cerns behind state-owned hospitals. The objectiveis to lay the foundation for cohesive managementof the specialised health service, through, forexample, legislation of an explicit governmentalresponsibility. State ownership also aims at facili-tating better utilisation of the resources investedin the sector, thereby securing better health ser-vices for the entire population. In parts of thehealth, education and transport sectors, the obje-ctive has been to provide an fair basic service toall citizens, regardless of ability to pay. Throughits ownership of, for example, Norsk Rikskring-kasting and theatre enterprises, the state hasaimed to secure cultural-policy objectives.

State ownership can also be seen in the light ofa commitment to equal access and secure provi-sion of certain services regardless of demand,place of residence, willingness and ability to payand other status. Such justifications for stateownership must be viewed in context with theambition of meeting sectoral-policy concerns, anda case-by-case assessment must be made of whet-her state ownership is the most appropriate of the

Figure 6.2 Since its establishment in 1972, Statoil has developed into a leading global petroleum company.

Photo: Kim Laland and Statoil ASA.


instruments available. Even if the state sees it asits role to safeguard a service, and potentiallysecure its financing, there may still be alternativesto state ownership. These may include public pro-curement by tender and public-private partners-hips. Technological and societal advances mayhowever alter the preconditions, as has happenedin the telecommunications sector, for example.

In the event of certain crises, state ownershipmight be the only suitable means of protecting theinterests of the society. Such interventions will bethe exceptions. Any state intervention will have tocomply with the provisions concerning state aidunder the EEA Agreement. In individual instancesof crisis, the state has intervened on the owners-hip side. During the banking crisis of the early1990s, the state became the sole owner of thethree largest commercial banks, followingattempts at solutions using private capital. Thepurpose was to avert a more serious banking cri-sis. Shareholdings were subsequently disposed of,two banks were sold, one part-privatised, and thestate is currently left with a 34 per cent sharehol-ding in DNB. Other countries have also had to

take ownership of banks as a result of various cri-ses. In the wake of the last financial crisis, measu-res have been implemented, and prepared forimplementation, in many countries to enhance thesolidity of the financial industry. These measuresreduce the risk of finance institutions and thefinancial markets in general and might reduce theneed for last-resort state intervention during cri-ses.

6.2 Alternative instruments to state ownership

Each case should be individually assessed todetermine whether ownership is the most effe-ctive instrument for the state in order to achievethe goal in question. Such assessments can bemade by weighing benefits and costs againstpolicy objectives. They should be performed regu-larly, as preconditions may change over time.There has been a trend that safeguarding certainobjectives through ownership has been replacedby regulatory instruments such as licensing rules,

Figure 6.3 Statkraft is Norway’s largest power producer, with around one third of total national produ-ction.

Photo: Statkraft.


legal acts and regulations. As sectoral-policy justi-fications for state ownership can change overtime, the pursuit of policy objectives can be diffe-rentiated from the actual exercise of ownership.The importance of ownership for regulating themarket through management companies is redu-ced and in some sectors ceased. Licensing provisi-ons can ensure, for example, that requisite ser-vices are made available to all, even without publicownership. Incentives, new technology and incre-ased competition in larger and more integratedmarkets mean that the various objectives can nowbe achieved more effectively through suchavenues as the market, legislation, regulation andlicensing terms than through state ownership ofthe supplier.

Other options include linking subsidies andcharges to specific patterns of action, contractmanagement and public procurement. The statecan manage its companies by signing agreements

in the same way as with private companies. Con-tract management may entail production of speci-fic types of goods or services, or fixed prices tousers, in return for payment from the state. Suchagreements can be signed on a commercial basiswith commercial companies, concurrently withthe state’s pursuit of its sectoral-policy objectives.Tendering regulations can define requirementsfor tenders, seeking to achieve cost efficiency andefficient allocation of resources. An example ofthis is a number of air and bus routes being regu-larly put out to tender to ensure a broad transportservice in all parts of the country. This approachprovides a clearer distinction between the sup-plier role (for example, as a sectoral-policy instru-ment) and the owner role. Furthermore it enablesprivatisation of companies as the pursuit of thepolicy concerns is no longer linked to ownership.

6.3 Categorisation of the companies under direct ownership

Since 2006, the state’s portfolio of companies hasbeen categorised into four different categories.The categorisation has been based on the state’sjustification and objectives for direct state owners-hip; cf. chapter 6.1. The government believes thatthe ownership categorisation system has helpedclarify the state’s objective for ownership of theindividual company and that the current four cate-gories are appropriate. As such, the governmentintends to maintain the current categorisation.The specific categorisation and the formulation ofthe state’s objectives in each company are statedin chapter 9.

The four categories are:1. Companies with commercial objectives.2. Companies with commercial objectives and

objective of maintaining head office functionsin Norway.

3. Companies with commercial objectives andother specifically defined objectives.

4. Companies with sectoral-policy objectives.

Category 1 – Companies with commercial objectives

This category includes companies where thestate’s ownership objective is purely commercial.The administration of ownership of the companiesin this category has the sole purpose of maxi-mising the value of the state’s investments, nota-bly through contributing to sound commercialdevelopment of the companies. Whether the state

Figure 6.4 Vinmonopolet is used as an instrument in alcohol policy to restrict and control the availa-bility of alcohol.

Photo: Erik Thallaug and AS Vinmonopolet.


should remain an owner of these companies is thesubject of continuous commercial assessment.

Category 2 – Companies with commercial objectives and objective of maintaining head office functions in Norway

This category includes companies where the statehas a commercial objective with its ownership,and an objective of maintaining the companies’head offices and associated head office functionsin Norway. To achieve this last objective, a share-holding of more than one-third is (normally) suffi-cient.

Category 3 – Companies with commercial objectives and other specifically defined objectives

This category includes companies where the statehas a commercial objective in its ownership, andwhere there are other societal justifications forstate ownership than maintaining the head officein Norway.

A common feature of the companies in cate-gory 3, as of the companies in categories 1 and 2,is that they operate in competition with other busi-nesses on a commercial basis1.

For most of the companies in category 3, thesituation will be rather similar to category 2, withno need for special follow-up in the administrationof ownership in order to achieve the specificallydefined objectives. The objectives are achievedthrough the company running its business on acommercial basis within the sector in question.

Based on the state’s objective for its owners-hip, individual guidelines for activities may be setout for some companies. To obviate doubt thatthese companies are operated on a commercialbasis, the sectoral-policy administration will pri-marily be provided through regulations, licensingrules and public procurements from the compa-nies on commercial terms.

Category 4 – Companies with sectoral-policy objectives

The state’s ownership of the companies in cate-gory 4 has primarily sectoral-policy objectives.The objectives for these companies should beadapted to the purpose of ownership in the indivi-dual company. As an owner, the state will strive toachieve its sectoral-policy objectives as efficientlyas possible.

1 For some companies, certain parts of their activities maybe exempt from competition.


7 What should the state own?

The government aspires to facilitate diversifica-tion and value-creation in Norwegian businessand industry, and to strengthen private owners-hip; see chapter 4. This will help improve Norwe-gian competitiveness. Accordingly, over time, thegovernment wishes to reduce the state’s directownership interests. This will particularly apply tocompanies where the state has no particular rea-sons for being an owner, but it may also be appro-priate to reduce the state’s holdings in othercompanies, assuming this can be done within aframework that safeguards the objective of theownership.

The government points to the fact that theambition of reducing the state’s direct ownershipover time is not a budgetary matter, but relates tothe factors described in chapters 4.1 and 4.2. Theallocation of capital freed up from any reductionsin the state’s holdings must be understood on thebasis of the frameworks drawn up for the adminis-tration of the state’s financial assets.

A desire to secure control of natural resour-ces, maintain the presence of key companies inNorway and safeguard sector-policy interests sug-gests that the state will retain a substantial portfo-lio of holdings for the foreseeable future. Thegovernment will administer its holdings in a pro-ductive and professional manner, and will be opento transactions that may enhance the value of thecommercially oriented companies.

The changes that the government wishes toimplement over time in the state’s direct owners-hip are detailed below. Please also refer to thereview of companies in chapter 9.

7.1 Changes to the state’s ownership

7.1.1 Reduction in the state’s direct ownership over time

The government believes that the state should nothave a long-term ambition of ownership in compa-nies where the state’s objectives are purelycommercial. In the government’s opinion, overtime, other owners will often be better at develo-ping such companies. On this basis, in the budget

proposal to the Storting for 2015, the governmentwill ask the Storting for a mandate to fully or parti-ally divest the state’s ownership of companies incategory 1. For some of these companies, thegovernment already has such mandate.

The government emphasises that, eventhough the state should not have a long-termambition of owning such companies, any changesin the state’s holdings will be made only if it is con-sidered to be financially beneficial to the state.Furthermore, there may be corporate or market-related factors entailing that the state shoulddelay use of these powers.

The companies in category 2 are commercialcompanies where the objective of the state’sownership, beyond a return on invested capital, isto retain head offices in Norway. This is achievedprimarily through a holding that ensures negativecontrol, i.e. more than one-third. The govern-ment’s premise will therefore be that it will not beappropriate to reduce the state’s holdings in thesecompanies to below 34 per cent. To the extent thatthe boards or others suggest value-creating indus-trial solutions that may only be realised through areduction in the state’s holding to below 34 percent, this would be subject to a detailed assess-ment of the commercial benefits and potential forsafeguarding the state’s ownership objective. Anymatters of this nature will be brought before parli-ament.

There may be special factors dictating why thelower threshold for the state’s holding in indivi-dual companies in category 2 deviates from 34 percent. This applies to, for example, Statoil ASA,Aker Kværner Holding AS and Nammo AS. Thefirst of these relates to Statoil’s sale of the state’soil and gas along with its own, while for the othertwo, the state has signed shareholder agreementswith industrial partners. Another relevant factor isalso whether or not the companies are listed on astock exchange. In companies where ownership isnot diversified, it may be necessary to have a lar-ger holding to retain sufficient ownership influ-ence.

Category 3 includes companies where thestate has a commercial objective in its ownership,


and where there are other justifications for stateownership than maintaining head offices in Nor-way. The government believes that there aresound justifications for the state to have holdingsin these companies. Nonetheless, for companiesin category 3, there may still be scope for adjust-ments to and changes in the state’s ownershipbased on commercial considerations, and in a waythat also takes into account the state’s rationalefor ownership in these companies. Any specificmatters will be brought before parliament.

The state’s holdings in the sectoral-policycompanies in category 4 should, as a rule, remainintact. This does not however prevent changes ifthe sectoral-policy interests no longer apply, orcan be fulfilled in another satisfactory mannerthrough the use of instruments other thanownership. Telenor and Statkraft are examples oflarge businesses that have transitioned from stateenterprises to companies subject to commercialcompetition. A more recent example of a transi-tion from category 4 to category 1 is Ambita (for-merly Norsk Eiendomsinformasjon).

7.1.2 Value-increasing transactions

The primary objective of the administration ofownership in the commercial companies is a highreturn on invested capital over time.

As an owner, in principle, the government willtake a positive view of strategic initiatives andtransactions that may be expected to contribute tovalue growth in the companies and that are alsoimplementable within a framework that safegu-ards the objective of the state’s ownership.

In a global economy where complexity is onthe rise and where innovation and advances intechnology are fast-paced, it is challenging forcompanies to maintain and strengthen theircompetitive positions over time. Successfulcompanies need to be agile and to have a goodunderstanding of strategic and competitive oppor-tunities that arise as the business climate evolves.Such reorganisation may also require participa-tion from the owners, for example, through inje-ction of capital, mergers and acquisitions, orthrough the addition of new types of expertise onthe owner side.

The government emphasises that, as anowner, the state should conduct itself so as toallow the companies to exploit good commercialopportunities, and will therefore actively assessany initiatives proposed by the companies, provi-ded they are judged to be commercially beneficialand take into account the objective of the state’s

ownership. On this basis, and in order to reducethe state’s direct ownership over time, the govern-ment will be open to possibly reducing the state’sholdings in two of the companies in category 2.

On this basis, in the budget proposal to theStorting for 2015, the government will ask theStorting for a mandate to possibly reduce thestate’s holdings in Kongsberg Gruppen ASA andTelenor ASA, down to 34 per cent.

Any changes in the state’s holdings that mayincrease value to the state and improve the indus-trial foundations of the companies in category 2and where there are shareholder agreementsregulating the state’s ownership, i.e. Aker Kvær-ner Holding AS and Nammo AS, must be assessedin light of these agreements. It is therefore notproposed to adopt such mandates; see chapter7.1.1. In DNB ASA, Norsk Hydro ASA and YaraInternational ASA, the state’s holdings are pre-sently very close to 34 per cent, and it is not consi-dered appropriate to propose having a mandate toreduce the state’s ownership in these companies.

As concerns the government’s assessmentsrelating to the companies in categories 3 and 4,readers are referred to chapter 7.1.1.

Only in very special circumstances will thegovernment assess increasing the state’s holdingsin partly owned companies. Nor does the govern-ment consider it relevant for the state to be pro-active in acquiring new strategic positions incompanies subject to competition. The experien-ces from the state’s attempts at industrial develop-ment during the second half of the last century donot indicate that the state is the best actor for furt-hering economic growth through direct owners-hip. Only in extraordinary cases will the govern-ment consider undertaking new state ownershippositions. Such an undertaking would have to becarefully assessed and justified on the basis ofeconomic profitability and broader considerati-ons.

The government would also draw attention tothe state’s other instruments and policies for facili-tating diverse and value-creating business andindustry in Norway.

7.1.3 Demergers and the creation of new state companies

The government is committed to state productionactivities being carried out efficiently, using anappropriate management and organisational stru-cture. Against this background, the governmentmay consider reorganisations of state enterprisesand the establishment of new companies, predica-


ted on new state ownership being established onthe basis of economic profitability or certain speci-fied objectives. For example, since the change ofgovernment, the Ministry of Transport andCommunications has worked to facilitate a num-ber of major reforms in the transport sector. Forthe roads, the government is working to set up adevelopment company, with the object of underta-king more road projects and making road expansi-ons more efficient. The reform activities also aimto reorganise Jernbaneverket (the NorwegianNational Rail Administration) and NSB (Norwe-gian State Railways) in order to achieve an appro-priate administrative structure, a commercialorganisation and clear goals.

7.1.4 Factors to be emphasised in the event of changes to the state’s ownership

The government stresses that it is crucial for anychanges in state ownership to be carried out in amanner that is professional, commercially justifia-ble and which protects the value of the state’sassets.

In deciding on changes in the state’s owners-hip, the government will assess both market-rela-ted and company-specific factors. The govern-ment will not make any changes to the state’sownership or support any transactions that arenot considered financially beneficial for the statein each individual case. This implies, among otherthings, that reduction in the state’s direct owners-hip will take place over time.

The powers that may be given to the govern-ment in companies in categories 1 and 2 must alsobe understood on the basis of the government’sambition of being amenable to supporting value-creating transactions through adjustments to itsholdings in these companies.

When assessing such transactions, thegovernment will normally also employ externaladvisors.

7.2 Ministerial powers

Under Section 19 of the Constitution, it is not wit-hin ministerial powers to alter the state’s capitalinvestments in companies with state ownership,for example through the purchase or sale of sha-res, participation in rights issues or funding indus-trial transactions through share settlements thatchange the state’s holdings. For such actions, thegovernment must hold special mandate from par-liament; see the Storting’s discussion of Docu-

ment no. 7 (1972–1973) in Recommendation no.277 (1976–1977).

Given the government’s ambition to reducestate ownership and contribute to value-creatingtransactions, the government will, as mentioned,in connection with the national budget for 2015,ask the Storting for the following mandates:– Mandate to fully or partially divest the state’s

holdings in all companies in category 1.– Mandate to possibly reduce the state’s share-

holding in Kongsberg Gruppen ASA andTelenor ASA down to 34 per cent.

As mentioned, any use of these powers must becommercially justified. Any use of these powersmay also relate to different types of solutions,such as sales of the state’s shares to industrial orfinancial entities, public offerings or as part ofindustrial solutions.

The government has also assessed the need forother powers, based in particular on the conceptthat the state, in commercial companies, shouldhave the opportunity to act in a professional man-ner in the same way as other good owners do.

As described in chapter 2.3.2, the acceleratingpace of change in business and industry meansthat companies have a greater need to restructurethan was previously the case. This may requireparticipation from the owners, for examplethrough the injection of capital, through acquisiti-ons, mergers, divestments, etc.

The government is aware of the increasedrequirements for rapid and effective decision-making processes, but believes that there are nogrounds for diverging from the fundamental divi-sion of responsibilities between government andparliament in matters of ownership, and will conti-nue adhering to this policy. In the government’sopinion, this division of responsibilities has wor-ked well and has not prevented companies inwhich the state has a large holding from exploi-ting commercial opportunities on an equal footingwith other companies.

The government also believes that there areno reasons for departing from the establishedpractice of the state being reticent to grant powersto the board of directors in cases which in law arevested with the annual general meeting.

As described in chapter 8.3.1, the governmentwill also continue supporting the state contribu-ting to buyback programmes (whereby thecompany buys its own shares on the market inorder to annul them, as a supplement to divi-dends), on condition that the state’s shareholdingin the company is not thereby altered.


8 How should the state own?

Through direct ownership exercised by the minis-tries, the state is patently the largest owner in Nor-way, and also a major owner in the internationalarena. Norway and the other Nordic countries areregarded as being exemplary in their exercise ofstate ownership. This is to a great extent attributa-ble to the political consensus achieved on themain frameworks for the exercise of state owners-hip, which have been conducive to predictabilityfor the companies and the capital markets. Theconstraints of these main frameworks entail thatstate ownership must be exercised professionallyin line with corporate and other legislation; in linewith generally accepted corporate governanceprinciples; that the state’s influence as an ownermust be exercised exclusively at general mee-tings; and that a clear distinction must be maintai-ned between the state’s role as an owner and itsother roles.

The government aims for the Norwegianstate’s ownership to be an example of bestpractice internationally. In exercising its owners-hip, the state emphasises areas in which the statehas positive prerequisites for adding value to itsholdings:– Within the established frameworks for corpo-

rate governance, including the distribution ofroles and responsibilities between the boardand owner, as prescribed by corporate legisla-tion, the state will continue to emphasiseimproving strategic and financial supervisionof its portfolio. This will be achieved by meansof analytical follow-up, by elaborating on strate-gic approaches to company performance, andby maintaining explicit expectations regardingcompany performance. For each company inisolation, there is strength to be drawn fromengaging in strategic dialogue with a deman-ding owner within the scope and constraintsoutlined above.

– The state is not represented on corporategoverning bodies. One of the main tasks of thestate as an owner is to establish competentboards that are duly capable of dealing with thestrategic challenges faced by the companiesthey oversee. As an owner, the state must have

clear understanding of the need for boardexpertise in each individual company, and hasin recent years strengthened its efforts in rela-tion to board member recruitment and evaluat-ion. These efforts will be continued.

– Effective corporate governance strengthensmarket confidence in companies and boostsvalue creation over time. The state will placeemphasis on being a leading owner when itcomes to promoting good corporate gover-nance.

The following discusses the state’s exercise ofownership.

8.1 Framework for the state’s ownership administration

8.1.1 Constitutional framework

Article 3 of the Constitution of the Kingdom ofNorway prescribes that executive power is vestedin the King, which, in practice, means the govern-ment. However, the Storting (Parliament) mayissue general guidelines and instruct the govern-ment in individual cases by means of plenary reso-lutions of the Storting or passing of bills.

State ownership of enterprises is also regula-ted by Article 19 of the Constitution: «The Kingshall ensure that the properties and regalia of thestate are utilised and administered in the mannerdetermined by the Storting and in the best inte-rests of the general public.» It is thus the govern-ment that administers the state’s shares andownership in state-owned enterprises, and speciallaw companies etc. This provision vests the Stor-ting with express legal authority to instruct thegovernment in matters pertaining to state owner-ship.

Administration of state ownership is delegatedto the ministry under which the company sorts, inaccordance with Article 12(2) of the Constitution.The Minister’s administration of ownership isexercised under constitutional and parliamentaryresponsibility.


The Storting’s funding mandate entails thatthe consent of the Storting must be obtained inthe event of changes in the state’s holdings in acompany (acquisition and divestment of holdings)and resolutions regarding capital injections entail-ing disbursements by the state.

Companies in which the State has ownershipwill usually be able to purchase and divest sharesin other companies and acquire or dispose ofparts of business operations where this is a natu-ral step in the realignment of the company’sobject-specific operations, without the approval ofthe Storting being required. For companies wherethe state is the sole shareholder, the consent ofthe Storting must be obtained regarding decisionswhich would significantly alter the state’s commit-ment or the nature of the business; see p. 18,Recommendation no. 277 to the Storting (1976–1977). When the State is a joint shareholder, thequestion of whether the case should be prediscus-sed in the Storting arise for matters of such scopethat they must be brought before the general mee-ting (company demergers or mergers, for exam-ple). Depending on the State’s holding in thecompany, it may be necessary to bring such mat-ters before the Storting; see p. 19 Recommenda-tion to the Storting no. 277 (1976–1977), but themain rule is that matters concerning acquisitionand divestment of shares, including acquisitionand divestment of subsidiaries, sort under thecompany’s management.

The Office of the Auditor General of Norwayconducts audits of the minister’s (the ministry’s)administration of the state’s ownership, andreports to the Storting accordingly.

8.1.2 The minister’s authority within the company

The legal basis for ministerial ownership authorityin a limited liability company is laid down inSection 5–1 of the Limited Liability CompaniesAct which states: «Through the general meetingthe shareholders exercise the supreme authorityin the company.» A similar provision applies topublic limited liability companies, state enterpri-ses and the majority of special law companies1. Asregards the state-owned enterprises, the term«general meeting» is replaced with «enterprisemeeting» but effectively denotes the same. In the

following, the term «general meeting» is used as acommon term to refer to both forms of meetings.

A general meeting is a meeting conducted incompliance with detailed rules laid down in Nor-wegian corporate law. A company’s general mana-ger, board members, members of the corporateassembly and the company’s auditor shall be sum-moned to attend and are entitled to be present andto voice their opinions at the general meeting.Attendance by the chair of the board and thegeneral manager is mandatory. In addition, theOffice of the Auditor General of Norway shall benotified of general meetings and has the right toattend. Minutes shall be taken of the general mee-ting. A general manager or member of the boardof directors or corporate assembly member whodisagrees with the resolution adopted by therepresentative of the company’s shares may havehis dissenting vote entered in the minutes.

The rules regarding minutes-taking and notifi-cation of the Office of the Auditor General of Nor-way provide the basis for constitutional supervi-sion of the administration of state ownership.

The provision in Section 5–1 of the LimitedLiability Companies Act entails that the ministervia the general meeting assumes supremacy overthe board in state limited liability companies andmay issue instructions which the board has a dutyto comply with. These might be general instructi-ons or special instructions on individual matters.By tradition, the state has exercised caution ininstructing the enterprises on individual matters.This is due firstly to the fact that it conflicts with,and undermines, the strict separation of roles andresponsibilities laid down in corporate law; seechapter 8.1.3. An instruction issued at a generalmeeting might cause the board to resign fromoffice rather than accede to the instruction.Secondly, active use of the instructing mandate ata general meeting may affect the constitutionalresponsibility vested in the minister vis-à-vis theStorting in the event that the minister assumesresponsibility, through a resolution of the generalmeeting, for actions that are customarily the pre-serve of the board. Active use of the instructingmandate might also carry implications as regardsthird-party damage liability.

Another consequence of Section 5–1 of theLimited Liability Companies Act is that the minis-try in its role as owner, has no authority within thecompany in the absence of the general meetingstructure2.

In jointly owned companies, in addition to theconstraints described above, further limitationsare placed on ministerial authority out of regard

1 One exception is Vinmonopolet, which does not hold ageneral meeting; see the Vinmonopolet Act no. 18 of 19June 1931.


for the other shareholders and in conformancewith the limited liability companies legislation’sparity principle; see Section 5–21 of the LimitedLiability Companies Act/Public Limited LiabilityCompanies Act. This means that the state, even asa majority shareholder, is not permitted to favourits own interests at the expense of the other share-holders in the company. The requirement for sha-reholder parity has the effect, for example, of limi-ting the scope for free exchange of informationbetween the company and the ministry. Thepublic limited liability companies legislation alsolays down explicit guidelines regarding the state’ssupervisory interaction with listed companies.This, however, does not prevent matters of widersocietal relevance from being addressed by thestate in supplement to its ordinary ownership dia-logue with companies in line with what is exerci-sed by other shareholders and stakeholders.

8.1.3 Administration of the company

Company management is composed of the boardof directors and the general manager. The limitedliability company form and other company formsemployed for state companies are based on astrict separation of roles between the company’sowner and its management. Pursuant to Section6–12 of the limited companies legislation and cor-responding provisions in the other company acts,management of a company pertains to the boardof directors and the general manager. This entailsthat day-to-day commercial management of acompany and responsibility for it rests withcompany management. Management shall beexercised by the board of directors and the gene-ral manager in the best interests of the companyand its owners. Within the general and specificframeworks determined for the company by theStorting, the state as an owner pursues its inte-rests through the general meeting. By virtue oftheir management of the company, the membersof the board and the general manager are subjectto personal and criminal liability as laid down inthe limited liability companies legislation.

8.1.4 Specifically concerning management of companies wholly owned by the state

Ownership in companies in which the state ownsall the shares (state limited liability companies3,state enterprises or special law companies4) isexercised as it is for other companies, by means ofgeneral meetings or trust/enterprise meetings5.One exception is Vinmonopolet, which does nothold a general meeting6.

By law, for state enterprises, matters assumedto be of material significance for the company’sobjectives or which to a significant degree wouldalter the nature of the undertaking shall be put tothe owner before a decision is made7. A similarrule applies to the health enterprises8. For certainstate limited companies, rules have been incorpo-rated in the articles of association requiring theboard to bring before the owner any matters assu-med to be substantive, setting a precedent orhaving political or societal implications for theowner. According to this same rule in the articlesof association, some companies also have a duty toregularly present the owner with a plan for thecompany’s activities. Such plans form the basis forministerial ownership reports to the Storting onthe activities of these companies. However, thisdoes not alter the fact that the state exercises itsauthority as an owner at the general meeting orenterprise general meeting.

For state-owned enterprises and state limitedliability companies, certain rules accord greaterpowers to the enterprise meeting and the generalmeeting than is otherwise laid down in law forother types of limited liability companies, such asthe right to set a higher dividend than that propo-

2 In special law companies, other arrangements may be inplace; see, for example, the Gaming Act, which regulatesthe activities of Norsk Tipping.

3 See Sections 20-4 to 20-7 of the Limited Liability CompaniesAct.

4 Special law companies denotes companies governed bytheir own dedicated statute, which typically also lays downspecific organisational rules. Examples of special lawcompanies include Vinmonopolet, Norfund and the regio-nal health enterprises.

5 See the consultative memo from the Ministry of LocalGovernment and Modernisation: «Sektorselskaper, virke-midler og effektiv måloppnåelse. Vurdering av virkemiddel-bruk overfor statlig heleide sektorselskaper» (Sectoralenterprises, policy instruments and effective goal attain-ment) of February 2014, in which Section 4.3.2 refers to asurvey conducted by Difi confirming that formal ownershipis exercised by the ministries through the general meetingor enterprise general meeting.

6 See the Vinmonopolet Act no. 18 of 19 June 1931.7 See Section 23 of the State-Owned Enterprises Act.8 See Section 30 of the Health Authorities and Health Trusts

Act.


sed by the board of directors or corporate assem-bly9.

8.1.5 Other frameworks

Apart from the frameworks ensuing from the Con-stitution, the law of public administration and cor-porate law, it is mainly competition law and stockexchange trading and securities law which imposelegal requirements on the State’s corporate gover-nance. Other principal legal frameworks ensuefrom EEA regulations such as the rules regardingstate aid.

8.1.5.1 Public-sector ownership and the EEA Agreement

The EEA Agreement is essentially neutral asregards public and private ownership; see Articles125 and 59 (2). The prohibition against state aid inArticle 61 (1) of the EEA Agreement thus alsoapplies to undertakings held by the State or otherpublic instances. This restricts the government’sscope for favouring non-commercial interests inthe exercise of ownership. In determining whet-her public funds furnished to an enterprise consti-tute state aid, the European Court and EuropeanCommission have elaborated the Market Econ-omy Investor Principle. If a public authority injectscapital on terms other than those that would beacceptable to a comparable private investor, theinvestment might be construed as holding a finan-cial advantage for the enterprise and as such con-travenes the rules regarding state aid. This entailsthat the state must demand normal market-ratereturns on capital invested in an enterprise opera-ting in competition with others. The EFTA Super-visory Authority (ESA) supervises Norwegiancompliance with the state aid regulations.

8.1.5.2 Competition rules

In principle, any changes in state ownership willalso comprise circumstances that are supervisedby Norwegian or other competition authorities.These would include enterprise mergers andacquisitions, which the competition authorities,pursuant to the competition rules applicable toenterprises, are to monitor. In such matters, thegovernment will propose to the Storting thatreservations be made regarding the supervisoryprocedure of such bodies to ensure that the mat-

ters are not treated differently on account of thestate ownership10.

8.1.5.3 Regulations for financial management within the state

One decisive constraint on the state’s exercise ofownership derives from the «Regulations onFinancial Management in Central Government»11.The Regulations apply to matters such as manage-ment and follow-up of the state’s ownership interestsin state limited companies, state-owned enterprises,special law companies or independent legal entitieswholly or partially owned by the central govern-ment, including the purpose that central govern-ment assets shall be properly managed.

Section 10 of the Regulations on FinancialManagement in Central Government state that:«Agencies with overall responsibility for state limi-ted companies, state-owned enterprises, companiesestablished by special statute or other independentlegal entities wholly or partially owned by the cen-tral government, shall draw up written guidelineson how management and control powers shall beexecuted for each individual company or for groupsof companies. A copy of the guidelines shall be sentto the Office of the Auditor General.

The central government shall, within the fra-mework of applicable laws and rules, manage itsownerships in accordance with general principles ofcorporate governance with special emphasis on:

a) that the chosen organisation of the company,the company’s articles of association, the financingand the composition of the management board areappropriate given the company’s purpose andownership

9 See Section 20-4 of the Limited Liability Companies Act andSection 17 of the State-Owned Enterprises Act.

10 The Ministry of Trade, Industry and Fisheries is responsi-ble for competition policy, including competition law gover-ning enterprises and the state aid regulations. The Minis-try is also the appeals body for matters pursuant to theCompetition Act pertaining to either private-sector orpublic-sector companies. An acting councillor of state isappointed for the Minister for Trade, Industry and Fis-heries for the hearing of complaints pursuant to theCompetition Act in which companies in which the state hasa holding are indirectly or directly affected by the outcomeof the complaint, and in which the Minster, owing to his orher responsibility for management of the state’s ownershipinterests in the company in question is disqualified or soborderline to disqualification for the Minister in the role ofCouncillor of State to wish to step down. In general, rulingsin respect of competition policy in which the Minister forTrade Industry and Fisheries is responsible for manage-ment of the state’s ownership interests will, depending onthe circumstances, necessitate appointment of an actingcouncillor of state.

11 Prepared by the Ministry of Finance and adopted by RoyalDecree, 12.12.2003. Last revised 18.9.2013.


b) that the execution of ownership ensures equaltreatment of all owners and supports explicit distri-bution of authority and responsibility between theowners and the management board

c) that the objectives established for the companyare achieved

d) the proper functioning of the boardGovernance, monitoring and control including

appropriate guidelines shall be adjusted to the size ofthe central government shareholding, the distinctivecharacteristics of the company, risk profile and sig-nificance.»

Section 16 goes on to state that: «Governance,monitoring and control including appropriateguidelines, shall be adjusted to the size of the centralgovernment shareholding, the distinctive characte-ristics of the company, risk profile and significance.The evaluations shall focus on the appropriatenessof for instance ownership, organisation and instru-ments, including grant schemes. The frequency andscope of the evaluations shall be based on theagency’s distinctive characteristics, its risk profileand its significance.»

A central principle in limited liability compa-nies, state-owned enterprises and special lawcompanies is that the state’s financial liability islimited to its invested capital.

8.1.5.4 Norwegian Code of Practice for Corporate Governance

The Norwegian Corporate Governance Board(NUES) is composed of different interest groupsrepresenting, owners, the issuers of shares andOslo Stock Exchange12. The objective of NUES isto prepare and update the Norwegian Code ofPractice for Corporate Governance to promotemaximum value creation within listed companiesin the best interests of shareholders, employees,other stakeholders and the wider public interest.The Code shall contribute to enhancing confi-dence in Norwegian companies and the Norwe-gian stock market. On 21 December 2012, NUESpublished a revised version of the Code. The Nor-wegian Code of Practice for Corporate Gover-nance supplements the state’s own principles ofgood corporate governance; see chapter 8.3.

Oslo Stock Exchange requires companieslisted on its exchange to prepare an annual conso-lidated report on their corporate governance.Under the same rules, an explanation shall be pro-vided of any deviation from the Norwegian Codeof Practice for Corporate Governance. Section 3–3b of the Accounting Act also requires reportingby companies on their corporate governance prin-ciples and practices.

8.1.5.5 OECD Guidelines on Corporate Governance of State-Owned Enterprises

In 2005, the OECD published a set of guidelines13

for management of state-owned companies,complementing the OECD principles of corporategovernance14. The then Norwegian Ministry ofTrade and Industry (now the Ministry of Trade,Industry and Fisheries) contributed actively tothe drafting of the guidelines. The rationale forthe guidelines is that good corporate governanceof state-owned enterprises results in better finan-cial development and the expedience of applying acommon standard of best practice for corporategovernance by the state. In 2010, the OECDpublished a practical guide to the guidelines inselected areas15. Both the OECD Guidelines andthe OECD Principles for corporate governanceare currently undergoing review and new versi-ons are expected to be adopted by the OECD in201516.

The main purpose of the guidelines has beento provide advice that contribute to state-ownedenterprises attaining a clearer legal status and aform of governance equal to that of equivalent pri-vate-sector enterprises. Further, the guidelinesrecommend the strict division of the state’s diffe-rent roles as a political authority, regulatory bodyand its role as a corporate owner. A third aim is tostrengthen the role of the board of state-ownedenterprises, in which competence and integrityare central. Transparency surrounding theownership, and its principles and policies andrespect for minority shareholders are likewise keyareas addressed by the Guidelines.

12 The Norwegian Shareholders Association, the NorwegianInstitute of Public Accountants, the Institutional InvestorForum (in which the Ministry of Trade and Industry andFisheries is also represented), Finance Norway, the Nor-wegian Society of Financial Analysts, the Norwegian Asso-ciation of Private Pension Funds, the Confederation of Nor-wegian Enterprise, Oslo Stock Exchange and the Norwe-gian Fund and Asset Management Association.

13 OECD (2005): «Guidelines on Corporate Governance ofState-Owned Enterprises.»

14 OECD (2004): «Principles of Corporate Governance.»15 OECD (2010): «Accountability and transparency – a guide

to state ownership.»16 The Ministry of Trade, Industry and Fisheries is actively

involved in the review work through its membership of theOECD Corporate Governance Committee and WorkingParty on State Ownership and Privatisation Practices; seechapter 8.5.2.


The Norwegian state’s ownership practicesand the state’s principles for good corporategovernance (see chapter 8.3) essentially corre-spond with the recommendations of the OECDGuidelines on Corporate Governance of State-Owned Enterprises. The board and managementof companies with state ownership also benefitfrom actively applying the recommendations inthe OECD Guidelines.

8.1.5.6 How owner control is affected by differing shareholdings

Once the Storting has decided that the state is toengage as an owner in a company with the statusof an independent legal entity, this then has impli-cations for how political policies and other objecti-ves are communicated and how and to whatextent the state may intervene in the running ofthe company.

The management of a state-owned enterprise,limited liability company or special law companyis distinct from the management of agencies wit-hin the public administration system. The owners(including the state as a shareholder) are requi-red to comply with the statutory division of rolesbetween the general meeting, the board and gene-ral management. In organising undertakings asindependent legal persons, as state-owned enter-prises, special law companies or limited liabilitycompanies, from the outset, the state waives itsopportunity to directly influence day-to-day activi-ties.

However, by participating in nominationprocesses and election to governing bodies, deter-mining the company’s objectives and other clau-ses in the articles of association, and by settingout the frameworks for the enterprise at the gene-ral meeting, the state may still exert influence onthe company’s activities. The state’s influence willdepend on the size of its shareholding.

The following discusses what an owner achie-ves in the way of influence in a company with dif-ferent typical shareholdings, and how this affectscorporate governance.

Wholly owned companies

Limited liability companies wholly owned by thestate are referred to as state limited liabilitycompanies (or state public limited liability compa-nies)17. The ordinary rules in the limited liabilitycompanies legislation also apply to the state limi-

ted liability companies. In addition, certain specialrules provide the state with extended control of itsownership; see Sections 20–4 to 20–7 of the Limi-ted Liability Company Act/Public Limited LiabilityCompany Act. Certain wholly owned state under-takings are also organised as state-owned enter-prises or special law companies. To all intents andpurposes, the state-owned enterprises are gover-ned in the same way as state limited liabilitycompanies.

The main differences for state limited liabilitycompanies, as compared with ordinary limitedcompanies, are firstly that the general meetingelects the shareholder-elected members to theboard, even if the company has a corporate assem-bly; see Section 20–4 no. 118 of the limited compa-nies legislation. In addition, the King in Council ofState may overrule resolutions of the corporateassembly or resolutions of the board if majorsocial considerations so indicate; see 20–4 no. 2 ofthe Limited Liability Company Act/Public LimitedLiability Company Act. In state limited liabilitycompanies, the general meeting is also not boundby any proposal by the board of directors or cor-porate assembly on the distribution of dividends;see 20–4 no. 4 of the Limited Liability CompanyAct/Public Limited Liability Company Act.

There is an obligation for both genders to berepresented on the board of directors of state limi-ted liability companies and their wholly-ownedsubsidiaries; see Section 20–6 of the Limited Lia-bility Companies Act. The same applies to state-owned enterprises and public limited liabilitycompanies generally; see Section 19 of the State-Owned Enterprises Act and Sections 6–11a and20–6 of the Public Limited Liability CompaniesAct. The Office of the Auditor General also has anextended right to exert control over the minister’smanagement of state holdings; see Section 20–7of the Limited Liability Companies Act/PublicLimited Liability Companies Act.

In wholly-owned companies, the owner may,through resolutions adopted at the general mee-ting, impose obligations on the company thatmight lower the company’s financial performancewithout contravening Section 5–21 of the LimitedLiability Companies Act/Public Limited LiabilityCompanies Act (Abuse of the general meeting’sauthority); see also Section 6–28 of the LimitedLiability Companies Act/Public Limited LiabilityCompanies Act (Abuse of position in the companyetc.).

17 At present the state has no state public limited companies.18 Of the state’s wholly-owned companies, only a minority

have a corporate assembly or other representative body.


The state’s financial liability in limited liabilitycompanies, state-owned enterprises and speciallaw companies is in principle limited to itsinvested capital. However, if an owner transgres-ses in instructing the company in business mat-ters, creditors might claim damages from thestate pursuant to the law of tort or the doctrine ofcorporate law concerning piercing of the corpo-rate veil. For this reason among others, the princi-ple is that companies are to be compensated ifthey are ordered to make investments or under-take other activities which the board does not findcommercially prudent; see chapter 8.2.4. Thismust be accomplished within the constraintsimposed by relevant statutes and other regulati-ons.

Jointly owned companies

Where the state is the joint owner of a company,the Limited Liability Companies Act/Public Limi-ted Liability Companies Act impose restrictions onthe types of resolutions that may be adopted bythe general meeting; see Section 5–21 of the limi-ted companies legislation on abuse of the generalmeeting’s authority. The purpose of this provisionis to protect the rights of minority shareholdersversus majority shareholders. This provision pro-hibits the general meeting from adopting resoluti-ons that are likely to give certain shareholders orothers an unfair advantage to the detriment ofother shareholders or the company. This is especi-ally pertinent in companies where state ownershipmay be justified by interests other than purelycommercial ones, but also where the state impo-ses undertakings on a company that are not inthat company’s ordinary line of business. Strictlimitations thus apply regarding which politicalobjectives may be pursued by means of corporategovernance of jointly owned companies.

However, depending on the size of the state’sholding in a company, a number of objectives maynonetheless be pursued, such as retention of ahead office in Norway. The following limit-valuesare key in the limited liability companies legisla-tion:

9/10

A holding of more than nine tenths of the sharesand a corresponding proportion of the votingrights in a limited liability company entitles themajority shareholder to acquire the remainingshares by way of a compulsory buyout of theother shareholders in the company19.

2/3

A holding of more than two thirds of the sharesand a corresponding proportion of the votingrights in a limited liability company guaranteescontrol over decisions requiring a correspondingmajority under the limited liability companieslegislation. A resolution to amend a company’sarticles of association requires at least two thirdsof the votes and the share capital. The sameapplies to resolutions regarding mergers ordemergers, decisions to raise or reduce the sharecapital, the raising of convertible loans, resoluti-ons to convert the company and resolutions towind up companies.

1/2

A shareholding of more than half of the sharecapital in a limited liability company ensures con-trol over resolutions requiring an ordinary majo-rity of the votes cast at the general meeting. Theseresolutions include approving the annual accountsand resolutions regarding the distribution of divi-dends. Election of members to the board or corpo-rate assembly also requires an ordinary majority.The board, however, is elected by the corporateassembly if such a body exists.

1/3

A holding of more than one third of the sharesand a corresponding proportion of the votingrights in a limited company provides negative con-trol over resolutions requiring a two-thirds majo-rity. This size of shareholding enables the ownerto oppose major decisions such as relocation ofthe company’s head office, a change in share capi-tal, amendments to the articles of association etc.;see the section on two-thirds majority.

Mandatory bid obligation

Under Section 6–1 (1) of the Securities TradingAct20, any person who through acquisition beco-mes the owner of shares representing more thanone third of the voting rights in a Norwegianlisted company is obliged to make a bid for thepurchase of the remaining shares in the company.A recurrent mandatory bid obligation applies forany person who through acquisition gains a hol-

19 See Section 4-26 of the Limited Liability Companies Act andSection 4-25 of the Public limited Liability Companies Act.

20 Act no. 75 of 29 June 2007 on securities trading.


ding representing 40 per cent or more of thecompany, and similarly 50 per cent or more21.This means that a decision to increase the state’sholding above these threshold values is subject tothe mandatory bid obligation, thus entailing thatthe state might acquire a larger shareholding thanintended.

8.2 The Norwegian state’s principles of corporate governance

The state’s conduct as an owner has great influ-ence on public and investor confidence in Norwe-gian companies under state ownership and in theNorwegian capital market. Broad political consen-sus prevails that state ownership shall be exerci-sed professionally within the constraints of Nor-wegian corporate law and based on generallyaccepted principles of corporate governance22,including that companies in which the state’sownership is largely driven by commercial inte-rests shall be operated in the same way and sub-ject to the same constraints as well-run private-sector enterprises.

In 2002, the Bondevik II Governmentdeveloped ten principles of good corporate gover-nance defining how the government will conductownership and what it expects of the companies.These principles have provided a predictability inthe state’s exercise of ownership that has beenwelcomed by participants in the Norwegian capi-tal market.

The state’s principles of corporate governancehave not been amended since 2002. In the presentreport, the government has made certain amend-ments to the original principles to ensure, as far aspossible, that they are aligned with currentpractices and generally accepted corporate gover-nance principles. The most important amend-ments are as follows: Principle 2 specifies that therequirement for transparency also applies to thecompany’s activities; see the discussion of therequirements for transparency in previous stateownership reports and the recommendations ofthe OECD Guidelines on Corporate Governanceof State-Owned Enterprises. Principle 4 specifiesthat the board is responsible for setting explicitobjectives and strategies for the company within

the constraints of its articles of association. Princi-ple 5 specifies that the capital structure shall bealigned with the company’s objectives (as statedin the articles of association) and not only with thestate’s objectives for its ownership. Principle 7(formerly Principle 8) specifies that the role of theboard of directors comprises more than supervi-sion of the company’s management by specifyingthat the board holds executive responsibility foradministration of the company. Mention of theboard’s evaluation in Principle 8 (formerly Princi-ple 9) is limited to solely apply to the board’s eva-luation of its own performance and not theowner’s evaluation of board members (the latter iscommented on in reference to Principle 6). InPrinciple 10 on corporate social responsibility, thewording has been amended to emphasise thestate’s expectation that companies shall work sys-tematically to safeguard their corporate socialresponsibility. In addition, technical adjustmentshave been made to Principle 1 and Principle 3, andthe order of some of the principles has been chan-ged so that the former Principle 7 is the new Prin-ciple 9, the former Principle 8 is the new Principle7 and the former Principle 9 is the new Principle 8.

As was done by the Bondevik II Governmentin Report to the Storting no. 22 (2001–2002)(White Paper) Reduced and improved stateownership, a supplementary commentary is provi-ded for each of the principles in turn. An introdu-ction has also been included as part of thecommentary on the principles. The state’s expec-tations of the companies have in some areas beenelaborated on in chapter 8.3. As and where rele-vant, the manner in which the principles apply towholly-owned companies and companies withsectoral-policy objectives has been clarified.

8.2.1 Introduction to the principles

State ownership shall be exercised professionallyand predictably within the constraints of Norwe-gian corporate legislation and other law, based ongenerally accepted corporate governance princi-ples and in observance of the strict separation ofthe role as owner from other roles assumed by thestate23. The state’s principles of corporate gover-nance are aimed at all companies in which thestate has a holding, whether wholly or jointlyowned by the state, and encompass both compa-nies where the activities are commercial in natureand companies in which the state is seeking to

21 See Section 6-6 (1) of the Securities Trading Act.22 Generally accepted principles of corporate governance are

principles as cited in, for example, the Norwegian Code ofPractice for Corporate Governance, the OECD Principlesof Corporate Governance and the OECD Guidelines onCorporate Governance of State-Owned Enterprises.

23 See chapter 8.5 for a detailed discussion of the state’s diffe-rent roles.


realise various sectoral-policy and societal objecti-ves.

For commercial undertakings in which thestate has a holding, the state’s principal objectiveis to maximise the value of its investments. Forstate-owned companies with sectoral-policy obje-ctives, the principal aim is for the objectives to beachieved in a manner that ensures efficient use ofresources.

8.2.2 Principle 1. All shareholders shall be treated equally.

A company’s ability to attract capital is dependenton investor confidence that other shareholdersare not given unfair opportunities to promote theirinterests at the expense of investors. As a majorityshareholder in several companies, it is imperativethat the state, in its capacity as owner, seeks toensure the parity of shareholders in companies inwhich the state is one of multiple shareholders.

Unequal treatment might entail that the statein its role of owner acts unlawfully on the basis ofinformation about the company not generallyknown to other shareholders. Another type ofunequal treatment arises if the state exercises itspower as an owner of the company via informalchannels. The state as a shareholder does notautomatically have, and must not demand, accessto more information than may be provided toother shareholders.

The companies, for their part, must have atten-tion on not discriminating among shareholders,for example, as regards the sharing of informa-tion. The board should ensure that the companymaintains extensive transparency towards all thecompany’s shareholders.

Under special circumstances where a require-ment exists for the state in its capacity as anowner (and any other major owners) to cast a voteat the general meeting in order to conduct transa-ctions such as a merger, demerger and similarrestructuring, it may at times be necessary to pro-vide major owners with information in advance ofthe plans being released to the public domain.Such information may be provided at the discre-tion, and on the initiative, of the company itself. Insuch circumstances, the state is governed by theordinary rules on non-disclosure/or insider tra-ding.

See also chapter 8.4 for details of contact withthe companies.

8.2.3 Principle 2. There shall be transparency in the state’s ownership of companies.

As an owner, the state manages major assets forthe common good. Transparency strengthensconfidence in state ownership, and, owing to thelarge scale of state ownership in Norway, in theNorwegian capital market. Transparency alsoupholds the democratic ethos in that the public isgiven access to information. A high degree oftransparency counteracts misunderstandings andenhances the predictability of state ownership

Box 8.1 The Norwegian state’s principles of corporate governance

1. All shareholders shall be treated equally.2. There shall be transparency in the state’s

ownership of companies.3. Ownership decisions and resolutions shall

be made at the general meeting.4. The board is responsible for elaborating

explicit objectives and strategies for thecompany within the constraints of itsarticles of association; the state sets perfor-mance targets for each company.

5. The capital structure of the company shallbe appropriate given the objective andsituation of the company.

6. The composition of the board shall be cha-racterised by competence, capacity anddiversity and shall reflect the distinctivecharacteristics of each company.

7. The board assumes executive responsibi-lity for administration of the company,including performing an independentsupervisory function vis-à-vis thecompany’s management on behalf of theowners.

8. The board should adopt a plan for its ownwork, and work actively to develop its owncompetencies and evaluate its own activi-ties.

9. Compensation and incentive schemes shallpromote value creation within the compa-nies and be generally regarded as reasona-ble.

10. The company shall work systematically tosafeguard its corporate social responsibi-lity.


conduct. Transparency is crucial out of regard forany other shareholders and potential investors incompanies in which the state is one of severalowners, and in reassuring the competitors ofcompanies under state ownership that they arecompeting on equal terms. Both the state as anowner and the companies themselves are subjectto a responsibility to maintain transparency.

As an owner, the state demonstrates transpa-rency in various ways. Reports to the Storting(White Papers) on state ownership account forwhy the state owns, what the state should own andhow the state exercises its ownership, includingwhat goals the state has for its ownership interestin individual companies. For certain companies inwhich the state has sectoral-policy objectives forits ownership, reports are also published on thecompanies’ activities. The Ministry of Trade,Industry and Fisheries publishes an annualownership report on the state’s portfolio ofcompanies managed by the ministries, and trendsover the preceding year24. It is also possible forthe public to request disclosure of the publicadministration’s work and case documents. Howe-ver, in a number of circumstances, it is necessaryto exempt documents from disclosure to thepublic domain in the interests of prudent manage-ment of state ownership25.

The state expects companies under sole orjoint state ownership to be open about importantmatters concerning their activities. Timely accessto relevant information allows the state, otherowners and stakeholders generally (including thepublic/society at large) to assess company activi-ties, performance, growth and goal attainment onan ongoing basis. Access to relevant informationis a key criterion for best ownership practices.

Wholly-owned state enterprises with commer-cial objectives that are not defined as «small enter-prises» as per Section 1–626 of the Accounting Actshould strive to be as transparent as listed compa-nies unless special circumstances dictate other-wise. All wholly owned state companies should fol-low the Norwegian Code of Practice for CorporateGovernance where it applies, and, as part of this,

publish a consolidated account of the company’scorporate governance, including accounting forany non-compliance with the Code. For stateownership, the most relevant items of the Codeare: Reporting on corporate governance (topic 1);clear definition of business, objectives and strate-gies (topic 2); composition of governing bodies(topic 8); requirements for the work of the board(topic 9); requirements for risk management andinternal control (topic 10); remuneration of theboard and executive personnel (topics 11 and 12);and information and communications (topic 1327).The corporate governance report is published aspart of the annual report or in documents cited bythe annual report.

8.2.4 Principle 3. Ownership decisions and resolutions shall be made at the general meeting.

The legal basis for ministerial ownership authorityin a limited company is laid down in Section 5–1 ofthe Limited Liability Companies Act which states:«Through the general meeting the shareholdersexercise the supreme authority in the company.»A similar provision applies to public limited liabi-lity companies, state enterprises and to the majo-rity of special law companies28. As regards thestate enterprises, the term «general meeting» isexpanded to «enterprise general meeting» buteffectively denotes the same. The ministry in itsrole as an owner has no authority within thecompany in the absence of the general meetingstructure. Use of the general meeting as the soledecision-making arena where the state operatesas an owner ensures documentability. See alsochapter 8.1.2 detailing ministerial authority withincompanies.

The above constraints present no barrier tocontact between an owner and a company outsideof the general meeting, just as this is customarypractice in the capital market generally. This is acriterion for obtaining information about businessactivities and is thus an important element in theordinary performance of supervision and controlunder state ownership. Similarly, the constraintsdo not prevent the state from raising matters thatshould be considered by the companies in theinterests of their business and growth. Any opini-

24 www.eierberetningen.no25 See, for example, sections 13 and 23 (4) of the Freedom of

Information Act.26 Small enterprises are defined as enterprises with a duty to

keep accounts but which do not sort under Section 1-5 ofthe Accounting Act and which on the balance sheet date donot exceed the thresholds in respect of the following threecriteria: 1. sales revenue: NOK 70 million, 2. total balancesheet: NOK 35 million, 3. average number of employeesover the financial year: 50 full-time equivalents.

27 Notably the part of the principle covering guidelines forcompany reporting; see Section 13 (1).

28 One exception is Vinmonopolet, which does not hold ageneral meeting; see the Vinmonopolet Act no. 18 of 19June 1931.


ons conveyed by the state at such meetings are tobe regarded as suggestions regarding thecompany’s administration and governance. Mat-ters requiring the endorsement of the owner mustbe addressed at the general meeting29. See alsothe discussion of Principle 1 and chapter 8.4 fordetails of contact with companies.

8.2.5 Principle 4. The board is responsible for elaborating explicit objectives and strategies for the company within the constraints of its articles of association; the state sets performance targets for each company.

One main principle governing management of thestate’s portfolio is that such management is limi-ted to an overarching general level. The state’sownership must be exercised in such a way thatthe board and general management are given fre-edom of scope within certain constraints. Itensues from corporate legislation that acompany’s objectives (business activities) shall bedefined in its articles of association. For its wholly-owned companies, the state seeks to assign thecompany a well-defined objective consistent withthe state’s ownership objectives. In jointly ownedcompanies, the company’s objective will be defi-ned jointly with the other shareholders at thegeneral meeting.

For the majority of companies with sectoral-policy objectives, state supervisory requirementsmay justify the need for the scope of businesses tobe more explicitly delimited than is customary forcompanies with commercial objectives. Thismight, for example, entail constraints to preventthe companies expanding their business activitiesinto areas that are not conducive to realisingsectoral-policy objectives. Such constraints shouldbe incorporated in the company’s articles of asso-ciation30.

The board is expected to elaborate explicitobjectives and strategies for the company withinthe constraints of its articles of association, and toreport on these. In companies with sectoral-policyobjectives, the aim should be to set goals that ena-ble the companies to report to the owner on thelevel of attainment of sectoral-policy objectives

and permit efficiency and performance to be eva-luated31.

The owners shall monitor goal attainment andhold the board accountable for such attainment.The owners must assess the extent to which anyfailure in goal attainment is attributable to theboard or to factors beyond the board’s control.Corporate legislation is based on an assumption ofmutual trust between the owners and a company’sboard. A failure in goal attainment may constitutea breach of that mutual trust. Requirements regar-ding the competence of the board in a given situa-tion faced by a company may also be amended. Insuch situations, the customary practice is for theowners to replace the entire board or those indivi-dual board members who no longer enjoy thetrust of the owners or are no longer deemed topossess the requisite competence.

Where the state instructs companies to rendercertain services, such instructions should beaccompanied by financial compensation to coverthe costs of services rendered. Such compensa-tion may be awarded solely within the constraintsof EEA regulations regarding state aid, includingthe rules on services of general economic inte-rest. The costs and financing of rendering suchservices should to the greatest possible extent bedisclosed in financial statements or other corpo-rate itemisation of such activities. This serves toclarify the appurtenant responsibilities, to preventcross-subsidisation and unlawful state aid and faci-litates efficient owner-side supervision. In addi-tion, it discloses the costs of fulfilling sectoral-policy objectives. In this way, sectoral-policy obje-ctives are not compensated for by reduced expe-ctations for return on investment.

The owners of a company are permitted to pro-mote value creation by setting explicit perfor-mance targets for the company. For companieswith commercial objectives, the state in its capa-city as an owner will impose targets regardingreturns and dividends. To that end, the state will

29 In special law companies, other arrangements may be inplace; see, for example, the Gaming Act, which regulatesthe activities of Norsk Tipping AS, a state limited companyunder the Ministry of Culture.

30 See topic 2 in the Norwegian Code of Practice for Corpo-rate Governance.

31 See the consultative memo from the Ministry of LocalGovernment and Modernisation: «Sektorselskaper, virke-midler og effektiv måloppnåelse. Vurdering av virkemiddel-bruk overfor statlig heleide sektorselskaper» (Sectoralenterprises, policy instruments and effective goal attain-ment) of February 2014, in which Section 1.3 translates as«proper performance reporting supports the ministry’songoing corporate governance and monitoring vis-à-vis theboard of directors, but also provides a crucial platform forevaluation of policy instrument usage overall. This form ofevaluation of policy instruments such as regulation, finan-cing and organisation should be performed on a regularbasis to ensure that business activities are organised insuch a way as to be sufficiently adaptable to changes inremit and externalities.»


apply principles for assessment of returns in linewith standard market practices. Targets forreturns and dividends are notified to the companyand normally discussed with the management orboard. See also chapter 8.3.1 in which state tar-gets for returns and dividends are detailed. Incompanies with sectoral-policy objectives, thestate, in its capacity as an owner, will seek to setexplicit performance targets and performanceindicators32.

See also Principles 7, 8, 9 and 10 and chapters8.3.2–8.3.6 in which the state’s expectations regar-ding board work, corporate social responsibility,executive remuneration, research, development,innovation and competence together with diver-sity and gender equality are discussed.

8.2.6 Principle 5. The capital structure of the company shall be appropriate given the objective and situation of the company.

The capital structure of a company reflects itsfinancing. Each company should maintain anappropriate capital structure arranged for long-term value-creation, effective goal achievement andas low capital costs as possible. This entails that thecapital structure should be adapted to the indivi-dual circumstances of the company in line with thecompany’s objectives, strategy and risk profile. Theboard has a superior responsibility for this.

Equally, in its capacity as an owner, the stateshould have its own assessments of company capi-talisation and thereby promote an expedient capi-tal structure enabling companies to realise soundcommercial growth over time and contributing toefficient operations. This also applies to compa-nies with sectoral-policy objectives. An inexpedi-ent capital structure may result in inefficient ope-rations, misinvestment and weak returns oninvestment or impaired goal attainment.

As an owner, the state continuously assessesthe capital structure of commercial companiesbased on commercial parameters. This is an ele-ment in the assessments entailed in definingreturns targets, follow up on returns targets (seePrinciple 4 and chapter 8.3.1) and decisions on theneed for capital injections etc. Factors such as a

company’s revenue prospects, investment trackrecord, investment needs, maturity, expansionplans, yield prospects, cash-flow and capitalexpenditure form part of the assessment activi-ties.

It may be appropriate to adjust a company’scapital structure if deemed expedient.

As in other areas, state supervisory require-ments regarding capital structure may justify theneed for the scope of businesses to be more expli-citly delimited for companies with sectoral-policyobjectives than is customary for companies withcommercial objectives. This would be the case, forexample, in relation to restrictions on borrowing.Any such constraints should be incorporated inthe company’s articles of association33.

See also chapter 8.3.1 in which state targets forreturns and dividends are detailed.

8.2.7 Principle 6. The composition of the board shall be characterised by competence, capacity and diversity and shall reflect the distinctive charac-teristics of each company.

Ensuring sound composition and competence ofboards of companies in which the state is a share-holder is of crucial importance and is one of thestate’s prime responsibilities.

The preparatory work preceding the electionof governing bodies in listed companies is perfor-med by dedicated nomination committees electedat the general meeting at which representatives ofthe state, jointly with the rest of the shareholders,seek to arrive at the best possible composition ofthe company’s governing bodies. The preparatorywork preceding the election of governing bodiesin other companies in which the state is a share-holder proceed in a structured manner and sub-ject to the same goal. In wholly owned companies,these activities are conducted internally within theministries. The ministries responsible for exerci-sing state ownership have established systematicand diligent procedures in support of board eva-luation and nomination.

The state places emphasis on competence,capacity and diversity based on the company’sspecial characteristics in nominating and electingindividuals to serve on company boards. The aimis for the board of each individual company torepresent, in its totality, the requisite competencegiven the company’s objectives, business area,

32 See the consultative memo from the Ministry of LocalGovernment and Modernisation: «Sektorselskaper, virke-midler og effektiv måloppnåelse. Vurdering av virkemiddel-bruk overfor statlig heleide sektorselskaper» (Sectoralenterprises, policy instruments and effective goal attain-ment) of February 2014, Section 1.3.2 (on operationalisa-tion of targets and performance indicators).



challenges and the state’s objectives for itsownership.

For companies with commercial objectives,the emphasis is on electing representatives withwide-ranging business and industry experience.In companies with sectoral-policy objectives, thenumber of board members competent in the rele-vant sectoral-policy remits should be balanced bythe members competent in company managementand commercial undertakings. In any event, rele-vant competence, rather than political affiliationsor activities, is the sole criterion for board eligibi-lity. That being the case, political experience maystill be useful on a widely representative board.

Based on the basic competence requirements,the state will seek to ensure that each individualboard represents an appropriate diversity inrespect of geographical affinity, age, cultural andexperiential background. The state will strive forequal representation of the sexes in nominatingboard members, and aims to increase the propor-tion of female chair of the board in companies inwhich the state has a holding. Boardroom exper-tise, if lacking, may be readily acquired by practi-cal service on a board. There is consequently aneed to maintain continuity on many boards toensure retention of acquired expertise.

The commitments entailed by paid employ-ment or positions of trust held by prospective can-didates should be compatible with the timecommitment that may be reasonably expected forboard duties. This will be assessed on a case-by-case basis.

The Storting has decided that parliamentaryrepresentatives should barred from serving onthe boards of companies subject to parliamentarysupervision except on the understanding thatsuch representatives do not run for re-election.There is also an unwritten rule that new ministers,on taking up office in government, are to resignfrom service on any board and are not eligible fornew positions of trust of this kind. The sameapplies to state secretaries.

Rules have also been laid down for govern-ment officials and civil servants employed by aministry or in central government, who attend tomatters concerning an enterprise as part of theirwork or who are employed by a ministry or othercentral government entity, and who regularlyattend to matters relevant for the enterprise or itssector, stating that these are not eligible to serveon the board or have other similar positions wit-hin that enterprise34.

Election to the board is customarily for a termof two years in accordance with the main rule of

the limited companies legislation. However, thecomposition of the board should be assessed onan ongoing basis in respect of factors such as thecompany’s performance and requirements. Repla-cements outside of the two-year term may there-fore be necessary.

In its capacity as an owner, the state will eva-luate the board with the aim of ensuring the idealcomposition of board members. Prior to boardelections, the state will assess factors such as thecomposition of a board, its procedures (internallywithin the board and with company management),competence, performance, goal attainment andwhether contributions to the company’s value cre-ation are satisfactory or whether changes may beneeded to the board. For its wholly-owned compa-nies, the state typically interviews members of theboard as part of its appraisal. In companies with adedicated nomination committee elected by thegeneral meeting, this body conducts the boardmember appraisals. The state’s appraisal of theboard’s performance will also be based indirectlyon annual reports and other available information.

As part of the process of nominating new can-didates, the state will aim to discuss assessmentswith the chair of the board concerning changes tothe board.

The above-mentioned guidelines are in princi-ple also applicable to the composition of othergoverning bodies such as corporate assembliesand nomination committees.

8.2.8 Principle 7. The board assumes executive responsibility for adminis-tration of the company, including performing an independent supervisory function vis-à-vis the company’s management on behalf of the owners.

Administration of the company is the responsibi-lity of the board. The board shall ensure the pro-per organisation of the enterprise, appoint thechief executive officer and supervise generalmanagement and the company’s activities gene-

34 See Section 10.14.1 of statens personalhåndbok 2014(handbook for the Norwegian Civil Service). The rationalefor this rule is that state board representation would entailincreased responsibility on the part of the minister for thecompany’s commercial commitments, which could beexpected to result in stricter state control of companies,which would scarcely be conducive to realising a value-maximisation objective. See, for example, chapter 9.6.2, pp.91-92. Official Norwegian Report 2004: 7 «Statens forret-ningsmessige eierskap» (the state’s commercial owners-hip).


rally. The board shall also undertake the strategicmanagement of, and administer, the company inthe interests of the company and its owners withinthe constraints laid down by the general meeting.The board shall determine the company’s riskprofile and ensure that the company has put inplace effective internal controls, adequate sys-tems and resources for ensuring compliance withstatutory provisions and effective systems for riskmanagement. The objective for risk managementand internal controls is to manage, rather than eli-minate, exposure to risks related to successfulconduct of the company’s business. The work ofthe board should be performed in such a manneras to maximise the company’s value creation.

The board should be a resource, discussionpartner and aide to the company’s management.Equally, the board must oversee the work of thecompany management and as such act impartially.In extension of its supervisory function, the boardmust assess the company’s management and theneed for replacements. This includes drawing upplans for internal competence development toensure that up-and-coming management resour-ces are nurtured on an ongoing basis.

See also chapter 8.3.2 in which state expectati-ons regarding board work are detailed.

8.2.9 Principle 8. The board should adopt a plan for its own work, and work actively to develop its own competencies and evaluate its own activities.

In order to promote systematic and efficient boardwork, the board should draw up an annual sche-dule of activities, and timetable its meetings at afrequency to ensure that the board is able to fulfilits obligations. The chair of the board has a parti-cular responsibility for ensuring the effectivenessof the board.

Serving on a board requires substantialcommitment. The effort put into serving on theboard by its members is a key element in the qua-lity of board work35.

The trend has been in the direction of moreextensive use of board committees. Under Norwe-gian law, the board members retain joint accounta-

bility for decisions made. If a board committee isutilised, the committee will solely draft decision-support material for the final decision to be madeby the board itself. In order to ensure adequatepreparation of key topics, the use of a boardcommittee may be expedient. Examples of boardcommittees are audit committees (a statutoryrequirement for many companies), a remunera-tion committee/emoluments committee and a riskmanagement committee.

The chair of the board should coordinate effe-ctive use of the board’s collective competence,including encouraging its productiveness as a col-legial body. Globalisation, technological advancesand other changes in framework conditions andregulations have increased the complexity ofboard work. The board, and the chair especially,should make arrangements to ensure that boardmembers at all times possess the requisite compe-tence for serving on the board, and if necessary,initiate measures to raise the level of compe-tence36.

The work of the board should be evaluated37.The state expects the boards of companies to eva-luate their activities and competence on an annualbasis establishing a basis for ongoing impro-vements in board work (progress evaluation), andideally by retaining an external facilitator. A sum-mary of the evaluation and its outcomes should bemade available to the nomination committee (orthe ministry in companies wholly owned by thestate) unless circumstances dictate otherwise38.An overview should also be provided concerningany measures initiated to improve the work of theboard.

See also chapter 8.3.2 in which state expectati-ons regarding board work are detailed.

35 McKinsey’s Global Board Survey, a survey from 2013 of772 board representatives, reveals that effective boardsspend more than 40 days annually per board representativeon board work, more than twice that of less effectiveboards; see McKinsey & Company (2014): «Statlig eier-skap, Rapport til Nærings- og fiskeridepartementet.» (Stateownership, report to the Ministry of Trade, Industry andFisheries).

36 See Huse, M. & Søland, A. I. (2009): p. 147 of «Styreledelse– styret som team og prosessorientert styrearbeid» inwhich the authors state that in order to maintain boardcapacity for value creation, the chair should ensure that themembers continually update both their competence andtheir insights into the company. They also point to thecompany’s responsibility for attending to the updating anddevelopment of board member competence.

37 A board evaluation procedure is customarily split into threemain types: reporting evaluation, progress evaluation andrecruitment evaluation; see, for example, Huse, M. & Ras-mussen, J. L. (2009): «Styreevaluering – hva er det og hvor-dan brukes de?» Magma 3/2009.

38 Rasmussen, J. L. (2010): «Corporate Governance in Nor-way; the development of a board evaluation model with spe-cial emphasis on large listed companies.» Doctoral Thesis,Cass Business School, London. Rasmussen points out thatif board members are aware that the outcomes of a self-eva-luation are to be shared with the nomination committeethen this may influence and even distort the board evaluat-ion process or outcome.


8.2.10 Principle 9. Compensation and incentive schemes shall promote value creation within the companies and be generally regarded as reasonable

Properly structured compensation and incentiveschemes can promote value creation within thecompany and the alignment of shareholder andcompany interests. The structure of pay packagesand incentive schemes also determine the scopefor recruitment and retention of desired compe-tence.

From a wider perspective, salary incrementsshould not have the effect of weakening Norwe-gian competitiveness. Executive salaries incompanies in which the state has a holding aresignificant factors in this wider context.

Since 2001, the state has applied guidelines forremuneration of senior executives in companies inwhich the state has a holding39. Here, ‘senior exe-cutives’ denotes chief executive officers and otherexecutive leaders; see Proposition to the Odels-ting no. 55 (2005–2006), which cites the Accoun-ting Act and Public Limited Liability CompaniesAct’s rules regarding «senior executives».

The purpose of the guidelines is to set out thefactors emphasised by the state in casting its voteregarding determination of executive remunera-tion at the company’s general meeting or enter-prise general meeting. The overriding concern inthe state’s guidelines has been for executivesalaries in companies in which the state has a hol-ding to be competitive, but not above those ofother similar companies, and that any deviationfrom the guidelines shall be accounted for in acco-rdance with the «comply or explain» principle.

Since the financial year 2011, the boards of allwholly owned companies or those in which thestate is a major shareholder, with the exception ofthose defined as «small enterprises» under theAccounting Act, have presented a statement inrespect of the remuneration of senior executivesat their general meetings40. This has been a statu-tory requirement for listed companies since200741. The underlying aim is transparency surro-unding remuneration, and for the owners, thoughtheir vote at the general meeting, to convey their

position on the company’s executive remunera-tion policy. Responsibility for drawing up and con-cluding contracts with executive employees restswith the board.

See also chapter 8.3.4 in which state expectati-ons regarding executive salaries are detailed.

Remuneration of governing bodies within thecompanies is determined by the general meetingor corporate assembly. In its assessment of boardemoluments in companies under state ownership,the state attaches importance to the emolumentsreflecting the board’s responsibility, competence,time commitment and the company’s comple-xity42. The state will also place emphasis on theboard emoluments being conducive to appropri-ate and sound competence within the board. Thechair of the board should be remunerated separa-tely in keeping with the larger scope of duties nor-mally entailed by this position. For board mem-bers who serve on board committees, a separatefee for such service will be given consideration,and the state will usually vote in favour of suchadditional fees. As a basis for its vote, the state willdecide, in each individual instance, whether it ismore expedient to pay a fixed fee or a fee per mee-ting or a combination of the two. In conformancewith the Norwegian Code of Practice for Corpo-rate Governance, the board members of listedcompanies should be encouraged to hold sharesin the company43. The state takes a positive viewof board members holding shares.

Remuneration for other governing bodies(corporate assembly/representative body, nomi-nation committee etc.) will also be assessed on thebasis of the above-mentioned criteria.

See also chapter 8.3.2 in which state positionson board remuneration are discussed in moredetail.

8.2.11 Principle 10. The company shall work systematically to safeguard its corporate social responsibility

All Norwegian companies should demonstratecorporate social responsibility, whether under pri-vate-sector or public-sector ownership and regard-less of whether their undertaking is located inNorway or abroad. Since 2001, the state has hadin place explicit expectations for companies under39 These rules apply to state-owned enterprises, health trusts

and special law companies, together with public limitedcompanies and limited companies in which the state has adirect holding.

40 This is prescribed in the individual company’s articles ofassociation.

41 See Section 5-6 (3) of the Public Limited Liability Compa-nies Act.


43 See topics 8 and 11 in the Norwegian Code of Practice forCorporate Governance.


state ownership to practice corporate socialresponsibility (CSR).

CSR covers a number of different issue-areasconcerning the impacts of corporate conduct onpeople, society and the environment, includinghuman rights, employee and worker rights, theclimate and the environment, anti-corruption andtransparency. By tradition, the intention is for theconcept of CSR to embrace a commitment overand above statutory compliance. Meanwhile, thefield of CSR is continually evolving, and certainissue-areas have now been incorporated intolaw44.

The premise for the state’s ownership policy isthat companies in which the state has holdingsshall contribute to value creation and thatcommercial companies shall be profitable overtime. A company’s commitment to fulfilling its cor-porate social responsibility should support thecommercial development of the company. Compa-nies fulfilling their CSR in a robust and visionarymanner should adopt a strategic approach to CSRthat embodies both risk management and theexploitation of new business opportunities. Suchcompanies will have easier access to a competentworkforce, loyal customers and supportive localcommunities. This serves to strengthen acompany’s competitiveness and underpins long-term value creation.

The board holds the responsibility for thecompany’s conduct, including CSR, and forensuring that the enterprise is operated in compli-ance with statutes and rules.

Companies with sectoral-policy objectives willoften need to fulfil specific societal mandates wit-hout having an explicit commercial objective.Such societal mandates are usually distinctly sepa-rate from what is referred to as corporate socialresponsibility. Such companies shall also worksystematically to fulfil their corporate socialresponsibility.

See also chapter 8.3.3 in which state expectati-ons regarding corporate social responsibility aredetailed.

8.3 Details of the state’s corporate targets and expectations

For commercial companies, the objective of thestate in its capacity as an owner is to achieve maxi-

mum return on invested capital. In sectoral-policycompanies, the objectives of state ownership shallbe fulfilled with maximum efficiency.

The government is committed to companiesmaintaining and extending their competitivenessand efficient operations in both the short and longterm. Various factors facilitate this.

The government expects companies to main-tain awareness of the facilitating factors for theirindividual development. The state’s principles ofcorporate governance prescribe the state’s expe-ctations for the companies in its portfolio; seechapter 8.2. The present chapter presents a detai-led discussion of the government’s expectationsfor companies under state ownership in areasdeterminative for corporate value creation.

8.3.1 Returns and dividends

The main objective of the state’s commercialownership (companies in categories 1–3) is toachieve the highest possible return on investedcapital over time. The return is made up of thesum total of the increase in market value of acompany’s equity and yield in the form of divi-dends and any share buybacks.

By setting explicit targets regarding returnsand yield, the state, like other owners, can pro-mote a focus on profitability and efficient operati-ons in its holdings.

Listed companies are valued daily in the stockmarket, and the market value of company equityis thus observable. For unlisted companies, thereis usually no ongoing market valuation. For suchcompanies, valuation exercises are a tool forassessing the performance of the portfolio.

The government expects companies in cate-gories 1–3 to generate market returns in line withthe objective to achieve the highest possiblereturn on investment over time.

The EEA Agreement imposes constraints onhow return targets are set in order to prevent dis-tortion of competition; see chapter 8.1.5.1.

Here, return targets denotes the return oninvestment an investor can expect to achieve overtime, given the risk. The return targets are setspecifically for, and communicated to, eachcompany individually.

The return targets generally apply on averagefor a period of three to five years and are usuallyrevised every three to five years. The targets areintended to provide a basis for discussion with thecompanies on their value creation, and must beused, in conjunction with the company’s ongoingfinancial performance and benchmarking against

44 Examples include the anti-corruption provision in the Nor-wegian Penal Code, introduced in 2003 and the UK BriberyAct of 2010. Both of these have extraterritorial applicability.


comparable companies, for assessment ofcompany value creation over time.

Return targets are not set for non-commercialcompanies or those that are dependent on statesubsidisation. Such companies follow the parlia-mentary subsidisation rules. The governmentexpects such companies to be run efficiently.

8.3.1.1 Dividends

Dividends from a company often represent a sub-stantial portion of the return on invested capital.

In companies with commercial objectives, thegovernment generally endorses dividend policiesconducive to long term return on investment.Commercial companies in which the state is a sha-reholder should be able to conduct business onthe same market terms as competitors in whichthe state is not a shareholder.

This entails, among other things, that thestate’s dividend targets for commercial companiesare based on commercial considerations. Withinthese parameters, the state, like other commercialowners, may make independent commercialassessments concerning company dividend policybased, for example, on the state’s perspective as along-term industrial owner, or based on the state’sobjectives for its ownership.

In addition to their ordinary business, somewholly owned companies are required to fulfilsectoral-policy objectives which may be unprofita-ble from a company perspective. In such cases,the companies will usually be reimbursed for ite-mised added costs, and not indirectly by means ofreductions in their dividends. For certain sectoral-policy companies, non-distribution of dividend isprescribed by their articles of association. Compa-nies that are dependent on state subsidies do notnormally pay dividends.

The state communicates both long-term andannual dividend targets to the companies.

The long-term targets generally apply as anaverage for a period of three to five years. In manycases, the targets are set on the basis of thecompany’s annual net income after tax and mino-rity interests. There may also be cases in whichtargets are based more on cash measures, as aresult, among other factors, of a trend in accoun-ting rules and substantial unrealised value chan-ges affecting reported profits. When setting long-term dividend targets, an assessment will be madeof factors such as the company’s financial positionand earnings prospects, including elements suchas the company’s strategy, capital structure,industry and market conditions, maturity, divi-dend policy, liquidity and yield.

Figure 8.1 Dividend-adjusted growth in value of companies on the Oslo Stock Exchange under state ownership1. Figures sourced from FactSet.1 The shares in Aker Solutions and Kværner are owned indirectly, through Aker Kværner Holding.

0

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2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 OSEBX Aker Solutions Cermaq DNB Kongsberg Gruppen Kværner Norsk HydroSAS Statoil Telenor Yara International


In setting annual dividend targets, essentiallythe same elements as the above will be conside-red.

The state may determine dividends throughresolutions at general meetings/enterprise gene-ral meetings in wholly-owned state companies andstate-owned enterprises. Importance will be atta-ched to aspects such as the enterprise or companyretaining adequate equity and liquidity levels afterdividend distribution45. For jointly owned compa-nies, the main rule in the limited companies legis-lation prescribes that the general meeting may notadopt a dividend higher than that proposed by theboard. The state’s dividend targets in jointlyowned companies are communicated to the boardahead of the board submitting its dividend pro-posal so that the board is apprised of the state’stargets before making its decision.

8.3.1.2 Share buybacks

Company repurchases of shares for deletion (sha-res buybacks) combined with dividend distribu-tion can be an effective means of achieving anappropriate capital structure. They may also serveto generate a competitive yield.

As in the case of dividends, a share buybackprogramme is a form of allocating profits andshould be seen in the context of the overall finan-cial position of the company. Equity capital forwhich companies see no appropriate use is retur-ned to shareholders via owners who opt to selltheir shares. Because the shares purchased arepermanently deleted, the value underlying each ofthe remaining shares is unaffected.

The government maintains that listed compa-nies under state ownership should have the sameopportunity as other companies to perform sharebuybacks. Usually, share buybacks will andshould be regarded as a supplement to dividends.Inquiries from companies as to whether the statewishes to participate in a share buyback pro-gramme will be assessed on their individualmerits.

For listed companies in which the state has aholding, the state’s policy is to ensure that sharebuybacks with subsequent deletion do not entail achange in the percentage of shares owned by thestate. Consequently, an agreement framework hasbeen established in consultation with the compa-nies concerned entailing that the state maintains

its ownership, measured as a percentage of sha-res. These agreements are publicly available.

The government will continue to apply theestablished framework when entering into newshare buyback agreements.

8.3.2 Board work

According to company law, the board is responsi-ble for management of the company. Consequ-ently, the government believes that one of thestate’s most important responsibilities as anowner is to ensure competent boards. The govern-ment expects boards to manage companies in thebest interests of the company, its owners and itsemployees, and is committed to ensuring thatboards seek actively to improve their own perfor-mance.

The government wishes to draw attention torecent years substantial developments regardinghow the board best can contribute to value crea-tion for companies. The following presents someperspectives to serve as inspiration on bestpractices for the boards of companies in which thestate has holdings.

Much has been written about best practices inboard work. One of the main concerns is how theboard can best add value46. The emphasis is lesson identifying appropriate board duties, and moreabout how boards can support value creation.This will vary from one board to the next and fromone board member to the next. Many expertsassert that the chair and the working procedure ofa board are determinants of best use of boardmember competence, and that this should be acore element of board evaluations. The principalduty of the chair is to be a motivator and leaderwho ensures that the resources of all board mem-bers are put to best use.

The role of the board in supervising day-to-daymanagement and the company’s ongoing activi-ties is one of the board’s principal duties. Effectiveboards which serve as a sounding board for mana-gement, and which are proactive over and abovetheir supervisory role, are gaining prominence incompany performance. Boards are increasinglyregarded as a critical success factor in the long-term success of the companies they serve.

Many board members lack the time, expertiseand the right information to enable them to make

45 See Section 3-4 of the Limited Liability Companies Act andSection 17 of the State-Owned Enterprises Act.

46 See, for example, Huse, M. (2013): «Styreutvikling, styre-evalueringer og verdiskaping.» Magma 7/2013. Huse, M.& Søland, A. I. (2009): «Styreledelse – styret som team ogprosessorientert styrearbeid.»


an effective contribution to company success. Thebest and most value-adding boards are composedof individuals possessing the right competencegiven that company’s challenges, who apply theirexpertise effectively, and devote sufficient time toboard work47. Such boards are forward-lookingand provide a long-term perspective, which isimportant in a world where upheaval is happeningfaster and the company’s management areemployed in shorter periods than previously. Inaddition, the best boards play an active role intheir company’s strategy formulation, risk mana-gement and succession planning.

Competence development for board members

The board should make arrangements for theboard members to gain the requisite competencefor discharging their board duties and put measu-res in place to raise the level of competence as andwhen required. It will often be appropriate to runan induction programme for new board membersto provide, for example, a detailed introduction tothe company and its strategy, and a description ofits sector, competitors and suppliers48. As part ofthe induction programme, board members shouldmeet key individuals within the company such asmanagement, employee representatives, majorshareholders and any key accounts. Successfulboards often arrange for competence develop-ment for the board members to reinforce theboard’s identified competence requirementsgoing forward. Often, major shareholders will beable to assist as and when appropriate by makingmain guidelines and recommendations of rele-vance for corporate governance available or bycreating arenas for knowledge-sharing betweenboards47.

The board’s role in the company’s long-term strategy work

The board shall undertake strategic managementof the company. It ensues from the state’s princi-ples of corporate governance (Principle 4) that theboard is expected to elaborate explicit objectivesand strategies for the company within the con-straints of its articles of association, and to reporton these. In order to contribute actively to thecompany’s strategy formulation it is important to

set aside time for addressing strategic topics atboard meetings; that the board has the requisitebackground knowledge (for example, detailedinsights into the sector, the company’s differentbusiness areas, macro-trends and competitiveconditions) and that the board is involved throug-hout the process. Some successful boards have alist prepared of viable strategies detailing the con-tent and risk factors of each alternative so that theboard can consider the full scope of options availa-ble47. In the implementation phase, the boardshould ensure that the strategy is rolled out tobest effect.

The board’s role in the company’s risk-management activities

By virtue of their executive responsibility forcompany management, boards are expected todefine the company’s risk profile and ensure thatthe company has put in place effective internalcontrol procedures, adequate systems and resour-ces for ensuring legal compliance. This includeseffective systems for risk management reflectingthe scope and nature of the company’s activities;see Principle 7.

Effective risk management entails in-depthfamiliarity with the company’s main risk exposurethrough, for example, management’s reporting tothe board, and ongoing dialogue with companymanagement on the company’s risk appetite. Riskshould be an integral element of corporate stra-tegy formulation to ensure that the board and themanagement are fully apprised of the types of riskposed by different strategies47.

For management, the simplest approach is tomaintain awareness of the commercial risk facedin day-to-day conduct of business. For this reason,it is crucial for boards to be aware of fundamentaland long-term company risk.

The best boards ensure that risk assessmentsare integrated in the company’s core business,and that risk is a key component of decision-support for the company and board47. The boardshould ensure that the company has governancesystems and a risk-management culture alignedwith the company’s established risk mitigationstrategy.

Board appraisal of the effectiveness of risk-management systems should include organisatio-nal factors. This entails questions of whether toassign roles such as a compliance officer, chiefrisk officer and internal auditor with specificresponsibility for, and a direct board reporting

47 McKinsey & Company (2014): «Statlig eierskap, Rapport tilNærings- og fiskeridepartementet.»

48 Huse, M. & Søland, A. I. (2009): «Styreledelse – styret somteam og prosessorientert styrearbeid.»


duty regarding compliance, due diligence and riskmanagement49.

The board’s role in succession planning

Effective boards place added emphasis on fol-lowing up on long-term talent nurture within thecompany as part of company succession plan-

ning47. Boards tend to have a less direct contactwith individuals with leadership potential than thechief executive, who may be keen to retain a talen-ted middle manager for longer than is ideal for themiddle manager’s professional development. Theboard will also be familiar with the company’s stra-tegy and should ensure that talent nurture is alig-ned with strategy considerations. Early identifica-tion and mentoring of executive candidates boostsorganisational resilience and facilitates long-termsuccession planning.

The best boards in this area perform regularassessment and follow-up of multiple talents inorder to determine which candidates have thepotential to take up key positions in the future.Candidate screening might, for example, be car-ried out by each executive presenting three to fiveup-and-coming talents, providing backgroundinformation and achievements over the last threeyears and proposing a discussion within the boardon further follow up of the candidates. The boardshould also seek to meet with the talent group atregular intervals.

49 See OECD (2014): «Risk Management and CorporateGovernance.» The report covers risk management practiceand corporate governance in the 27 countries that partici-pate in the OECD Corporate Governance Committee. Thesection on practices in Norway (see, for example, the con-clusions of pp. 45 and 46 of the report), indicates that therecommendations regarding risk management and internalcontrols in the Norwegian Code of Practice for CorporateGovernance (Topic 10) does not appear to have taken onboard the lessons from Enron and other major corporatescandals and the global financial crisis in 2008. Areas thatshould be addressed by national codes of practice for cor-porate governance include how companies address riskmanagement, how risk assessments should be linked tostrategy, the creation of a risk management framework andthe appointment of a chief risk officer reporting directly tothe board. The OECD also points to how few companies inNorway have an internal auditor (10 per cent) as comparedwith Norway’s European counterparts.

Figure 8.2 Board member remuneration in different countries.

Source: Heidrick & Struggles.

Average total compensation to board members in Europe

000’ Euro

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Board remuneration

One factor conducive to optimal board composi-tion is remuneration commensurate with theboard’s responsibility, competence, time commit-ment and corporate complexity. Appropriateremuneration may be important in attracting rele-vant competence to the company and ensuringthat board members devote sufficient time toboard work, although this should not be the mainmotivation for serving on a board.

A survey conducted by Heidrick & Struggles(2011) indicates that board remuneration in Nor-way is at a low level compared with Europeancounterparts; see Figure 8.2.

Since 2010, the Norwegian Institute of Dire-ctors has published an annual comparative surveyof board remuneration adopted at general mee-tings in companies listed on Oslo Børs and compa-nies in which the state has a holding. The 2013survey50 reveals that Statoil, Telenor, DNB, YaraInternational and Norsk Hydro, for example, in allof which the state is a major shareholder, andwhich are among the largest companies in termsof market value on the stock exchange, do notrank among the top ten companies for chair of theboard or board member remuneration.

The government’s declared aim is to maintainboard remuneration at a moderate level. However,it is equally important for board remuneration tobe at a level conducive to appropriate and reliableboard competence, and which is commensuratewith the board’s responsibility and workload.

Owner assessment of board performance

Prior to board elections, the state will assessfactors such as the composition of a board, itsprocedures (internally within the board and withcompany management), competence, perfor-mance, goal attainment and whether contributionsto the company’s value creation are satisfactory orwhether changes may be needed to the board; seePrinciple 7 of the state’s principles of corporategovernance.

8.3.3 Corporate social responsibility

The government expects all Norwegian compa-nies to demonstrate corporate social responsibi-lity (CSR), whether under private-sector or public-

sector ownership, and regardless of whether theiractivities are located in Norway or abroad. Thegovernment expects companies in which the statehas a holding to work systematically on their CSRand to be exemplary in their respective fields. Thereason why the state, in its capacity as an owner,sets out expectations for company commitment toCSR is that the government believes that soundmanagement of such matters helps to safeguardthe state’s shareholder assets and that companiesin which the state is a shareholder are to demon-strate duly ethical conduct.

CSR in the present White Paper is understoodas the responsibility companies are expected toassume for people, society and the environmentwhere these are impacted by the company’s activi-ties; see the State’s principles of corporate gover-nance, chapter 8.2.11.

The government has both general and morespecific expectations of companies in the field ofCSR. The specific expectations relate to four the-matic key areas: climate and environment, humanrights, employee and worker rights and anti-cor-ruption. The government’s expectations are infor-med by, and based on, national and internationalstandards, conventions and reporting norms.

Company boards are responsible for assessinghow expectations from the state in its capacity asan owner may best be honoured and implementedeffectively.

The government would point to the wide-scaleprogress made in the area of CSR in recent years.The following outlines some of the key trends inthe field before it presents the government’sexpectations of companies under state ownership.The trends concern aspects such as increasedenactment of requirements in law, and the emer-gence of internationally agreed standards adoptedby Norway. Increasing awareness, appreciationand expectations are also observed among marketparticipants.

Developments in the field of CSR

In the climate and environmental domain, there isincreasing awareness of national and internationalclimate targets and the means of achieving them.In this context, the role of business and industryis focal, as is the question of how each individualcompany can contribute to achieving the targets.A debate is currently ongoing concerning thenature of future changes in company frameworkconditions as a result of potential new climatemeasures in Norway, the EU and globally. The EU2030 framework for climate and energy policies

50 See Aftenposten of 16 February 2014 where the 2013 boardremuneration survey (Styrehonorarundersøkelsen 2013) isdiscussed.


may potentially have great impact on economicactivity both within and outside Europe. The planis for the international climate change summitsconducted under the aegis of the UN to result in aglobal treaty to reduce emissions in line with thetwo-degree target. If realised, this will alter the fra-mework conditions for economic activity world-wide.

In the wake of these international processes,there is mounting awareness of company riskexposure and vulnerability to climate change andclimate policy. Increased climate risk may adver-sely impact the value of companies. Meanwhile,there has been a substantial increase in funds andother investors focusing on sustainable invest-ments; see chapter 2.3.4.

An important contribution to the field ofhuman rights has been the introduction of the UNGuiding Principles on Business and HumanRights (UNGP). These were adopted by the Uni-ted Nations Human Rights Council in 2011. TheUNGP have been implemented widely, for exam-ple, within the OECD, EU and UN and throughefforts to draw up national action plans. TheOECD has incorporated the UNGP in the OECDGuidelines for multinational enterprises; the EUhas initiated implementation efforts within certainsectors, and within the UN, the UNGP are integralto the UN Global Compacts programme. Norwayis among the countries that are in the process ofpreparing an action plan for implementation ofUNGP, an undertaking for which the NorwegianMinistry of Foreign Affairs holds principalresponsibility.

Major companies with international interestsare increasingly adopting the UNGP precautio-nary approach in risk identification and preven-tion51. This also applies to a number of the compa-nies in the state’s portfolio.

Increased awareness of the need to respecthuman rights and employee and worker rights inthe value chain is a prominent trend. Manycompanies have experienced that illegal or other-wise unacceptable conditions in the value chainmay adversely impact their reputation and finan-cial results. New guiding principles have beenestablished in this field under pressure fromemployer and employee unions and civil society.In the case of Norway, special mention should bemade of the advocacy activities of the Ethical Tra-ding Initiative Norway.

In the field of anti-corruption there has beenconsiderable progress in recent years. The imple-mented legislation in Norway on this area wasenacted more than a decade ago (see the anti-cor-ruption provision in the Penal Code incorporatedin 2003) and also encompasses the conduct of51 UN Global Compact Leaders Summit 2013.

Box 8.2 UN Guiding Principles on Business and Human Rights

(UNGP)

On 16 June 2011, the United Nations HumanRights Council endorsed the UN Guiding Prin-ciples on Business and Human Rights(UNGP); a landmark in the internationalcommunity’s commitment to human rights.Norway led the negotiations on the UNGP wit-hin the United Nations Human Rights Counciland continues to oversee this theme within theframework of the UN Human Rights Councilthrough an inter-regional cooperation withRussia, India, Argentina and Ghana.

The UNGP set out non-binding expectati-ons of, and recommendations for, businesses,based on existing international obligations onthe part of states.

In only a few years time, the UNGP haveemerged as the prevailing international stan-dard for how businesses are expected toaddress human rights challenges. The princi-ples are incorporated in a number of relatedguidelines designed to promote responsiblecorporate conduct in all business activities.

The UNGP are aimed at all states and allenterprises, regardless of size, sector, loca-tion, ownership or structure. The UNGPencompass three pillars:– The obligation of states to guarantee

human rights through national legislationand to protect against human rights abuseswithin the states’ own jurisdiction, inclu-ding by third parties such as business andindustry.

– The responsibility of business and industryto respect human rights over and abovecompliance with the laws and rules in thecountries in which they operate, and arecommendation to carry out human rightsdue diligence in fulfilling that responsibi-lity.

– The obligation of states to ensure access tovarious forms of judicial and non-judicialgrievance and remedy mechanisms.


Norwegian citizens abroad. Under Norwegianlaw, all forms of corruption are criminal offences.Norwegian companies with extraterritorial activi-ties may also be subject to a number of differentanti-corruption acts, including the UK Bribery Act2010 and the US Foreign Corrupt Practices Act(FCPA). The anti-corruption acts also direct atten-tion at preventive measures and compliance withguidelines.

A number of individual cases have resulted inincreased awareness among Norwegian compa-nies as regards safeguards against corruptpractices. Norwegian case law has resulted inincreased fines for corrupt practices, while suchfines in countries like the USA are far higher. Forany violation of the anti-corruption rules, compa-nies are now liable for corporate penalties, inclu-ding the detrimental effects of being excludedfrom public procurements.

Reporting is one of the main instruments incompany-level commitment to CSR. However,there is now general agreement that the volume ofreporting from companies has become excessiveand that focal issues are overshadowed by lessrelevant information. Responding to this problem,in 2013, the new version of the internationallyrecognised reporting standard, Global ReportingInitiative (G4) introduced the materiality principleas a main principle. Materiality concerns the factthat companies both address and report on mat-ters that are key to that business’s impacts on peo-ple, society, climate and environment. In Norway,with effect from the financial year 2013, a require-ment was introduced for CSR reporting for largecompanies; see Section 3–3C of the AccountingAct. Increased emphasis on reporting and materi-ality is linked to the requirement for increasedtransparency concerning corporate activities.Requirements regarding publicly disclosableinformation are increasingly being enacted in law.The government would also draw attention to theEU’s commitment in this area, which may ultima-tely result in new directives of relevance to Nor-way.

Concerns with regard to so-called tax havenshave been mounting in recent years. Extensiveefforts are ongoing internationally to prevent taxevasion and non-disclosure of financial informa-tion through the use of tax havens. In Norway,requirements for country-by-country reportinghave been introduced for large companies and theissuers of listed securities in the extractive andforestry industries. In addition, in recent years,Norway has concluded tax information exchangeagreements with a number of new countries.

Progress has also been made in stakeholderdialogue as a method of ensuring that third par-ties affected by company activities are duly takeninto account, and as a means of identifying andminimising risk. Many of the companies, inclu-ding those in which the state has a holding, areincreasingly conducting stakeholder dialogues.Civil society has played an important role in thisarea by asserting explicit expectations. This isdemonstrated, for example, through guiding prin-ciples for stakeholder dialogue prepared in 2013by KOMpakt, the government’s ConsultativeBody for Corporate Social Responsibility.

8.3.3.1 Overarching and general expectations

The government believes that the state in its capa-city as an owner must exercise diligence in rela-tion to its companies’ commitment to CSR. Atten-tion on CSR issues has increased, and there isgrowing awareness that diligent fulfilment of CSRis conducive to corporate commercial growth. Inthe government’s opinion, this provides for a furt-her development of the state’s expectations as theowner of companies.

In this White Paper to Parliament, increasedemphasis is placed on the following aspects: Cla-rity from the state regarding the role and respon-sibility of boards in respect of CSR, the materialityprinciple in connection with reporting and elabo-ration of stakeholder dialogue as a procedure fordetermining the impacts on people, society, cli-mate and environment and in the interests ofimproving corporate risk management. In addi-tion, expectations for the specific areas have beenelaborated in light of developments in this domainin recent years.

Norwegian companies are subject to differingexposure to challenges and risks in differentareas. The government therefore proposes thatcompanies should observe the «comply orexplain» principle in combination with the materi-ality principle in adapting their commitment andreporting to their business activities. The «complyor explain» principle entails that boards are expec-ted to account for any deviation, which in somecases may be justified, from the state’s expectati-ons.

Board follow-up on CSR

The government has found that in companies inwhich the state has a holding there is also a needfor increased attention on the responsibility of the


board and the manner in which the board addres-ses CSR.

Increased attention on the part of companyboards, will, in the government’s opinion, be con-ducive to improved risk management and as suchserve to protect shareholder assets. It is left to thediscretion of the boards as to how they intend tofulfil their responsibility for CSR. One option, inline with current practice in some companies, is tolodge responsibility for preparation of the board’sdeliberations on CSR with a dedicated boardcommittee.

The government expects that:– A commitment to CSR is embedded in

company board work, that boards play anactive and prominent role, and that they acco-unt for significant aspects of CSR in theirannual report.

– The boards arrange for the necessary boardcompetence development in the relevant CSRdomains.

– The companies should be frontrunners in thecommitment to CSR in their sectors. Thecompanies actively abide by, and assist in ela-borating, best corporate practices in areas ofrelevance for their business.

– The companies have ethical guidelines in placeand make them publicly available.

– The companies prepare guidelines for theirwork on CSR and the guidelines are publiclyavailable. The companies incorporate theircommitment to climate and environment,human rights, employee and worker rights,and anti-corruption in their guidelines.

– Companies with international operations signup to the UN Global Compact. All companiesare expected to be familiar with and commit toobservance of the Global Compact’s ten princi-ples and to consider signing up to the UN Glo-bal Compact.

– Companies with extraterritorial activities orinternational supplier chains familiarise them-selves with and follow the recommendations ofthe OECD Guidelines for Multinational Enter-prises.

– Companies adopt the ILO’s eight core conven-tions as the foundation for their activities.

– Companies report on their CSR performance,placing emphasis on key challenges, and targetand performance indicators. Companies of acertain size employ the internationally recogni-sed reporting standard, Global Reporting Initi-atives.

– The companies have effective grievancemechanisms within their own organisation.

– The companies maintain dialogue with key sta-keholders as and where relevant to determinewho is impacted by the company’s activities,and in order to reduce risk.

The government believes that greater knowledgeof international norms, conventions and guideli-nes such as the ILO’s core conventions, the UNGlobal Compact, the UNGP and the OECD Guide-lines for Multinational Enterprises, will serve toreduce the risk of companies contributing toadverse human rights impacts and violations ofthe employee and worker rights.

8.3.3.2 Climate and environment

The business and industry’s environmentally cor-porate social responsibility imply that regards forthe environment and resource management isintegrated to corporate financial decision-making.In addition to compliance with national and inter-national environmental requirements, the compa-nies should also take proactive measures toreduce their adverse environmental impacts –over and above the national and internationalrequirements. This may contribute to cost reducti-ons, a better strategic platform for business activi-ties in the long term, and new market opportuni-ties. Business and industry can contribute to redu-cing adverse environmental impacts throughmore environmentally friendly and resource-effici-ent operations at the individual company level.Companies can also develop processes or techno-logies for more efficient use of scarce resourcesand reduce their greenhouse gas emissions. Highenvironmental standards on the part of suppliersand in the value chain are also key factors inenvironmental CSR. This applies to all companies,regardless of their ownership structure.

The need for effective measures to counter cli-mate change has increased. Efforts are beingundertaken internationally to limit greenhousegas emissions in order to achieve the two-degreetarget. Against this background, the governmentis anticipating changes in the international climateregime. These changes will potentially have greatimpact on business and industry. This is part ofthe reason for the increased attention among mar-ket participants on climate policy trends and theirimplications for business.

As an owner, the state must protect the assetsin its portfolio. In light of this, the governmentbelieves it to be essential for companies to develop


a sound understanding of the risk entailed bypotential changes in operating conditions ensuingfrom realistic climate change scenarios and natio-nal and international climate initiatives. Climatepolicy measures are also potential drivers oftechnological advances and can pave the way fornew market opportunities. The companies shouldtake a well-informed approach to the businessopportunities presented by such changes.

The government expects that:– Companies have a sound understanding of the

risk posed to their activities by climate changeand climate policy measures.

– Companies are at the forefront in climate andenvironmental performance in their sector,including initiatives to reduce greenhouse gasemissions.

– Companies are well-informed of the benefits tobe reaped from early adaptation to new climateand environmental requirements.

8.3.3.3 Human rights

The government emphasises that the authoritieshave a duty to protect human rights, and that thestate is bound by several international conventi-ons which obligate Norway to protect universalhuman rights. This means that only states can beheld legally responsible for human rights abuses.

However, human rights impose certain impor-tant constraints on business undertakings. By vir-tue of requirements for national legislation andother instruments, the human rights conventionsrequire states to ensure that business and indus-try do not violate human rights. Business andindustry can also be urged to respect humanrights through non-binding guidelines.

Aside from the harm caused to the victims,any conduct contributory to human rights abusesmay result in loss of reputation and other substan-tial losses for a business. A more systematicapproach by companies to prevent human rightsabuses serves to reduce this risk. Both the OECDand the EU have issued their own guidelines oncorporate social responsibility in line with the UNGuiding Principles on Business Rights (UNGP).The government assumes that Norwegian com-panies are familiar with the UNGP and the incor-poration of the UNGP in the OECD and EU guide-lines.

The government expects that:– Companies in which the state has a holding

respect universal human rights as they are defi-

ned in international conventions, in all theirundertakings, and in their dealings with suppli-ers and business partners.

– All companies in which the state has a holdingincorporate relevant human rights aspects intheir activities.

– Companies carry out human rights due dili-gence in line with the UNGP recommendationsto prevent their involvement in adverse humanrights impacts and to account for how theyaddress the company’s human rights impacts.

8.3.3.4 Labour rights

Companies in which the state has a holding areexpected to respect and promote decent workingconditions which safeguard fundamental labourstandards and rights and under which employeesare paid a living wage. Companies are assumed tobe familiar with national legislation and internatio-nal labour conventions. The eight core conventi-ons of the ILO are focal and are regarded as set-ting the standards for labour and employment.The core conventions encompass fundamentalprinciples and rights at work: freedom of associa-tion and the right to collective bargaining, the eli-mination of all forms of forced and slave labourand discrimination, and the elimination of childlabour. The ILO member states are bound byinternational law to apply the core conventions,which are also regarded as integral to humanrights and comprised by the UNGP.

The Norwegian labour market is generallywell-regulated and there is an extensive coopera-tion between employees and employers. This isnot the case in many of the countries in whichNorwegian companies operate or have businesspartners and suppliers. Norwegian companieshave the potential to promote employee and wor-ker rights in other countries by observing best-practice standards in the individual countries.

The government expects that:– Companies adopt the ILO’s core conventions

as a minimum standard for their activities, andthat these are followed up in the value chain.

– Companies are leaders in their sector inoccupational health, safety and the environ-ment (HSE) and actively address these issueswith their suppliers and business partners.

– Companies assess the need to sign global fra-mework agreements with the trade unionmovement applicable to business operationsworldwide.


– Companies act responsibly in organisationalrestructuring processes, implementing thesein dialogue with employees and local communi-ties.

8.3.3.5 Commitment to anti-corruption practices and transparency in financial transa-ctions

Corruption is a criminal offence under both Nor-wegian and international law. Norwegian anti-cor-ruption legislation applies regardless of whichcountries a Norwegian company operates in, andcorrupt practices abroad are liable for prosecutionin Norway. Corruption poses a threat to the ruleof law, democracy, human rights and socialjustice. Corruption also hampers economicgrowth and distorts competition. The governmentexpects this to set the standard for the commit-ment by Norwegian companies to prevent corrup-tion.

Transparency and public disclosure are effe-ctive instruments in anti-corruption efforts. Cash-flow transparency is also crucial in upholdingcompanies’ tax responsibilities in the countrieswhere they operate. In many developingcountries, low tax revenue is one of the primarycauses of poverty. One of the causes of low taxinflow is lack of transparency in the global finan-cial system.

More targeted efforts by boards and compa-nies in this area will serve to reduce the risk ofcorruption and thereby contribute to value crea-tion for companies and owners. This is conduciveto a more systematic approach to anti-corruptionmeasures and hence serves to prevent involve-ment in corruption, loss of reputation and finan-cial loss.

The government expects that:– Companies demonstrate the highest possible

degree of transparency as regards cash flows,including taxes.

– Companies with international operations applyOECD guidelines on taxation, including thatthey seek to avoid the use of tax havens that donot apply the standards of the Global Forum onTransparency and Exchange of Information forTax Purposes and which decline to concludetax information exchange agreements withNorway.

– Companies have guidelines, systems and mea-sures in place to prevent corruption, and toaddress possible or borderline violations thatmight be detected in this area.

– Companies perform diligent assessments ofcorruption-related issues in relation to theirundertakings. If such assessments point to rea-sonable doubt as to whether behaviours maybe construed as corrupt, the companies areexpected to refrain from such behaviours.

8.3.3.6 The government’s follow-up of corporate social responsibility

The follow-up of CSR performance will be conduc-ted through the owner dialogue at quarterly mee-tings and/or at annual meetings devoted to CSR.In specific cases, additional follow-up of compa-nies may be necessary. Company and boardcommitment to CSR will form part of the evaluati-ons conducted in preparation for board elections.The government would also refer to the annualreport on the state’s direct ownership, the StateOwnership Report, which reviews the CSR perfor-mance of each individual company.

The government recognises that voluntaryorganisations possess expertise and experience ofrelevance to the state as an owner with regard tocompany commitment to CSR. In light of this, adialogue has been established with voluntaryorganisations concerning CSR. The governmentintends to continue this dialogue. Reference isalso made to the government’s general commit-ment and work related to CSR, and to KOMpakt,the government’s Consultative Body for Corpo-rate Social Responsibility.

8.3.4 Executive salaries

The government wishes to reassert the mainprinciples of the state’s policy on executivesalaries in companies in which the state has a hol-ding; see the current guidelines. The state’s policyis that the determination of executive remunera-tion shall be the board’s responsibility and thatexecutive pay shall be competitive but not abovethose of other similar companies. The emphasisshall be on moderation.

Based on experience and practice in recentyears, the government recognises the need toadjust the state’s policy on executive salaries inrespect of three aspects. These concerns whichcompanies should be subject to the guidelines;pension terms; and how wholly-owned companiesshould implement the state’s policy.

In group holdings in which the parentcompany is wholly owned or effectively controlledby the state (shareholding in excess of 90 percent), the government’s position is that the state


policy on executive salaries should also comprisethe wholly-owned subsidiaries in a given group ofcompanies, even if the state does not attend theirgeneral meetings. The government asserts this tobe a fair and proper position given that the inter-nal corporate organisation of such groups shouldnot be determinative for which corporate entitiesare comprised by state pay policy. In recognitionof this, the government proposes an amendmentto the articles of association of wholly ownedcompanies articulating that the formalised exe-cutive salary disclosure before the general mee-ting of the parent company shall also state howthe board’s remuneration policy is to be imple-mented in wholly-owned subsidiaries. Further, thegovernment will be assessing whether partially-owned subsidiaries of companies controlled bythe state should also be comprised by the policy.

As regards employee pensions, the currentstate policy is that an employer pension contribu-tion linked to pension entitlements in excess of 12G (12 times the Norwegian National Insurancebase amount (G)) should be a defined-contribu-tion pension, limited to 30 per cent of the basesalary, and that the pension fund should be prote-cted externally, i.e. assured by a separate legalentity. The requirement for external pension-fundinsurance introduced by the Stoltenberg Govern-ment in 2011 prevents employees from losingaccrued entitlements in the event of theiremployer’s bankruptcy. However, this form of pen-sion scheme has not proved feasible since, to date,no pension products are available on the marketto assure pension contributions in excess of 12 G.For some companies, the workaround has been tocover the surplus by the company paying the con-tribution as an operating expense. Given thissituation, the government maintains that the stateas an owner should not endorse pension entitle-ments in excess of 12 G. The government holdsthat this will be consistent with the principle forsuch pensions not to be financed as an operatingexpense, and will serve to reinforce the generalpolicy that the basic fixed salary should be themain component of any pay package. The govern-ment also maintains that this type of measure willpromote increased transparency regarding thelevel of executive salaries.

In companies where the state is the soleowner, or has a holding of more than 90 per cent,the government expects conformance with thestate policy on executive salaries.

The policy currently permits variable remune-ration up to the equivalent of six months’ fixedsalary. Variable pay must be based on objective,

definable and measurable criteria’s and factorsthat the executive is able to influence. Variable payschemes should comprise a number of relevantmetrics and be transparent and comprehensible.Variable pay currently accounts for a substantialproportion of pay packages in a few of the compa-nies in which the state has a holding.

The government would point to the comple-xity of assessing variable pay schemes. Thegovernment’s opinion is that a detailed reviewshould be performed of such schemes before thegovernment presents its policy on executivesalaries.

The same applies to the companies’ long-termincentive (LTI) schemes. These were introducedlargely to compensate for the loss of share optionsfrom 2006/2007 and as a way of maintainingincentives for senior executives to grow sharehol-der assets. The format of LTIs varies from onecompany to the next, but essentially involves fixedannual remuneration calculated as a percentage ofthe fixed basic rate of pay. The post-tax LTI paymust be invested in shares with a commitmentterm of at least three years. Given that some yearshave now elapsed since the schemes were intro-duced, the government believes that detailed revi-ews are now merited in order to determine,among other things, how such schemes addressthe distinction between fixed and variable pay.

Taking account of these factors, the govern-ment will be presenting its policy on executivesalaries once the above-mentioned reviews havebeen completed and will inform the Storting acco-rdingly.

8.3.5 Research, development, innovation and expertise

Commercial companies in which the state has aholding are required to operate their business inthe best interests of the company and its sharehol-ders over time. The government would stress thatcapacity for achieving the required restructuringand innovation is often crucial for the futuregrowth and competitiveness of individual compa-nies. But it is not least important for business andindustry and the economy as a whole. Realisationof adaptability and innovation is key to value crea-tion and to sustained national welfare. Increasedvalue creation is achieved primarily when resour-ces are put to new and more effective use.Through innovative production methods and bydeveloping new goods and services, companiescan produce superior products at lower cost ordemand a higher price for what they produce.


Enhancements of this kind increase company pro-fitability but also underpin the welfare society.International competition is a vital stimulus forinnovation and adaptability. Norwegian businessand industry continues to excel at adapting totrends in international competition. In the inte-rests of achieving efficient operations and satis-factory earnings, the government expects theboards of companies in which the state has a hol-ding to stay abreast of technological and markettrends and to demonstrate agility in realigningtheir operations efficiently at any given time.

Corporate competitiveness is influenced by acompany’s ability to apply and develop new exper-tise and new technological and organisationalsolutions. For this reason, the government main-tains that enterprises should be continually alertto the value of investing in research and develop-ment and of commercialising their research.Companies should likewise be committed to dis-seminating their research results, but also tocommercialising the results of third-party rese-

arch centres and companies. The national fundingsystem should be used where it can supportcompanies’ own research drives.

A number of companies in which the state hasa holding are leaders in Norway, not least in rese-arch and development. Corporate commitment tofostering high-powered technological innovation,strong business clusters, offshoots and increasedvalue creation boosts competitiveness in the Nor-wegian economy.

Access to a specialised workforce is an increa-singly important competitive factor for companies.Norway generally has a highly educated popula-tion, and employees in both the public and privatesectors are consistently well qualified. As anowner, the government aims for each company tomaintain a dedicated recruitment policy, and forcompanies to update and develop employeecompetence so that both the companies and theindividual employees are well equipped torespond to new requirements and readjustmentneeds.

Figure 8.3 One of the aluminium industry’s leading research centres is located at Norsk Hydro’s plant in Årdal.

Photo: Norsk Hydro.


8.3.6 Diversity and equality

A diverse range of skills and know-how may bepositive factors for a company’s development. If acompany possesses diverse and complementaryskills, this provides a broader basis for sound deci-sion-making. This in turn extends the company’sinnovation capacity, equipping it to meet challen-ges and thereby achieve more profitable develop-ment. Companies should therefore maintain awa-reness of the value of diversity in their organisa-tion. Diversity in this context denotes, for exam-ple, differences in theoretical and practicalknowledge, age, gender, cultural and geographi-cal background.

Ensuring that equality and diversity are firmlyembedded in corporate human resources policiesis a key management task. Boards are expected toensure that human resources policy is characteri-sed by inclusivity and diversity and that compa-nies in which the state has a holding have establis-hed strategies and implemented initiatives to pro-mote equality and diversity in their organisations.The number of women holding executive posts inNorwegian companies remains low, at the sametime as women account for more than half ofthose pursuing higher education in Norway.Company succession planning should incorpo-rate strategies for making the most of leadingexpertise in the company, including how toencourage more women to seek senior manage-ment positions. The government aims to increasethe number of female chairs on the boards ofcompanies in which the state has a holding.

8.4 Contact with companies

The state’s Principle 1 of corporate governanceemphasises the equitable treatment of all share-holders in companies in which the state is a jointshareholder. This encompasses information recei-ved by the state, in its capacity as an owner, from agiven company and the contact that exists withthe state as an owner.

Information exchanges between a companyand its owner(s) can be done via various channels.In addition to quarterly and annual reports, otherpublic information and the general meeting, regu-lar liaison meetings are held with company mana-gement as a key element in the follow-up processby most ministries exercising state ownership.The Ministry of Trade, Industry and Fisheries, forits part with a few exceptions, holds quarterlymeetings, along with annual meetings on CSR

with the companies where it manages ownership.These meetings may involve financial perfor-mance review, communication of the state’sreturn and dividend targets, briefings and talksconcerning corporate strategy, issues surroun-ding CSR etc. Such meetings are conducted in linewith customary practice between listed compa-nies and major investors52. The meetings are con-ducted within the parameters prescribed by cor-porate and securities legislation, not least asregards equal treatment of all shareholders.Meetings are usually attended by representativesof the company’s administrative management, butit is up to the boards of the companies to deter-mine who represents the company at meetings,including whether members of boards also shouldbe present53. In some cases, the owner may speci-fically request board representation.

The framework for corporate governance doesnot prevent the state, like other shareholders,from raising matters that should be considered bythe companies in relation to their business andgrowth. Any opinions conveyed by the state atsuch meetings are to be regarded as suggestionsregarding the company’s administration andgovernance. The board is responsible for mana-ging the company in the best interests of thecompany and the shareholders and to that endmust make the necessary deliberations and deci-sions. Matters requiring the endorsement of theowner must be addressed at the general meetingin the customary manner.

8.4.1 Particular about information exchange in companies wholly owned by the state

Some of the companies wholly owned by the stateare required by law to submit the minutes ofboard meetings to the owning ministry. Thisapplies to state-owned enterprises and Vinmono-polet. The regional health trusts, as state enterpri-

52 The commentary on topic 13 Information and Communica-tions in the Norwegian Code of Practice for CorporateGovernance states that «In addition to the dialogue withthe company’s owners in the form of general meetings, theboard of directors should make suitable arrangements forshareholders to communicate with the company at othertimes. This will increase the board’s understanding ofwhich matters affecting the company from time to time areof particular concern to shareholders».

53 See topic 13 of the Norwegian Code of Practice for Corpo-rate Governance which recommends that «The board ofdirectors should establish guidelines for the company’scontact with shareholders other than through general mee-tings».


ses, are required to submit an annual perfor-mance report to their owning ministry.

Some of the ministries exercising stateownership hold regular meetings with the boardsof enterprises wholly owned by the state. As brie-fings, these are the equivalent of the quarterlymeetings discussed earlier. In wholly ownedcompanies where such regular meetings are notcustomary practice, the ministries will discusswith the chair of the board if it is desired to intro-duce. Matters requiring the endorsement of theowner must be addressed at the general meeting/enterprise general meeting.

8.5 The state’s various roles

The state exercises a number of different roles,such as that of policy formulator, financing autho-rity, market regulator, supervisory authority andowner. A conscious attitude to keeping the state’srole as an owner separate from its other roles isimportant for both the legitimacy of state owners-hip and for the state’s other roles. State authorityis usually exercised by issuing statutes and regu-lations; by applying conditions to concessions aut-horised in law; through licensing, by concludingagreements, and by making executive decisionson individual matters. A related form of authorityis exercised by applying economic instrumentssuch as procurement of public services and char-ging taxes and duties. The state also exercisesinfluence through dialogue with both public-sector and private-sector companies, for example,as regards expectations regarding corporate self-policing and CSR. The state also has a role as anational supervisory and complaints body. Thisrole is often kept separate from other state manda-tes in order to maintain confidence in the imparti-ality of state decisions.

In order to maintain the legitimacy of thevarious roles and of the state as an owner, thestate should be aware of the role it has assumed atany given time, and must not abuse its power andinfluence in other roles to promote its interests asan owner. Conversely, in its other roles, the statemust not exploit its power and influence to makepolitical decisions or exercise authority in a man-ner that would disfavour state-owned enterprisesover companies under private ownership.

For these reasons, the state refrains fromexercising its authority as a public administratorin its corporate governance. Companies in whichthe state has a holding are therefore subject toregulatory and supervisory authorities in the

same way as companies in which the state has noholdings.

8.5.1 Organisation of the state’s ownership administration

Administration of direct state ownership is distri-buted among a number of different ministries. Ifthe same ministry manage sectoral regulation,responsibility for sectoral supervision and corpo-rate ownership to a company, this gives the oppor-tunity to practice consistent policy, but also putsgreater demand for stringent internal checks toavoid confusion of roles. A number of processeshave been in progress for some time to separateout the state’s roles as an owner and as an exe-cutive authority. Ownership of the majority ofcompanies with commercial objectives is cur-rently managed by the Ownership Department ofthe Ministry of Trade, Industry and Fisheries inline with the OECD recommendation for the grea-test possible coordination of commercial owners-hip54, while companies with sectoral-policy obje-ctives are administered by the ministries responsi-ble for the respective sectors. Notable exceptionsinclude the ownership of Statoil ASA, which isadministered by the Ministry of Petroleum andEnergy.

The arm’s length commitment to drawing asharper organisational distinction between thestate’s differing roles and to consolidate as muchas possible of the commercial, strategic owners-hip with a single entity in the central administra-tion, has served to professionalise, streamline andboost confidence in the state’s ownership adminis-tration. The government maintains that ownershipof commercial companies should remain underthe national ownership entity currently lodgedwith the Ministry of Trade, Industry and Fis-heries unless special considerations dictate other-wise. The government will consider further con-solidating of direct state ownership of commercialcompanies and certain other companies underthis entity, not least with a view to further separateof the state’s ownership role from that of otherroles.

54 Consequently, in line with the OECD recommendation,companies such as Arcus AS, BaneTele AS, Cermaq ASA,DNB ASA, ECC AS, Entra Eiendom AS, Flytoget AS, Grø-degaard AS, Mesta AS, NOAH Holding AS, Norsk Eien-domsinformasjon AS, Norsk Medisinaldepot AS, SAS AB,Secora AS, SIVA SF, SND-Invest AS, Statkraft SF andTelenor ASA have been transferred from other ministriesto what is now the Ministry of Trade, Industry and Fis-heries since the late 1990s. A number of these companieshave subsequently been privatised.


8.5.2 Further development of the state’s exercise of ownership

Trends and increased attention on new aspects ofstate ownership, as set out in chapter 2.3, point tothe increasing challenges of exercising soundstate ownership. Good corporate governance onthe part of the state serves to boost the value ofcompanies. The state should be an exemplaryowner in promoting good corporate governance.Competent ownership entities within the minis-tries are key determinants of exemplary directstate ownership. Although the objectives forcompanies in which the state has holdings differfrom one company to the next, state ownershipadministration overall has many common traits55.Corporate governance should be practised ascompetently and consistently as possible acrossthe ministries, and effort should be made to facili-tate increased cooperation on matters of owners-hip between ownership entities within the state inorder to make best use of joint ministerial gover-nance expertise. Over the last two years, thestate’s ownership administration has been strengt-hened, for example, within board recruitment andevaluation. The government will continue to seekto enhance and further professionalise the state’sexercise of ownership in order to ensure the bestpossible management of national assets. Exam-ples of initiatives that have been implemented,and activities currently in progress:– The role of the Ministry of Trade, Industry and

Fisheries as a resource centre for the exerciseof state ownership has been reinforced, as hasinterministerial cooperation on ownership mat-ters through the coordinating role of theOwnership Department. The following specia-lised interministerial fora have been establis-hed, all under the Ownership Department:– An Ownership Forum is hosted six to eight

times a year for all ministerial employeesengaged or otherwise interested in owners-hip administration at ministerial level. The

Ownership Forum addresses a range oftopics concerning ministerial ownershipactivities.

– Professional seminar: an all-day seminarhosted annually. The target audience andtopics are the same as for the OwnershipForum.

– Owner Lunches are meetings of up to twohours hosted every other month for theministries that deal with the state’s directownership. This session is used for dia-logue, discussion and experienceexchange.

– A Competence Forum is hosted once ortwice annually and invites voluntary organi-sations with specialist expertise in CSR toengage in dialogue and discussion withrepresentatives of the ministries responsi-ble for exercising state ownership. Theobject of these meetings is to explore arange of CSR issues in order to extendinsights among the owning ministries ofthe challenges faced by the companies.

– Strengthening the capacity of the ownershipadministration within the Ministry of Trade,Industry and Fisheries has facilitated improvedstrategic and financial supervision of compa-nies with commercial objectives, on the onehand by means of more extensive analytical fol-low-up, and on the other hand by achieving bet-ter understanding of the company’s strategicdevelopment.

– The efforts to nominate and evaluate boardshave been intensified by means of systematicand thorough processes and by increased capa-city within the Ministry of Trade, Industry andFisheries.

The Ministry of Trade, Industry an Fisheries isalso responsible for compiling the annual «StateOwnership Report»; for hosting the annual «StateOwnership Conference», for participation invarious fora such as the Corporate GovernanceCommittee and Working Party on State Owners-hip and Privatisation Practices in OECD and theOwnership Forum, all of which are devoted to set-ting standards in corporate governance and othermatters relating to state ownership.

55 This applies, for example, to interdisciplinary areas such asthe principles of corporate governance, financial manage-ment and reporting, CSR, remuneration schemes for exe-cutives and board members and work concerning boardcomposition.


9 A review of the state’s direct ownership interests

This chapter discusses the state’s direct owner-ship interests. The companies under review arethose with commercial objectives and the largestand most important companies with sectoral-pol-icy objectives. They are grouped in accordancewith the four categories on which the state’s own-ership of enterprises is based. For each company,the following are provided: general company infor-mation, the purpose of the company, a descriptionof its activities and the objective of the state’s own-ership. The figures are for 2013 and in NOK mil-lions. For the listed companies, the market valueof their equity is stated. For the unlisted compa-nies, book equity less any minority interests isgiven. The book value of equity may vary consid-erably from the companies’ actual market values.For supplementary information about the compa-nies’ activities, readers are referred to the annualownership reports which the Ministry of Trade,Industry and Fisheries publishes and submits toparliament.

9.1 Category I – Companies with commercial objectives

9.1.1 Ambita AS

The company’s purpose

The company’s purpose is to operate and developthe EDR data collection system and other associ-ated activities.

The company’s activities

Ambita (formerly Norsk Eiendomsinformasjon) isa fully commercial ICT company operating withinsales, administration, operation and developmentof ICT systems for property data. The companysupplies services, systems and products based onproperty information and cartographical data.Through the company’s EDR publishing systemand the Infoland marketplace, the company sup-plies property and map data that has been pro-cessed from data deriving from the municipalities,housing associations, the Norwegian MappingAuthority, the power companies and so forth. Info-land is an online marketplace linked to systemsfor counting, authorisation and invoicing. The sys-tems allow customers to place direct orders forinformation products from around 240 municipali-ties, housing cooperatives and other data provid-ers. Ambita’s head office is in Oslo.

The government has decided to place the com-pany in category 1 «Companies with commercialobjectives» with effect from 1 January 2014, sinceas of this date it will be in full competition withother distributors, and subject to the same frame-work conditions as they are. As a consequence ofthis, the company’s purpose as set out in its stat-ues must also be amended, since it will no longerbe under obligation to fulfil any social mandates.

The objective of the state’s ownership

The objective of the state’s ownership of AmbitaAS is purely commercial. The company is to berun on a commercial basis and with the aim ofdelivering a competitive return.

The government is of the opinion that thereare no special grounds for the state to be a long-term owner of the business and is therefore recep-tive to considering solutions that entail a reduc-

Table 9.1 Company information and key figures. The figures are for 2013 and in NOK millions.

Corporate form: Limited company

Founded: 1987

State holding: 100 %

Owner: Ministry of Trade,Industry and Fisheries

Number of employees: 59

Book equity: 78

Operating revenues: 324

Operating profit/loss: 60

Profit/loss after tax and minority interests: 42


tion in its holding. On this basis, in the budgetproposal for 2015, the government will ask parlia-ment for a mandate to fully or partially dispose ofits holding in Ambita AS. Any use of the mandatewould depend on commercial assessments relat-ing to, for example, company-specific and market-specific factors.

9.1.2 Baneservice AS


The company’s purpose is to offer services andproducts for developing, building, maintainingand operating railway infrastructure and otherrelated activities, including in other areas wherethe company’s expertise and resources can be uti-lised. Activities may be performed by the com-pany itself, by wholly owned subsidiaries orthrough participation in or cooperation with othercompanies.


Baneservice is a continuation of the former Bane-Service business unit of Jernbaneverket, the Nor-wegian National Rail Administration. The com-pany builds and maintains track, and catenary, sig-nalling and telecommunications installations forrailways, tramways and light rail. The company isone of the leading full-spectrum suppliers of rail-way engineering services in Norway. The com-pany also has a wholly owned subsidiary in Swe-den which supplies marshalling services for ter-minal operations. Baneservice’s head office is inLysaker.


The objective of the state’s ownership of Baneser-vice AS is purely commercial. The company is tobe run on a commercial basis and with the aim ofdelivering a competitive return.

The government is of the opinion that thereare no special grounds for the state to be a long-term owner of the business and is therefore recep-tive to considering solutions that entail a reduc-tion in its holding. On this basis, in the budgetproposal for 2015, the government will ask parlia-ment for a mandate to fully or partially dispose ofits holding in Baneservice AS. Any use of the man-date would depend on commercial assessmentsrelating to, for example, company-specific andmarket-specific factors and would also be viewedin the context of the outcome of the Ministry ofTransport and Communications’ reform of therailways sector.

9.1.3 Cermaq ASA


The purpose of the company is to undertake sus-tainable aquaculture and other activities that natu-rally belong with this. The company will play anactive role in research and development in theaquaculture industry. Activities may be performedby the company itself, by subsidiaries or throughparticipation in or cooperation with other compa-nies.



Founded: 2005


Owner: Ministry of Transportand Communications


Book equity: 101


Operating profit/loss: -29

Profit/loss after tax and minority interests: -23


Corporate form: Public limited company

Founded: 1994

State holding: 59.17 %


Number of employees: 4,361

Value of the company: 9,990

Operating revenues: 5,155

Operating profit/loss: 2,877

Profit/loss after tax and minority interests: 3,886



Cermaq’s vision is to be a global fish-farming com-pany and a leader in the sustainable production ofsalmonid species. The group is one of the largestfarmers of salmon and trout, with production facil-ities in Chile, Canada and Norway. Cermaq islisted on the Oslo Stock Exchange and has itshead office in Oslo.


The objective of the state’s ownership of CermaqASA is purely commercial. The company is to berun on a commercial basis and with the aim ofdelivering a competitive return.

The government is of the opinion that thereare no special grounds for the state to be a long-term owner of the business. On this basis, thegovernment has been granted parliament’s man-date to sell, through payment in cash and/orshares in another company in the same sector, allof the state’s shareholding in Cermaq ASA as partof an industrial solution. In the budget proposalfor 2015, the government will ask for an extendedmandate to allow full or partial disposal of thestate’s shares in Cermaq ASA, in line with equiva-lent powers for the other companies in category 1.Any use of the mandate would depend on com-mercial assessments relating to, for example,company-specific and market-specific factors.

9.1.4 Entra Holding AS


The company’s primary purpose is to cater for thestate’s requirement for premises. The companycan own, buy, sell operate and manage propertyand perform other associated activities. The com-pany can also own shares or holdings in, and par-ticipate in, other companies that perform activitiesas mentioned above. The company is to be run oncommercial principles.


Entra Holding is the parent company of the Entragroup, and owns all the shares in Entra EiendomAS including 25 wholly or partially owned subsid-iaries. The company develops, leases, manages,operates, buys and sells real estate in Norway andis one of the country’s leading property compa-nies. It is run on commercial principles in compe-tition with other, private, commercial propertycompanies. The company’s portfolio covers pri-marily Oslo, Stavanger, Bergen and Trondheim.Entra Holding’s head office is in Oslo.


The objective of the state’s ownership of EntraHolding AS is purely commercial. The company isto be run on a commercial basis and with the aimof delivering a competitive return.

The government is of the opinion that thereare no special grounds for the state to be a long-term owner of the business. On this basis, thegovernment currently has a mandate from parlia-ment to «sell all shares in Entra Holding AS». Aprivatisation process has been initiated. In 2013,the mandate from parliament was extended fromapplying to «down to 33.4 per cent» to applying to«all shares», in order to allow greater scope ofalternatives for providing options for divestment.To the extent required, in the budget proposal for2015, the government will ask for this mandate tobe maintained.



Founded: 2000




Book equity: 7,878





9.1.5 Flytoget AS


The purpose of the company is to operate trainservices to and from Oslo Airport, together withassociated investments and services.


Flytoget operates high-speed trains betweenDrammen and Oslo Airport. The company trans-ports around 6 million passengers annually, whichequates to around 10 per cent of all train passen-gers in Norway and approximately 20 per cent ofall train passengers in the Greater Oslo region.The company’s market share of ground transportaccess services to Oslo Airport in 2013 was 32.8per cent. Flytoget’s head office is in Oslo.


The objective of the state’s ownership of FlytogetAS is purely commercial. The company is to berun on a commercial basis and with the aim ofdelivering a competitive return.

The government is of the opinion that thereare no special grounds for the state to be a long-term owner of the business and is therefore recep-tive to considering solutions that entail a reduc-tion in its holding. On this basis, in the budgetproposal for 2015, the government will ask parlia-ment for a mandate to fully or partially dispose ofits holding in Flytoget AS. Any use of the mandatewould depend on commercial assessments relat-

ing to, for example, company-specific and market-specific factors.

9.1.6 Mesta AS


Mesta AS’s purpose is to offer services and prod-ucts for developing, building, operating and main-taining transport infrastructure and other relatedactivities, including in other areas where the com-pany’s expertise and resources can be utilised.Activities may be performed by the companyitself, by wholly owned subsidiaries or throughparticipation in other companies or cooperationwith others.


Mesta is one of Norway’s largest road operatingand maintenance companies. The company wasformed when the production unit of the Norwe-gian Public Roads Administration was separatedout into a limited company subject to market com-petition. In recent years, the company has under-taken a comprehensive restructuring processwhich has helped provide a lower cost base, bettercompetitiveness and a more targeted businessstrategy. Mesta’s head office is in Lysaker.


The objective of the state’s ownership of Mesta ASis purely commercial. The company is to be runon a commercial basis and with the aim of deliver-ing a competitive return.



Founded: 1992




Book equity: 968






Founded: 2003




Book equity: 897





The government is of the opinion that thereare no special grounds for the state to be a long-term owner of the business. On this basis, thegovernment currently has a mandate from parlia-ment to «sell all shares in Mesta AS». In the bud-get proposal for 2015, the government will ask forthis mandate to be maintained, in line with equiva-lent powers for the other companies in category 1.Any use of the mandate would depend on com-mercial assessments relating to, for example,company-specific and market-specific factors.

9.1.7 SAS AB

1 The figures are in Norwegian kroner, converted from theSAS group figures in Swedish kronor. Due to differences inaccounting years, the figures relate to the period November2012-October 2013.


The purpose of the company is directly or indi-rectly to conduct air traffic operations chieflythrough the Scandinavian Airlines System Den-mark-Norway-Sweden (SAS) Consortium, othertransport and travel-related business as well asany business compatible therewith.


SAS is one of Scandinavia’s leading airlines,whose primary purpose is to offer competitivepassenger services originating in the home mar-ket in Northern Europe. In 2012/2013 the com-pany flew more than 28 million passengers to 120destinations. The company is also part of theglobal airline alliance Star Alliance. SAS is listedon the Oslo, Stockholm and Copenhagen stockexchanges and its head office is in Stockholm.

In connection with the company’s wish to beable to utilise different sources of capital, the gov-ernment currently has a mandate for the Ministryof Trade, Industry and Fisheries to vote in 2014 atthe annual general meeting of SAS AB toempower the board to issue financial instrumentswhich include equity and debt components(hybrid capital), including preference shares andconvertible loans, with the limitation that thestate’s percentage of voting shares in SAS ABdoes not fall below 7.5 per cent.


The objective of the state’s ownership of SAS ABis purely commercial. The company is to be runon a commercial basis and with the aim of deliver-ing a competitive return.

The government is of the opinion that thereare no special grounds for the state to be a long-term owner of the business. On this basis, thegovernment currently has a mandate from parlia-ment to «sell shares in SAS AB in connection withan industrial solution». In the budget proposal for2015, the government will ask for an extendedmandate to allow full or partial disposal of thestate’s shares in SAS AB, in line with equivalentpowers for the other companies in category 1. Anyuse of the mandate would depend on commercialassessments relating to, for example, company-specific and market-specific factors.

Table 9.7 Company information and key figures. The figures are for 2013 and in NOK millions1.


Founded: 1946









9.1.8 Veterinærmedisinsk Oppdragssenter AS


The purpose of the company is to help improvefish and animal health and improve utilisation ofgenetic resources in fish by offering goods, ser-vices and research and test facilities based oninternational high-level competence and quality.The company aspires to promote the conversionof ideas from the veterinary and fish health areainto commercially interesting projects.


Veterinærmedisinsk Oppdragssenter is a knowl-edge-based company with a scientific foundationin Norwegian veterinary medicine and relatedenvironments. The company supplies goods andservices to the Norwegian aquaculture industryand goods to the Norwegian veterinary marketthrough a separate wholesale and pharmacy con-cession. The company also supplies clinical infec-tion trials to the international pharmaceutical,feed and breeding industries working on nationaland international aquaculture through researchfacilities. The company operates in a competitivemarket on a commercial basis. Veterinærmedis-insk Oppdragssenter’s head office is in Oslo.


The objective of the state’s ownership of Veter-inærmedisinsk Oppdragssenter AS is purely com-mercial. The company is to be run on a commer-

cial basis and with the aim of delivering a competi-tive return.

The government is of the opinion that thereare no special grounds for the state to be a long-term owner of the business and is therefore recep-tive to considering solutions that entail a reduc-tion in its holding. On this basis, in the budgetproposal for 2015, the government will ask parlia-ment for a mandate to fully or partially dispose ofits holding in Veterinærmedisinsk Oppdrags-senter AS, in line with equivalent powers for theother companies in category 1. Any use of themandate would depend on commercial assess-ments relating to, for example, company-specificand market-specific factors.

9.2 Category 2 – Companies with commercial objectives and an objective of maintaining head office functions in Norway

9.2.1 Aker Kværner Holding AS


The purpose of the company is to own 110,333,615shares in Aker Solutions ASA and 110,333,615shares in Kværner ASA.


Aker Kværner Holding administers shares inAker Solutions ASA and Kværner ASA. The com-pany owns 40.3 per cent of the shares in AkerSolutions ASA and 41.0 per cent of the shares inKværner ASA and has one employee.



Founded: 1988

State holding: 34 %

Owner: Ministry of Agricultureand Food


Book equity: 76






Founded: 2007

State holding: 30 %




Operating revenues: 0.0

Operating profit/loss: -1.5



The state owns 30 per cent of the shares inAker Kværner Holding AS, while Aker ASA owns70 per cent. The state and Aker ASA have mutu-ally committed themselves to retaining combinedownership of Aker Solutions ASA and KværnerASA for a period of at least 10 years (from 2007).Aker Kværner Holding AS has the same rights inAker Solutions ASA and Kværner ASA as othershareholders. The owners of Aker Kværner Hold-ing AS have signed a shareholder agreementwhich, in practice, ensures negative control forthe state and Aker ASA in respect of a number ofkey issues in Aker Solutions ASA and KværnerASA.

Kværner is a leading, specialist supplier ofengineering, procurement and construction(EPC) services for offshore oil and gas platformsand onshore installations. The company hasaround 2,800 employees. Kværner is listed on theOslo Stock Exchange and has its head office inFornebu.

Aker Solutions supplies products, systems andservices to the oil and gas industry. The com-pany’s technologies and competence contribute toestablishing, increasing and extending productionfrom oil fields worldwide. The company hasaround 26,000 employees in more than 30 coun-tries. Aker Solutions is listed on the Oslo StockExchange and has its head office in Fornebu.

On 30 April 2014, Aker Solutions published aproposal for a demerger of the Aker Solutionsgroup. The state is provisionally inclined to sup-port this proposal, but its final view will be deter-mined when the demerger plan and other finaldocumentation are in place.


The objective of the state’s ownership of AkerKværner Holding AS is to help ensure that indus-trial expertise in petroleum-related activities aredeveloped and that such activities are run fromNorway. The company is to be run on a commer-cial basis and with the aim of delivering a competi-tive return.

The government notes that the state hassigned a shareholder agreement with Aker ASAconcerning the ownership of Aker Kværner Hold-ing AS.

9.2.2 DNB ASA


The purpose of the company is to own or partici-pate in other enterprises that perform banking,insurance or financing activities or connectedactivities within the framework of applicable legis-lation.


DNB is Norway’s largest finance group, and oneof the largest in the Nordic region by marketvalue. The bank has a presence throughout Nor-way and has several international offices. In total,the company has more than 2.1 million retail cus-tomers and more than 220,000 business custom-ers. The online bank has around 1.7 million users.

Through DNB Eiendom and DNB Næringsei-endom, the group is Norway’s largest estateagency. It is also one of the world’s leading ship-ping and offshore banks, the world’s leading sea-food industry bank and a foremost bank in theenergy sector. The group’s portfolio of major busi-ness customers includes large Norwegian andinternational companies and finance institutions,local and county authorities and public-sectorenterprises in Norway.

DNB Markets is Norway’s largest securitiescompany and serves customers from its headoffice in Oslo, a number of regional brokers andinternational branches. DNB Asset Managementis the country’s largest asset manager with morethan 500,000 investment fund customers andsome 400 institutional customers in Norway and



Founded: 1999

State holding: 34 %








Sweden. DNB Livsforsikring has more than 1 mil-lion life and pension insurance customers, andDNB Skadeforsikring has around 210,000 per-sonal accident insurance customers in Norway.DNB is listed on the Oslo Stock Exchange andhas its head office in Oslo.


The objective of the state’s ownership of DNBASA is to maintain a large and skilled financegroup with head office functions in Norway. Thecompany is to be run on a commercial basis andwith the aim of delivering a competitive return.

The government notes that a state holding thatprovides negative control contributes to this. Thegovernment will therefore retain the state’s hold-ing in DNB ASA, and does not see it as appropri-ate to reduce it to below 34 per cent.

9.2.3 Kongsberg Gruppen ASA


The purpose of Kongsberg Gruppen ASA is toengage in technological and industrial activities inthe maritime, defence and related sectors. The

company may participate in and own other compa-nies.


Kongsberg Gruppen is an international groupwhich supplies high technology systems and solu-tions in offshore, petroleum industry, merchantshipping, defence and space.

The group has four business areas. KongsbergMaritime supplies systems for positioning, moni-toring, navigation and automation for merchantshipping and the offshore industry. KongsbergOil & Gas Technologies supplies technologicalsubsea products and solutions, and informationsystems for drilling operations, production andthe subsea environment. Kongsberg Defence Sys-tems is Norway’s leading supplier of defence andspace-related systems, with products and systemsfor command and control, weapons control andmonitoring, communications solutions and mis-siles. Kongsberg Protech Systems is a world-lead-ing supplier of remote-controlled weapons controlsystems. Their main product is the ProtectorRemote Weapon Station. Kongsberg Gruppen islisted on the Oslo Stock Exchange and has itshead office in Kongsberg.


The objective of the state’s ownership of Kongs-berg Gruppen ASA is to maintain a knowledge-based and high-technology industrial group withhead office functions in Norway. The company isto be run on a commercial basis and with the aimof delivering a competitive return.

The government notes that a state holding thatprovides negative control contributes to this. Onthis basis, in the budget proposal for 2015, thegovernment will ask parliament for a mandate topossibly reduce the state’s holding in KongsbergGruppen ASA down to 34 per cent. Any use of themandate would depend on commercial assess-ments relating to, for example, company-specificand market-specific factors. The government doesnot consider it appropriate to reduce state owner-ship to below 34 per cent.



Founded: 1987









9.2.4 Nammo AS


The purpose of the company is to develop, pro-duce and market ammunition products and tocooperate with other companies and enterpriseswith similar objectives. The company is run oncommercial principles.


Nammo’s core activity is ammunition and rocketmotors for military and civil purposes, and theenvironmentally friendly recycling and destruc-tion of old and outdated ammunition, includingcluster munitions. Markets beyond the Nordichome market comprise an increasingly largeshare of the business. In 2013, 77 per cent of oper-ating revenues derived from non-Nordic coun-tries. The largest shares of the company’s exportmarket are made up of the USA and Canada, 39per cent combined, and other European countries,22 per cent of turnover. Nammo’s head office is atRaufoss.


The objective of the state’s ownership of NammoASA is to maintain a knowledge-based and high-tech group with head office functions in Norway.The company is to be run on a commercial basisand with the aim of delivering a competitivereturn.

The government notes that the state hassigned a shareholder agreement with Patria Hold-ing Oyj of Finland concerning the ownership ofNammo AS. Any changes to the state’s sharehold-ing with a view to developing Nammo AS’s busi-ness must be assessed in relation to the provi-sions in this agreement.

9.2.5 Norsk Hydro ASA


The purpose of the company is industry, trade andtransport, and the utilisation of energy and rawmaterials, and to undertake other associated activ-ities. These activities may be performed throughparticipation in or cooperation with other enter-prises.


Norsk Hydro is a global supplier of aluminium,active along the entire value chain, from raw mate-rials extraction to finished product. The companyhas activities around the world, linked to, forexample, the production of primary metal and themanufacture of finished products. It has factoriesin Norway at Karmøy, Høyanger, Årdal, Sunn-dalsøra and Holmestrand. The company also has asubstantial energy business, and is Norway’s sec-ond largest generator of electrical power. It isactive in more than 50 countries on all continents.Norsk Hydro is listed on the Oslo Stock Exchangeand has its head office in Oslo.



Founded: 1998

State holding: 50 %



Book equity: 1,835






Founded: 1905










The objective of the state’s ownership of NorskHydro ASA is to maintain a knowledge-based andhigh-technology industrial group with head officefunctions in Norway. The company is to be run ona commercial basis and with the aim of deliveringa competitive return.

The government notes that a state holding thatprovides negative control contributes to this. Thestate’s holding is currently close to the minimumlevel that secures negative control. The govern-ment will therefore retain the state’s holding inNorsk Hydro ASA, and does not see it as appropri-ate to reduce it to below 34 per cent. The govern-ment does not intend to extend the existing parlia-mentary mandate to increase the state’s holdingin Norsk Hydro ASA up to 39.9 per cent.

9.2.6 Statoil ASA


The purpose of Statoil ASA is oil and gas explora-tion and production, transportation, refining andmarketing of petroleum and its derivatives andother energy forms, as well as other activities.These activities may also be performed throughparticipation in or cooperation with other enter-prises.


Statoil is an international energy company witharound 23,400 employees and activities in 33 coun-

tries. The company’s primary activity is produc-tion of oil and gas, and Statoil is the operator foraround 69 per cent of oil and gas production onthe Norwegian Continental Shelf. In 2013, 37 percent of the company’s equity production camefrom international activities. The company isamong the world’s largest net sellers of crude oiland condensate, and a major seller of natural gasin the European market. The company also hasconsiderable downstream activities and renew-able energy, such as offshore wind power.Through a special instruction, adopted at Statoil’sAnnual General Meeting of 25 May 2001, the com-pany has been given responsibility for selling thestate’s petroleum alongside its own. Statoil islisted on the Oslo and New York Stock Exchangesand has its head office in Stavanger.


The objective of the state’s ownership of StatoilASA is to maintain a knowledge-based and high-technology industrial group with head office func-tions in Norway. The company is to be run on acommercial basis and with the aim of delivering acompetitive return.

On the basis of guidelines specified in a saleand marketing instruction, Statoil is responsiblefor managing, transporting and selling the Norwe-gian state’s oil and gas in conjunction with Statoil’sown reserves This arrangement presupposes thatthe state is the majority owner of Statoil.

9.2.7 Telenor ASA



Founded: 1972

State holding: 67 %

Owner: Ministry of Petroleumand Energy








Founded: 1994










The purpose of the company is to engage in tele-communications and other related activities.These may be conducted by the company itself,by subsidiaries or through participation in othercompanies or cooperation with others.


Telenor is one of the world’s largest suppliers oftelecommunications services. Its primary activityis in mobile telephony and data services, and thecompany has more than 160 million mobile sub-scribers. The group has mobile activities in 13countries, divided into three regions: the Nordics,Central and Eastern Europe and Asia. Through itsholdings in VimpelCom Ltd, the group has mobileactivities in a further 17 countries. Telenor is aleading provider of mobile and fixed telephony inNorway, Sweden and Denmark, and has a sub-stantial position in the Scandinavian broadbandmarket. Through Telenor Broadcast, the group isa major supplier of TV and satellite broadcastingservices in the Nordic region. In Central and East-ern Europe, the group occupies a strong positionas mobile service provider in Hungary, Serbia,Montenegro and Bulgaria. The group is one of thelargest mobile operators in Asia, with consider-able activities in the growth markets of Thailand,Malaysia, Bangladesh, Pakistan and India. Thegroup is also in the process of establishing itself inMyanmar. Telenor is listed on the Oslo StockExchange and has its head office in Fornebu.


The objective of the state’s ownership of TelenorASA is to maintain a knowledge-based and high-technology group with head office functions inNorway. The company is to be run on a commer-cial basis and with the aim of delivering a competi-tive return.

The government notes that a state holding thatprovides negative control contributes to this. Onthis basis, in the budget proposal for 2015, thegovernment will ask parliament for a mandate topossibly reduce the state’s holding in Telenor ASAdown to 34 per cent. Any use of the mandatewould depend on commercial assessments relat-ing to, for example, company-specific and market-specific factors. The government does not con-sider it appropriate to reduce state ownership tobelow 34 per cent.

9.2.8 Yara International ASA


The purpose of the company is to perform indus-trial, commercial and transport activities, andother related business. These activities may alsobe performed through participation in or coopera-tion with other enterprises.


Yara International is a Norway-based, internation-ally oriented chemicals business with core activi-ties in the production, sale and distribution ofnitrogen-based chemicals for various uses. Theproducts’ most important application is mineralfertiliser for agricultural uses, but they also haveapplications in industrial companies, and in envi-ronmental technology for emissions reductions.This wide range of applications helps stabiliseearnings in volatile global markets. Yara Interna-tional is listed on the Oslo Stock Exchange andhas its head office in Oslo.


The objective of the state’s ownership of YaraInternational ASA is to maintain a knowledge-based and high-technology industrial group withhead office functions in Norway. The company isto be run on a commercial basis and with the aimof delivering a competitive return.

The government notes that a state holding thatprovides negative control contributes to this. Thestate’s holding is currently close to the minimum



Founded: 2004









level that secures negative control. The govern-ment will therefore retain the state’s holding inYara International ASA, and does not see it asappropriate to reduce it to below 34 per cent.

9.3 Category 3 – Companies with commercial objectives and other specifically defined objectives

9.3.1 Aerospace Industrial Maintenance Norway SF


The purpose of the company is to maintain andupgrade equipment, primarily in the domain ofmilitary aviation and other associated activities.The enterprise and its personnel shall assist theNorwegian armed forces in their military opera-tions at home and abroad.


Aerospace Industrial Maintenance Norway wasestablished on 15 December 2011 through theconversion of the Air Force Depot Kjeller into astate enterprise. The company supplies mainte-nance and modification services for aircraft, heli-copters, components and ground equipment tothe Norwegian armed forces and other custom-ers. The company comprises 22 different special-ist service centres organised into aircraft mainte-nance, engine maintenance, electronics mainte-nance, mechanical processes and engineering ser-vices. Aerospace Industrial Maintenance Nor-way’s head office is at Kjeller.


The objective of the state’s ownership of Aero-space Industrial Maintenance Norway SF is toensure that the state enterprise can undertakecontractual tasks of strategic significance for theNorwegian armed forces in a cost-efficient man-ner. The company is to be run on a commercialbasis and with the aim of delivering a competitivereturn.

9.3.2 Argentum Fondsinvesteringer AS


The company shall invest its assets in privateequity funds and investment companies. Throughits activities, the company shall contribute to– better access to venture capital and equity for

innovative, research-based business and indus-try

– strengthening competent, long-term owners-hip in business

– improving competitiveness and future valuecreation in Norwegian business and industry

– triggering new opportunities in sectors andindustrial clusters where Norway is alreadypowerful

– developing productive networks betweenowners, managers, R&D environments andenterprises

The company’s activities are to be undertaken oncommercial terms.


Corporate form: State enterprise

Founded: 2011


Owner: Ministry of Defence


Book equity: 343






Founded: 2001




Book equity: 7,279






Argentum Fondsinvesteringer was established toadminister the state’s investments in active equityfunds (private equity) with the objective of com-petitive returns and a more dynamic capital mar-ket for unlisted companies. The company hasgrown into a specialised capital management busi-ness directed towards active equity funds in Nor-way and Northern Europe, and the energy sectorinternationally. The investment model is based onthe fund-in-fund principle, whereby the companycommits capital to private equity funds which pri-marily raise capital in the international capitalmarkets. The company’s core competence is theevaluation and selection of active equity funds andadministrators. At 31 December 2013, the com-pany had investments in 76 funds, which in turnown 461 unlisted companies. The company alsocooperates with other investors and has estab-lished four investment programmes: Nordic Pri-vate Equity Programme, Argentum InvestmentPartner, Argentum Secondary, Nordic AdditionalFunding. The company is the largest investor inNorwegian venture capital funds. Argentum Fond-sinvesteringer’s head office is in Bergen.


The objective of the state’s ownership of Argen-tum Fondsinvesteringer AS is to achieve a goodreturn on investments in private equity funds, con-tribute to a more dynamic capital market forunlisted companies and co-invest in such fundswith private investors, and, as an investor, to pro-mote the development of the private equity sector.The company is to be run on a commercial basisand with the aim of delivering a competitivereturn.

The state’s ownership objective is provided forby the state being an owner of the company, andnot through special guidelines from the ownerson the company’s operations.

9.3.3 Eksportfinans ASA


The company’s purpose is to operate a financingbusiness. This includes the financing of exportingindustries, and for local and county authority pur-poses.


Eksportfinans manages a portfolio of loans to Nor-wegian exporters and foreign buyers of Norwe-gian capital goods. The loans are guaranteed byThe Norwegian Export Credit GuaranteeAgency’s (GIEK) and/or banks. The companyalso manages a substantial portfolio of interna-tional securities. Activities are financed throughbonds issued on the international capital markets.In November 2011, it became clear that a new gov-ernment agency would take over the scheme forstate-funded export credits. Exportfinans’s headoffice is in Oslo.


The objective of the state’s ownership of Eksport-finans ASA is to contribute, as a shareholder, tothe company managing to best effect its existingportfolio of assets, liabilities and obligations inaccordance with applicable contracts.



Founded: 1962

State holding: 15 %



Book equity: 12,075

Operating revenues: -6,680

Operating profit/loss: -6,844

Profit/loss after tax and minority interests: -4,850


9.3.4 Electronic Chart Centre AS


The purpose of the company is to develop andoperate an official electronic nautical chart ser-vice for maritime businesses, and undertake asso-ciated activities, including cooperating with, par-ticipating in or setting up other naturally relatedenterprises.


Electronic Chart Centre’s mission is to developand operate an authorised electronic nauticalchart service for the international maritime indus-try. The work is performed in accordance withinternational standards and through establishedinternational cooperation. The company wasfounded in 1999 as the Norwegian operator in ajoint European regional centre (PRIMAR), withresponsibility for administering, quality-assuringand publishing authorised electronic navigationcharts. The company’s activity is conducted underagreement with the Hydrographic Service of theNorwegian Mapping Authority, and currentlycomprises the administration of official nauticalnavigational chart data from 17 hydrographicoffices through the PRIMAR cooperation (PRI-MAR is a regional coordination centre for officialelectronic navigational charts). The company alsohas electronic nautical charts from 35 other coun-tries in its database, and work is ongoing toextend global chart coverage. The internationalcooperation is organised and headed by theHydrographic Service, while Electronic Chart

Centre AS is responsible for day-to-day operationsof the countries’ common electronic nautical chartservice. Electronic Chart Centre’s head office isin Stavanger.


The objective of the state’s ownership of Elec-tronic Chart Centre AS is to allow Norway to fulfilits obligations under international conventionsconcerning safety at sea, as well as meeting thepublic need for increased maritime safety by man-aging and publishing authorised electronic nauti-cal charts owned by the hydrographic offices.Electronic Chart Centre AS aims to support Nor-way’s position as a maritime nation by promotingincreased safety at sea both domestically andinternationally. The company is to be run on acommercial basis and with the aim of delivering acompetitive return.


9.3.5 Investinor AS


The company’s purpose is to contribute to valuecreation by offering venture capital to internation-ally oriented competitive companies, primarilystart-ups. In addition to risk capital, the companyaims to provide competent, active ownership ofthe portfolio companies. The company’s catch-ment area is to be the whole of Norway.



Founded: 1999




Book equity: 15


Operating profit/loss: 1.4

Profit/loss after tax and minority interests: 1.6



Founded: 2008




Book equity: 2,052



Profit/loss after tax and minority interests: -4.4


Investments shall be made on a commercialbasis, and on the same terms as private investors.The company may make investments in the formof shares or subordinated loans.

The company shall prioritise investments insectors with business environments that offerpotential international competitive advantages,that safeguard the utilisation of important naturalresources, that make use of new technologies andskills and/or that help reduce environmentalimpacts and anthropogenic climate change. Of theoriginal subscribed equity, NOK 500 million shallbe reserved for investment in marine businessand industry. The company also has NOK 500 mil-lion at its disposal, reserved for investments in theforestry and wood-processing industries.

The investment focus is to be early stageenterprises, with a flexibility in the direction ofexpansion phase enterprises where consistentwith the company’s purpose. The company mayalso make follow-up investments in later phases.The investments are to be made with a long-termperspective. The company must have a disposalstrategy for companies in the portfolio.

The company’s share capital in individual port-folio companies should not exceed 49 per cent.Where a portfolio company undergoes a capitalincrease, Investinor’s share of this increase will,as a rule, again not exceed 49 per cent, but with anoption in exceptional cases to rise to 70 per cent,provided that the risk in the overall portfolio doesnot change significantly.

The company is not able to take out loans.


Investinor is an investment company that aims tocreate value by investing risk capital and exercis-ing active, informed ownership in internationallyoriented, competitive Norwegian companies inthe early or expansion stages. The portfolio is con-centrated on strong Norwegian sectors that havethe preconditions necessary for international suc-cess. The company makes its investments on acommercial basis, in conjunction with private co-investors, seeking to generate a good long-termreturn, with appropriate risk diversification.Investinor’s head office is in Trondheim.


The objective of the state’s ownership ofInvestinor AS is to boost value creation in Norwe-gian business and industry through investmentsin start-up companies, early stage companies and,

to a lesser extent, those in the expansion stage.State ownership is also intended to help developexperience and expertise in owning and develop-ing companies in the early stage of growth.Investinor shall invest on equivalent terms to pri-vate investors. The company is to be run on acommercial basis and with the aim of delivering acompetitive return.

As an owner, the state has defined in the com-pany’s statutes particular policies for its activities.

The state considers it appropriate to under-take an evaluation of Investinor AS after five yearsof operation.

9.3.6 Kommunalbanken AS


The purpose of the company is to provide loans tomunicipal and county authorities, IKS (intermu-nicipal companies) and other companies thatundertake local authority business, against a localor central government guarantee or other suitablesecurity. The company may take on other tasksthat may naturally form part of the company’sactivities.


Kommunalbanken provides loans for investmentpurposes in the municipal sector. It has a marketshare of just under 50 per cent. All of the country’scounty authorities, 98 per cent of the municipali-ties and a number of municipal and intermunicipalcompanies have loans from the bank. At year-end2013, the bank’s loans to the municipal sector



Founded: 1999


Owner: Ministry of Local Govern-ment and Modernisation


Book equity: 8,216





came to NOK 240 billion. The bank has a keyfunction as a stable credit provider to the munici-pal sector under the best possible lending terms.Kommunalbanken’s head office is in Oslo.


The objective of the state’s ownership of Kommu-nalbanken AS is to facilitate the financing of themunicipal sector. The company is to be run on acommercial basis and with the aim of delivering acompetitive return.

9.3.7 NSB AS


The company’s social mission is to provide effi-cient, accessible, safe and eco-friendly transport ofpassengers and goods. The company operatespassenger train transport in Norway, transport ofpassengers and freight in Norway and the otherNordic countries, and other operations that arenaturally related to these. The activities may beperformed by the company itself, by wholly

owned subsidiaries or through other companies ithas holdings in or cooperates with. The companymay operate in other Nordic countries to theextent that this strengthens the company’s com-petitiveness on the Norwegian market and/orincreases its ability to fulfil the social mission onwhich the state’s ownership is based.


NSB operates passenger transport by train andbus, freight transport by train, property businessand support functions. The largest share of pas-senger transport by train relates to public pro-curement; other activities are run on a commer-cial basis. The group’s activities extend to much ofNorway and parts of Denmark and Sweden. Thecompany was formerly a public sector enterprise.In 1996, this was split into the NSB BA special lawcompany and Jernbaneverket, the NorwegianNational Rail Administration, and in 2002 the spe-cial law company was converted into a limitedcompany owned by the state. NSB’s head office isin Oslo.


The objective of the state’s ownership of NSB ASis to help secure efficient, accessible, safe andeco-friendly passenger and goods transport by railin Norway. This is the company’s social mission.The company is to be run on a commercial basisand with the aim of delivering a competitivereturn.

The Ministry of Transport and Communica-tions’ ownership report on the company’s activi-ties was last submitted to parliament in the springof 2013; see Report no. 31 (2012–2013) to theStorting: Activities of NSB AS. Since the change ofgovernment, the Ministry of Transport and Com-munications has been working to reform the rail-ways sector. The outcome of this work may affectthe company.



Founded: 2002




Book equity: 7,676





9.3.8 Posten Norge AS


Posten Norge AS is a wholly owned state limitedcompany. The company shall fulfil the require-ments of the Postal Services Act. The company’ssocial mission is to ensure provision of a nation-wide postal service at a reasonable price and ofgood quality. This mission is described in the com-pany’s licence. The company shall operate a postaland logistics business on a competitive basis. Thecompany may also engage in together with othernaturally related activities. The activities may beperformed by the company itself, by whollyowned subsidiaries or through other companieswhich Posten Norge AS has shares in or cooper-ates with. The company shall perform tasks asdetermined through legislation or its licence, orthrough decisions by its annual general meeting.


Posten Norge is a Nordic postal and logisticsgroup which develops and supplies integratedsolutions in postal, communications and logisticsservices. The markets for the group’s services aregrowing strongly, driven by globalisation andtechnological changes, which are altering con-sumer behaviour and leading to increased compe-tition. Due to a fall in the volume of letters, thecompany has undertaken significant reorganisa-tion of its postal business. At the same time, it hasgrown strongly in the logistics segment, primarilythrough acquisitions. The company’s strategy isto develop a Nordic, integrated and industrialised

group. The company was formerly a public sectorenterprise. In 1996, the public sector enterprisewas converted into a special law company (PostenBA), and in 2002 it was converted into a limitedliability company owned by the state. PostenNorge’s head office is in Oslo.


The objective of the state’s ownership of PostenNorge AS is to ensure nationwide provision of auniversal service at a reasonable price and ofgood quality. This is the company’s social mission.The company is to be run on a commercial basisand with the aim of delivering a competitivereturn.

The Ministry of Transport and Communica-tions’ ownership report on the company’s activi-ties was last submitted to parliament in the springof 2012; see Report no. 18 (2011–2012) to theStorting: Activities of Posten Norge AS. The gov-ernment is working on a new postal law, in whichit will be proposed to implement the EU’s thirdpostal services directive. Such a change wouldhave certain consequences for Posten Norge AS’slicence.

9.3.9 Statkraft SF


Statkraft SF’s purpose is to own all the shares inStatkraft AS, to provide loans to Statkraft AS, toown power stations that are leased out and sharesin companies that operate power stations abroad,as well as to trade in energy and undertake activi-



Founded: 2002




Book equity: 6,050






Founded: 1992




Book equity: 62,849





ties naturally associated with the above. StatkraftAS’s purpose is, singly or through participation inor cooperation with other companies, to plan,engineer, build and operate power plants, toundertake physical and financial energy trading,and perform other naturally associated activities.


Statkraft is Norway’s largest power producer, witharound one third of total domestic production, andis Europe’s largest producer of renewable energy.The group produces and develops hydro-electricpower, wind power, gas power and district heat-ing, and is a major player on the European energyexchanges with expertise in physical and financialenergy trading. In Norway, the group is the larg-est supplier of energy to Norwegian industry. Out-side of Europe, Statkraft SF is engaged in powergeneration and the development of new produc-tion both on its own account and through owner-ship of SN Power in partnership with Norfund.Industrial expertise and understanding of themarket gained in the home markets in Norwayand the Nordic region have enabled the companyto grow internationally, for example throughhydro-power projects in emerging markets andwind power projects off the UK coast. The com-pany has holdings in 391 power plants and districtheating plants in Europe, Asia and South Americawith total combined output of more than 17,000MW. Of the total installed output, 80 per cent is inNorway and the Nordic region, 19 per cent inNorth-western Europe and 3 per cent in South-eastern Europe and outside of Europe. Thegroup’s total annual power production is in theregion of 60 TWh, of which some 90 per centderives from renewable energy sources. Stat-kraft’s head office is in Oslo.


The objective of the state’s ownership of StatkraftSF is to contribute to profitable and responsiblemanagement of Norwegian natural resources.State ownership is also intended to help ensurethat head office functions remain in Norway andto help develop Norwegian expertise in renew-able energy, which can also be used to undertakeprofitable power projects internationally. The com-pany is to be run on a commercial basis and withthe aim of delivering a competitive return.

9.3.10 Store Norske Spitsbergen Kulkompani AS


The purpose of Store Norske Spitsbergen Kul-kompani Aktieselskap is to operate or otherwiseexploit the company’s assets and rights on Sval-bard. The company can also participate in andoperate other associated businesses. The com-pany may use its expertise in environmentallyfriendly resource utilisation on Svalbard and inFinnmark and Troms counties.


The primary activity of Store Norske SpitsbergenKulkompani is coal mining on Svalbard. The com-pany currently has coal mining operations inthree mines, reducing to two from 2015. The com-pany is actively prospecting and performing proj-ect development to secure a future operatingbasis, including new activities, on Svalbard. Themain mine is Svea Nord. This is in the last stage ofproduction in the core area, which will be workedout in 2015. Svea Nord will be replaced by the newmine at Lunckefjell, north-east of the current mainmine. Lunckefjell is under development and willbe in full production during 2015. The company’scoal mining operation is run on a commercialbasis and is subject to very strict environmentallegislation. The company’s provisional plans forcoal mining operations stretch more than 15 yearsahead, and the company has a resource base thatprovides a basis for coal mining on Svalbard for



Founded: 1916




Book equity: 1,492





even longer. Store Norske Spitsbergen Kulkom-pani’s head office is in Longyearbyen.


The objective of the state’s ownership of StoreNorske Spitsbergen Kulkompani AS is to helpmaintain and develop the Longyearbyen commu-nity in a way that underpins the general objectivesof Norway’s Svalbard policy. The company is to berun on a commercial basis and with the aim ofdelivering a competitive return.


9.4 Category 4 – Companies with sectoral-policy objectives

9.4.1 Andøya Space Center AS


Andøya Space Center AS’s purpose is to supplyservices and products for space and atmosphericresearch, environmental monitoring and technol-ogy testing and verification, as well as contribut-

ing to knowledge development and interest inthese areas.


Andøya Space Center (formerly AndøyaRakettskytefelt) was founded in 1997 through sep-aration from the Norwegian Space Centre. Thebackground to the company is the activities initi-ated in 1962 in Andøya, under the auspices of theNorwegian Defence Research Establishment andone of the precursors of the Research Council ofNorway, originally to meet military and civil radiocommunication requirements. In addition to theparent company, the Andøya Space Center ASconsists of the Andøya Test Center AS andNAROM (Norwegian Centre for Space-relatedEducation) subsidiaries. The company is ownedby the Ministry of Trade, Industry and Fisheries(90 per cent) and Kongsberg Defence Systems AS(10 per cent). The company supplies services tonational and international research institutions(launch of sounding rockets and release ofresearch balloons) and to technology develop-ment enterprises (testing of rocket motors). Thecompany is seeing increasing activity relating tothe development, testing and use of unmannedaerial systems, and undertakes student-orientedwork through the NAROM subsidiary. Around 45per cent of the company’s total revenues comefrom contributions it receives from Norwegianand foreign agencies through the Esrange AndøyaSpecial Project (EASP) multilateral agreementbetween Sweden, Norway, Germany, France andSwitzerland. In addition to the grants from theEASP agreement, the company has its own reve-nues from the sale of services, notably to the Nor-wegian armed forces. Andøya Space Center’shead office is at Andøya.


The objective of the state’s ownership of AndøyaSpace Center AS is to strengthen Norwegianresearch and high-technology business activitiesthrough the operation and development of infra-structure for technology testing and scientificresearch. It is a requirement for the company tobe run efficiently.



Founded: 1997

State holding: 90 %



Book equity: 62





9.4.2 Avinor AS


The company’s social mission is to own, operateand develop a nationwide network of airports forthe civilian sector and a joint air navigation servicefor the civilian and military sectors. The ownerdetermines which airports the company shalloperate. The company is to be run in a safe, effec-tive and environmentally friendly manner, and toensure good accessibility for all travelling groups.To the greatest extent possible, the companyshould be self-financing from revenues from itsmain activities and other airport-related businessactivities. Within the company, there must be co-financing between the commercially profitableand unprofitable units. The activities may be per-formed by the company itself, by wholly ownedsubsidiaries or by other companies it has holdingsin or cooperates with. The company shall performsocially mandated tasks as laid down by theowner.


Avinor was established in 2003 through conver-sion into a public corporation of the Luftfartsver-

ket administrative agency. The company adminis-ters the national aviation infrastructure which is aprerequisite for a nationwide air transport net-work in Norway. The company has two primaryareas of activity: operation of a nationwide net-work of airports for civil aviation and operation ofair navigation services for civil and military avia-tion. This comprises 46 airports (12 of them co-operated with the armed forces in Norway) andcontrol towers, control centres and other techni-cal infrastructure for air navigation. In addition,the company undertakes commercial activitiesassociated with the airports through airporthotels, parking facilities, duty free sales and leas-ing of premises for refreshments and other ser-vices. Activities are operated such that profitableairports help finance unprofitable ones. The airnavigation services are to be self-financing bybeing priced at cost. Around half of the group’srevenues come from fees that the airlines pay forservices Avinor provides. The remainder of therevenues are commercial revenues from airport-related business activity. Avinor’s head office is inOslo.


The objective of the state’s ownership of AvinorAS is to operate and develop a nationwide networkof airports for the civilian sector and joint air navi-gation services for the civilian and military sec-tors. This is the company’s social mission.Together with other government instruments,state ownership of Avinor AS contributes to anappropriate nationwide air service. Within thissectoral-policy framework, the company also hasan obligation to ensure sound administration ofthe state’s assets. It is a requirement for the com-pany to be run efficiently.

The Ministry of Transport and Communica-tions’ ownership report on Avinor’s activities waslast submitted to parliament in the spring of 2013;see Report no. 38 (2012–2013) to the Storting:Activities of Avinor AS.



Founded: 2003




Book equity: 11,969





9.4.3 Bjørnøen AS


The purpose of Bjørnøen AS is the operation andutilisation of the company’s properties on Sval-bard and other associated activities.


Bjørnøen owns all the ground and some culturalheritage buildings on Bjørnøya. Administratively,the company is controlled by Kings Bay whichalso supplies management services to Bjørnøen.Some of the state subsidy to Kings Bay is trans-ferred for the operation of Bjørnøen. Bjørnøen’shead office is in Ny-Ålesund.


The objective of the state’s ownership of BjørnøenAS is to administer properties on Bjørnøya andthereby also support Norwegian sovereignty con-siderations. It is a requirement for the company tobe run efficiently.

9.4.4 Eksportkreditt Norge AS


The purpose of the company is to manage a statescheme for financial services in connection withNorwegian exports of capital goods and services.In order to promote the purpose, the companymay in its own name 1) provide state-financedexport credits in accordance with internationalagreements, and 2) provide loans on market-based terms as an alternative to loans as referredto in 1). Where special considerations dictate, theloans can be issued in the state’s name.


Eksportkreditt Norge administers the statescheme for financial services for Norwegianexports of capital goods and services (the exportcredit scheme). The scheme is intended to helpNorwegian exporters to compete on similar termsto other exporters with access to national exportcredit schemes. This means that the companymay offer, on behalf of the state, CommercialInterest Reference Rate (CIRR) loans in compli-ance with an OECD-related agreement on exportfinancing. In addition, the company can offerloans on market terms to borrowers who qualifyfor CIRR loans. In order for the company to offerfinancing, the Norwegian Export Credit Guaran-tee Agency (GIEK) and/or one or more well-ratedfinancial institutions must provide guarantees.The company caters for the entire procedure asso-ciated with the promotion, sales, applications pro-cessing, disbursements and follow-up of loans



Founded: 1918




Book equity: 4.1






Founded: 2012




Book equity: 39





under the export credit scheme. The loans underthe export credit scheme appear on the nationalbalance sheet, and the state is liable for all risksassociated with the lending activity. The com-pany’s operation is financed exclusively throughstate subsidy, and all the revenues from the lend-ing activity devolve to the state. EksportkredittNorge’s head office is in Oslo.


The objective of the state’s ownership of Eksport-kreditt Norge AS is to promote Norwegianexports through competitive, accessible and effec-tive export financing. It is a requirement for thecompany to be run efficiently.

9.4.5 Enova SF


The purpose of the company is to promote envi-ronmentally friendly transition in energy con-sumption and generation, as well as developmentof energy and climate technology. Enova’s activi-ties shall contribute to develop environmentallyfriendly energy solutions, reduce greenhouse gasemissions and strengthen security of energy sup-ply.


Enova manages the Energy Fund. The EnergyFund has been established to ensure a long-termfinancing source for Enova’s activities. The com-pany is obliged to administer the Energy Fund

assets in a cost-efficient and targeted manner. TheEnergy Fund derives revenues from a levy on theelectricity grid tariff, returns from the fund for cli-mate, renewable energy and energy conversion,and from interest earned on the capital balance ofthe fund from preceding years. Enova’s headoffice is in Trondheim.


The objective of the state’s ownership of Enova SFis to achieve energy policy goals. It is a require-ment for the company to be run efficiently.

9.4.6 Gassco AS


Gassco’s purpose is to operate transport systemsfor natural gas on and from the Norwegian Conti-nental Shelf, including pipelines and terminals,either itself or through participation in or coopera-tion with other companies, along with associatedactivities.


Gassco is the operator of the integrated transportsystem for gas from the Norwegian ContinentalShelf to Europe. The integrated transport systemconsists of pipelines, processing facilities, plat-forms and gas terminals on the European main-land and in the UK. The company’s operationalduties comprise technical operation and adminis-tration of installations and facilities on behalf ofthe Gassled joint venture, which owns the gas



Founded: 2001




Book equity: 10






Founded: 2001




Book equity: 16





transport system. The company’s operationalduties also encompass the planning of new gasinfrastructure, the allocation of transport capacityto the gas shippers, and the coordination and con-trol of gas flows through the pipeline network tothe markets. The company advises the Ministry ofPetroleum and Energy on the development of theregulatory framework, the setting of tariffs andthe processing of plans for facilities and operation.Gassco’s head office is at Karmøy.


The objective of the state’s ownership of GasscoAS is to assume the operator responsibility for thetransport of gas from the Norwegian ContinentalShelf. The transport and processing facilities mustserve all gas producers and contribute to an effi-cient overall exploitation of the resources on theContinental Shelf. As the entity responsible for theoperation of the transport systems, Gassco ASmust act impartially towards all the systems’users. It is a requirement for the company to berun efficiently.

9.4.7 Gassnova SF


The purpose of Gassnova SF is to manage theNorwegian state’s interests regarding CarbonCapture and Storage (CCS) and to implement theprojects determined by the enterprise meeting.The objective of the enterprise’s activities is toyield results in the form of cost reductions forCCS. Gassnova SF shall advise the Ministry of

Petroleum and Energy regarding CCS. GassnovaSF shall facilitate the Norwegian state’s participa-tion in CCS projects to provide maximum benefitfor the state or state-owned entities. Gassnova SFshall also manage the support scheme for devel-opment of CCS technologies, the CLIMIT pro-gramme, in cooperation with the Research Coun-cil of Norway. Gassnova SF does not have a com-mercial purpose.


Gassnova contributes to technology developmentthrough the CLIMIT programme, administrationof the state’s interest in the CO2 Technology Cen-tre Mongstad DA, and project implementation.The company shall also provide the Ministry ofPetroleum and Energy with expert advice on CCSissues. Gassnova’s head office is in Porsgrunn.


The objective of the state’s ownership of GassnovaSF is to manage the state’s interests regardingCCS. It is a requirement for the company to berun efficiently.

9.4.8 Innovation Norway


Innovation Norway’s purpose is to act as anational and local authority instrument for realis-ing value-generating business developmentthroughout Norway.



Founded: 2007




Book equity: 24





Corporate form: Special law company

Founded: 2003

State holding: 51 %



Book equity: 1,252






Innovation Norway is one of the business-orientedfunding agencies. The company is intended topromote commercially and socially beneficialbusiness development, and spur regional businessopportunities through sub-goals of facilitatingmore entrepreneurs, more high-growth compa-nies and more innovative businesses. The com-pany administers business-oriented policy instru-ments on behalf of various ministries and county-level authorities. These instruments cover financ-ing, competence, branding and promotion, net-working and consultancy services. The companyalso derives income from the interest margin onloan schemes, equity-based schemes and user-paid services. Innovation Norway’s head office isin Oslo.


The objective of the state’s ownership of Innova-tion Norway is to promote a nationally-coordi-nated service of business-oriented measures andschemes to spur commercially and socially benefi-cial business development and promote regionalbusiness opportunities. As an owner, the Ministryof Trade, Industry and Fisheries aspires toenhance Innovation Norway’s role as a pivotalplayer in the shaping and execution of nationaland regional business and innovation policy. It is arequirement for the company to be run efficiently.

9.4.9 Kings Bay AS


The purpose of Kings Bay AS is the operation andutilisation of the company’s properties on Sval-bard and other associated activities. The com-pany’s activities shall have the particular objectiveof providing services to and promoting researchand scientific activities, and to help develop Ny-Ålesund as an international Arctic scientificresearch station.


Kings Bay owns the ground and most of the build-ings in Ny-Ålesund on Svalbard. The company isresponsible for the location’s infrastructure andfor protecting the environment and cultural heri-tage. With the exception of services such as thepolice, rescue and emergency preparedness,essentially all services at the location are man-aged and provided by the company. Currently, 14research institutions from ten countries have per-manent stations at Ny-Ålesund. The NorwegianPolar Institute and Norwegian Mapping Authorityalso have stations at Ny-Ålesund. Other commer-cial activity in and around Ny-Ålesund must beadapted to the framework defined by the researchactivity. Kings Bay’s head office is in Ny-Ålesund.


The objective of the state’s ownership of KingsBay AS is to ensure that Ny-Ålesund can be devel-oped as a Norwegian centre for international Arc-tic scientific research on Svalbard. Ny-Ålesund isto be a green research station, which entails thatKings Bay must implement necessary measuresto reduce the environmental impact of activities inthe Ny-Ålesund areas to a minimum. Furthergrowth in research activity must take place withinan appropriate environmental framework. It is arequirement for the company to be run efficiently.



Founded: 1916




Book equity: 12





9.4.10 Nofima AS


The purpose of the company is to help boost com-petitiveness in the food, fisheries and aquacultureindustries through research and development,including participation in other enterprisesengaged in such activity. The company’s missionis to develop research projects in close coopera-tion with users. The company does not have acommercial purpose, and is partially financedthrough public subsidies. Any surplus from activi-ties must be entirely used for the company’s non-profit purposes. The company does not pay divi-dends to the shareholders.


Nofima delivers research-based expertise andconsultancy to the value chains that produce food,whose raw materials come from fishing, aquacul-ture, stable or field. The company’s primary focusis to assist the members of the value chain todevelop solutions that yield better profitability inboth the short and long terms. The companyemploys a wide range of instruments for develop-ing profitable solutions. Long-term, applied andindustry-oriented research projects stretchingover several years create the foundation for thecompany’s expertise. This research forms thebasis of the advice given to individual producersor companies. One important aspect of the com-pany’s work is to ensure that the projects are rele-vant to the industry, are correctly executed and

that the results are of high quality and are actuallyput into use. Nofima’s head office is in Tromsø.


The objective of the state’s ownership of NofimaAS is to help ensure that Norway has a strongexpert research environment able to meet theneeds of the food, fisheries and aquaculture indus-tries for long-term, strategic industrial research. Itis a requirement for the company to be run effi-ciently.

9.4.11 Norfund


Norfund’s purpose is to provide equity and otherrisk capital, and offer loans and guarantees for thedevelopment of sustainable business activity indeveloping countries. The objective is to establishviable, profitable business that would not other-wise get off the ground due to its high risk.


Norfund is a development policy instrumentaimed at the private sector in developing coun-tries. The company aims to contribute to develop-ment by making sustainable and profitable invest-ments in business activities in developing coun-tries, which would not otherwise be realised dueto the high risk. Norfund invests in new compa-nies and in the expansion and modernisation ofexisting ones, and aims to combine a concern forprofitability with the overarching objective of pro-



Founded: 2007




Book equity: 30





Corporate form: Special law company

Founded: 1997


Owner: Ministry of ForeignAffairs


Book equity: 10,201





moting sustainable development. The companyinvests in conjunction with other partners, and isalways a minority interest owner. It prioritisesinvestment in Africa, south of the Sahara and theleast developed countries (LDCs) and focuses onareas where Norway possesses special expertiseand interests, notably renewable energy. The com-pany operates in regions with demanding anduncertain framework conditions. It prioritisesinvestments in renewable energy, finance institu-tions and agriculture and agriculture-relatedindustries. At year-end 2013, Norfund’s totalinvestment portfolio was NOK 9.6 billion. Nor-fund’s head office is in Oslo.


The objective of the state’s ownership of Norfundis to assist in the development of sustainable busi-ness activity in developing countries by financingviable, profitable activities which would otherwisenot be realised due to the high financial risk. Thefund is responsible for providing equity and otherrisk capital, and offering loans and guarantees forthe development of sustainable business activityin developing countries. The activities must beundertaken in compliance with the fundamentalprinciples of Norwegian development policy. It is arequirement for the company to be run efficiently.

9.4.12 Norwegian Seafood Council AS


The company’s purpose is to promote value cre-ation in the fisheries and aquaculture industriesby increasing demand and awareness of Norwe-gian seafood in Norway and abroad. The companydoes not have a commercial purpose.


The Norwegian Seafood Council’s primary mis-sion is to perform general marketing of Norwe-gian seafood. The activities cover four areas: jointmarketing, market information, market accessand information and preparedness. This isintended to boost demand for and awareness ofNorwegian seafood abroad. The company regu-larly performs surveys of the consumption of andattitude to seafood in general and Norwegian sea-food in particular. The company issues statisticson the export and import of Norwegian seafoodbased on Norwegian national trade statistics. Italso maintains a register of Norwegian seafoodexporters. It is financed by the fisheries and aqua-culture industries through a levy on the export ofseafood (the market fee), and an annual fee ofNOK 15,000 from registered fish exporters(around 450 at any one time). The Norwegian Sea-food Council’s head office is in Tromsø.


The objective of the state’s ownership of the Nor-wegian Seafood Council AS is to have a sectoral-policy instrument to help boost value creation inthe fisheries and aquaculture industries throughincreased demand for and awareness of Norwe-gian seafood at home and abroad. It is a require-ment for the company to be run efficiently.



Founded: 1991




Book equity: 314





9.4.13 Norsk Helsenett SF


The purpose of Norsk Helsenett SF is to ensurethe existence of a suitable and secure infrastruc-ture for efficient interaction between all parts ofthe health and care services, and to contribute tothe simplification, streamlining and quality assur-ance of electronic services for the benefit ofpatients and the population in general. In provid-ing the services, the company must take intoaccount the general economic interest on a per-manent basis, with reference to rules on state sub-sidy in the EEA agreement.

The company has a non-economic purpose,and it is not intended to generate a surplus greaterthan is necessary to ensure prudent operation.The company is however focused on both finan-cial results and efficient resource allocation suchthat the services offered are of good quality anddesigned and implemented cost efficiently.


Norsk Helsenett customers are local authorities,general practitioners, hospitals and associatedunits, other health personnel groups and third-party service providers such as operations andsystem providers, public registers and databasesetc. All local authorities, health enterprises, GPsand pharmacies as well as many consultants areconnected to the health network. The servicesavailable in the health network are comprehen-sive, consisting in part of services provided by the

company itself and in part of services provided byhundreds of different third-party providers. Thebasic service comprises the health network withmessaging, access to an address directory, secureinternet access and associated customer service.Other services include transmission over the net-work of reimbursement claims to HELFO, anational service for patient transport involvingbooking and pooling patient journeys, and anational settlement system for patient journeys.The company operates a range of national solu-tions such as www.helsenorge.no, a nationalpatient records system, and also has a key role ina number of national ICT projects in the sector.Norsk Helsenett’s head office is in Trondheim.


The objective of the state’s ownership of NorskHelsenett SF is to secure access to necessaryhealth data on a secure ICT platform for theadministration and communication of secureinformation and use of telemedical solutions inthe sector. It is a requirement for the company tobe run efficiently.

9.4.14 Norsk Rikskringkasting AS


Under Section 6–1, para. 3 of the BroadcastingAct, the purpose of the company is to provide pub-lic service broadcasting and related activities. Thepurpose is expanded on in Sections 12–17 of thecompany’s statutes.



Founded: 2009


Owner: Ministry of Health andCare Services


Book equity: 105






Founded: 1933


Owner: Ministry of Culture


Book equity: 1,260






Norsk Rikskringkasting (NRK) is the country’slargest media company with daily coverage of 88per cent of the population. By market shares, thecompany is the largest in radio and television andthe second largest in news-based websites. Inaddition to traditional broadcasting, under thepresent statutes, the company must be present onand develop new services for all important mediaplatforms in order to achieve the broadest reachwith its combined programming. The company’sthree TV channels, 16 radio channels andwww.nrk.no website offer broad content on arange of platforms. The digital terrestrial networkis the company’s primary distribution platform fortelevision. Digitisation of the TV terrestrial net-work was completed in December 2009. The planis for the transition to digital radio to be com-pleted in 2017, or at the latest 2019. Public servicebroadcasting is a key instrument of Norwegiancultural and media policy and must be indepen-dent of all special interests, both political andfinancial. Under the statutes, the main channelsmust be available to the entire population, whilethe company must seek the widest possible distri-bution of its other programming. The company isrepresented throughout Norway and has corre-spondents in various locations abroad. Throughsubsidiaries, the company may undertake com-mercial activities with the object of generating rev-enues for public service broadcasting; see Section6–4 of the Broadcasting Act. Norsk Rikskring-kasting’s head office is in Oslo.


The objective of the state’s ownership of NorskRikskringkasting AS is to ensure good provisionof public service broadcasting in Norway. Publicservice broadcasting is a key instrument in Nor-wegian cultural and media policy. The state’sinvolvement in the company is based on it havingan important social role. This applies to publicownership, funding by licence and the pro-gramme requirements. Norsk RikskringkastingAS has a special responsibility for promoting dem-ocratic, social and cultural values in the commu-nity. It is a requirement for the company to be runefficiently.

9.4.15 Norsk samfunnsvitenskapelig datatjeneste AS


The purpose of the company is to manage data forand provide services to the research sector. In col-laboration with national and international entities,the company’s mission is to perform developmentwork within its remit.


Norsk samfunnsvitenskapelig datatjeneste wasestablished in 2003 having previously been part ofthe Research Council of Norway. The companyhas a mission to facilitate and improve the work-ing conditions for Norwegian empirical research.Activities are organised on the basis of the com-pany’s national responsibility for providing centralinfrastructure services to Norwegian research.This entails the company acting on a broad basisto secure access to data for researchers and stu-dents by collecting, processing, filing, maintainingand distributing data. Norsk samfunns-vitenskapelig datatjeneste’s head office is in Ber-gen.


The objective of the state’s ownership of Norsksamfunnsvitenskapelig datatjeneste AS is toensure data management for and service provi-sion to the research sector. The company cooper-ates with national and international entities to per-form development activities in line with its mis-



Founded: 2003


Owner: Ministry of Educationand Research


Book equity: 16





sion. The company has a duty to adopt a neutralstance in relation to its cooperation partners. Stateownership contributes to ensuring that the educa-tion and research sector’s data provision and ser-vice management needs are met. It is a require-ment for the company to be run efficiently.

9.4.16 Norsk Tipping AS


In accordance with the gambling regulations laiddown by the Ministry, the company’s mission is toorganise and operate gambling in safe formsunder public control, with the aim of preventinggambling’s negative consequences, while,through rational operation of the company, ensur-ing that as much as possible of the surplus fromgambling goes to the purposes referred to in sec-tion 10 of the Gambling Act.


Norsk Tipping has the sole right to offer a rangeof gambling facilities in Norway, and operates itsbusiness in compliance with the Gambling Act;see the company’s mission statement. Thenational budget for 2014 sets out a change in thedistribution of the surplus from gambling. Thiswas decided by the Storting through its treatmentof a specific proposal concerning the issue: Draftresolution 205 L (2012–2013) and Recommenda-tion 45 L (2012–2013). The gambling surplus is tobe distributed as follows: 56 per cent for sportingpurposes, 14.9 per cent for extra-budgetary cul-tural purposes, 18 per cent for humanitarian andcharitable organisations and 11.1 per cent for cul-

tural purposes accounted for in the national bud-get. In addition, funds are set aside for gamblingaddiction research, information, prevention andtreatment. Norsk Tipping’s head office is atHamar.


The objective of the state’s ownership of NorskTipping AS is to channel Norwegians’ desire togamble into moderate and responsible proposi-tions that do not create social problems. It is arequirement for the company to be run efficiently.

9.4.17 Petoro AS


The purpose of Petoro AS is to hold the responsi-bility for and to attend to the commercial aspectsrelated to the state’s direct financial interest inpetroleum activities on the Norwegian Continen-tal Shelf (NCS), and business associated here-with.


Petoro is a state-owned limited company whichmanages the state’s direct financial interest(SDFI) in Norwegian oil and gas activities. SDFIcomprises the state’s participation as a directinvestor in petroleum activities on the NCS. Thecompany is the licensee for the state’s shares infields, pipelines, exploration licences and onshorefacilities on the NCS and is the licensee for thestate’s share in three exploration licences on the



Founded: 1946


Owner: Ministry of Culture


Book equity: 159






Founded: 2001




Book equity: 25





Icelandic Continental Shelf. The main objective ofthe company’s management of SDFI is to achievethe highest possible revenue for the state. Thecompany’s main duties are: 1) Management of theSDFI assets held by the government in joint ven-tures at any given time, 2) Monitoring Statoil’smarketing and sales of the petroleum producedfrom the SDFI, in line with the instruction issuedto Statoil and 3) Financial management for theSDFI, including the keeping of accounts. Thecompany’s operations are financed by appropria-tions from the central government budget. Theappropriations cover administrative expensesrelated to the management of the commercialaspects of the SDFI. This includes its own admin-istrative expenses and the purchase of externalservices. Petoro’s head office is in Stavanger.


The objective of the state’s ownership of PetoroAS is to ensure the best possible management ofthe state’s direct financial interest in petroleumactivities on the NCS. It is a requirement for thecompany to be run efficiently.

9.4.18 Simula Research Laboratory AS


The purpose of the company is to undertake fun-damental long-term research in selected areas insoftware and communication technology, andthrough such research to promote innovation inbusiness and industry. The company does nothave a commercial purpose, and does not distrib-ute dividends to its owners.


Simula Research Laboratory has three primaryduties: research at a high international level, edu-cation in partnership with Norwegian universitiesand innovation based on the company’s research.The decision to found the company was madeduring parliamentary discussion of the budget for2000. The Simula centre was set up as a project ofthe University of Oslo in 2001, and established asa limited company in 2002. Creation of the com-pany was a step in the state’s IT-Fornebu initiative,when it became owner of the company. SimulaResearch Laboratory AS is the parent company ofa group comprising the wholly-owned subsidiariesSimula Innovation AS and Kalkulo AS and thepart-owned subsidiary Simula School of Researchand Innovation AS (Simula 56 per cent, Statoil 21per cent, Bærum municipality 14 per cent, TelenorCommunication II AS 7 per cent, Norwegian Com-puting Center 1 per cent, Sintef Holding AS 1 percent). Simula Research Laboratory’s head office isin Fornebu.


The objective of the state’s ownership of SimulaResearch Laboratory AS is to contribute to funda-mental long-term research in selected areas insoftware and communication technology. Stateownership of the company helps ensure a highinternational level of research in Norway, and pro-duces highly qualified researchers. The state’sfinancing contributes to achievement of the com-pany’s objective. It is a requirement for the com-pany to be run efficiently.



Founded: 2002




Book equity: 33





9.4.19 SIVA SF


Through its real estate and innovation activities,SIVA is a government instrument for facilitatingownership and development of companies andindustrial and knowledge clusters throughoutNorway. SIVA has a special responsibility for pro-moting growth in remote areas.


SIVA is part of the business public support systemaimed at triggering commercially and sociallybeneficial projects that would not otherwise getstarted. The company’s areas of activity are realestate and innovation. Within its real estate activi-ties, the company offers construction and leasingof buildings and physical infrastructure for busi-ness and innovation clusters. The activity isintended to alleviate companies’ risks and capitalrequirements and lower the entry barriers wheremarket mechanisms make this especially demand-ing. The real estate activity is operated on com-mercial terms. Within innovation, the companyperforms assignments on behalf of three minis-tries, providing support for incubation activitiesand so-called business gardens throughout Nor-way. The company emphasises network buildingand skills transfer between research and innova-tion centres, private industry and public activities.The activities are aimed at facilitating the estab-lishment and growth of companies in industrialand knowledge clusters, and interlink these in

regional, national and international networks.SIVA’s head office is in Trondheim.


The objective of the state’s ownership of SIVA SFis to promote profitable business development incompanies and regional industrial and knowledgeclusters, in particular in remote areas, by facilitat-ing physical and organisational infrastructure. Asthe owner, the Ministry of Trade, Industry andFisheries wishes to further develop the companyas an effective, targeted tool in the business-ori-ented public support system, with prime expertisewithin its areas of responsibility. It is a require-ment for the company to be run efficiently.

9.4.20 Space Norway AS


The company’s purpose is to own and lease outspace-related infrastructure and to make otherinvestments in space-related activities, includingowning shares in other companies engaged insuch activities.


Space Norway (formerly Norsk Romsenter Eien-dom) has a mission to promote business and infra-structure development relating to Norwegianspace-related activities. The company was for-merly managed through the state agency Norwe-gian Space Centre. The company has been a keysectoral-policy instrument for developing Norwe-



Founded: 1968




Book equity: 1,153



Profit/loss after tax and minority interests: 3.7 Table 9.46 Company information and key figures.

The figures are for 2013 and in NOK millions.


Founded: 1995




Book equity: 65





gian space-related activities over many years.Within the framework of its sectoral-policy man-date, the company is to be operated on a commer-cial basis. At present, its primary activities are theadministration of ownership of the subsea fibrecable from Harstad to Longyearbyen, a long-termlease of a transponder on Telenor’s Thor 7 satel-lite (which is for ensuring communication to theTroll research station in Antarctica) and 50 percent ownership in Kongsberg Satellite ServicesAS (KSAT). Space Norway’s head office is inOslo.


The objective of the state’s ownership of SpaceNorway AS is to contribute to the operation anddevelopment of space-related infrastructure inorder to meet national user requirements andfacilitate value creation based on space-relatedactivities in Norway. It is a requirement for thecompany to be run efficiently.

9.4.21 Statnett SF


Statnett SF is the system operator for the Norwe-gian power system. Under its statutes, the enter-prise is responsible for ensuring rational opera-tion and development of the central grid in accor-dance with socio-economic criteria. On its own orin conjunction with others, Statnett SF is to plan,design, build and operate transmission infrastruc-ture. Statnett SF is to undertake the tasks incum-bent upon it under the terms of legislation andlicences. Statnett SF shall otherwise follow com-mercial principles.


Statnett is the system operator for the Norwegianpower system, which entails a responsibility forensuring a proper balance between generationand consumption of electrical power in Norway atall times. The company currently owns around 90per cent of the central grid, as well as interconnec-tors to other countries. The company shall ensurethe rational development of the grid way in accor-dance with economic criteria. The company’s rev-enues are regulated by the Norwegian WaterResources and Energy Directorate. Norway cur-rently has interconnections to Sweden, Denmark,Finland, the Netherlands and Russia. In 2013, Stat-nett applied for a licence to allow powerexchanges with Germany and the UK. Statnett’shead office is in Oslo.


The objective of the state’s ownership of StatnettSF is to contribute to the socially and economi-cally rational operation and development of thecentral grid. The company shall otherwise followcommercial principles. The company is the sys-tem operator for the Norwegian power systemand is responsible for critical infrastructure.These are tasks of major significance for nationalsecurity. The state’s ownership of Statnett SFhelps the enterprise to be perceived as a neutralmarket participant. It is a requirement for thecompany to be run efficiently.



Founded: 1992




Book equity: 12,135





9.4.22 Statskog SF


The purpose of the company is to manage, operateand develop public forest and mountain lands, andassociated resources and other naturally associ-ated activities. Within this framework, the enter-prise may, through participation in or cooperationwith other entities, administer and manage prop-erties and other forms of service within the enter-prise’s area of activity.

The properties are to be managed efficientlywith a view to achieving a satisfactory financialreturn. An active nature conservation policy shallbe conducted and consideration given to outdoorrecreational interests. The resources shall be uti-lised in a balanced fashion and renewableresources protected and developed.


Statskog manages around 60,000 km2 of land,which is roughly one fifth of Norway’s surfacearea. This is essentially all mountain and wilder-ness. The company is the country’s largest forestowner, with around 6 per cent of the total produc-tive forest in Norway. The company’s commercialactivities comprise forestry, wilderness manage-ment and other land and property management.The company has a mission to stimulate and facili-tate public access to hunting, fishing and otheroutdoor pursuits. Other management and devel-

opment of the enterprise’s properties are basedon its primary objective of helping fulfil nationalpolicies for the use and protection of forest andwilderness areas, and to increase its own and oth-ers’ value creation in respect of the properties.Beyond this commercial activity, the companyundertakes administrative duties on behalf of thestate. These comprise national administrativeduties, supervision of property and common land,administration of hunting and fishing on state landetc. Statskog’s head office is in Namsos.


The objective of the state’s ownership of StatskogSF is to ensure efficient resource management forthe benefit of society, to meet the public demandfor hunting, fishing and outdoor recreational facili-ties and so forth. Much of the company’s holdingsare common land, use of which is regulatedthrough various legal frameworks. National own-ership allows the state to achieve various politicalgoals associated with the administration of forestand wilderness areas. The company is to be oper-ated on a commercial basis.

For a number of years, Statskog SF has tar-geted the development of renewable energy basedon its properties’ resources. The governmentassessment is that Statskog SF’s investments inrenewable energy do not fall within the enter-prise’s core activities and expertise, and theyentail increased risk and uncertain benefits. Themajority of the revenues from power productionwill derive from leasing waterfall rights, and thegovernment therefore believes that Statskog SFshould limit its activities to this.

The government wishes to promote privateforestry by selling areas from Statskog SF, equiva-lent to its purchases in recent years, with refer-ence to the government’s political platform (theSundvolden Declaration). In pursuit of this, thegovernment will assess different models for theprivatisation of Statskog SF’s forestry activity.This includes continuing, and potentially alsoexpanding, the ongoing rationalisation sales. Itmay also be appropriate to evaluate other forms ofprivatisation of Statskog SF’s forestry activities. Amapping will be performed of the extent to whichpublic access to hunting and the conditions forhunting, fishing and outdoor recreation may beaffected by privatisation, and how it can beensured that this is not weakened.



Founded: 1993


Owner: Ministry of Agricultureand Food


Book equity: 1,680





9.4.23 UNINETT AS


The purpose of UNINETT AS is to develop andoperate the academic research network in Nor-way so that higher education and research isoffered cost-effective communications services ona par with best international practice in the aca-demic domain. UNINETT AS is to be a drivingforce in the use of forward-looking and open stan-dards for electronic infrastructure in Norway, andsimulate development and competition in thisfield.


UNINETT operates the academic research net-work in Norway. The company supplies a networkinfrastructure comprising production servicesand a separate test network comprising experi-mental services. The institutions connectedinclude Norwegian universities and university col-leges, non-commercial research institutions andother research and educational institutions. Thecompany also has project-based links to commer-cial research environments and public institu-tions. Other institutions and users may also beoffered the company’s services if there are noalternative service providers and this benefits thecompany’s primary target group. UNINETT’shead office is in Trondheim.


The objective of the state’s ownership ofUNINETT AS is to secure the operation anddevelopment of a national electronic network forinformation exchange between groups and usersin Norwegian research and education. State own-ership of UNINETT AS aims to safeguard theoverarching concern of coordination and expan-sion of the whole national infrastructure foradvanced research and higher education. It is arequirement for the company to be run efficiently.

9.4.24 University Centre in Svalbard AS


The purpose of the company is to provide studyoptions and perform research based on Svalbard’sgeographical location in a High North area, andthe particular advantages this offers through theuse of nature as a laboratory and arena for obser-vations and data collection and analysis. The studyoptions are to be at university level and offered asa supplement to the education provided at univer-sities on the mainland, and form part of an ordi-nary course of study leading to exams anddegrees at bachelor, master and doctoral levels.The studies offered must have an internationalprofile, and teaching will be done in English. Thecompany does not have a commercial purpose.Any surplus from operations must be used for thecompany’s primary purpose.



Founded: 1993




Book equity: 160






Founded: 2002




Book equity: 20






University Centre in Svalbard (UNIS) wasfounded as a limited liability company in 2002,replacing the Universitetsstudiene på Svalbardfoundation that was set up in 1994. The companyhas the world’s northernmost university studiesand has established itself as a key player in theSvalbard research platform. UNIS has grown sig-nificantly since it was established and plays a keyrole in Svalbard in general and in Longyearbyen inparticular. The company aspires to be a leadinginternational centre for Arctic studies. UNIS hasbecome an important feature and resource in thelocal community. The company receives themajority of its allocation from the budget of theMinistry of Education and Research. UniversityCentre in Svalbard’s head office is in Longyear-byen.


The objective of the state’s ownership of Univer-sity Centre in Svalbard AS is to contribute to thecentre’s university level study provision andresearch activities based on Svalbard’s location inthe High North. In terms of research policy, Sval-bard is considered to be an important arena forthe internationalisation of Norwegian researchand cooperation with foreign researchers; see alsoreport no. 22 (2008–2009) to the Storting on Sval-bard. It is a requirement for the company to berun efficiently.

9.4.25 AS Vinmonopolet


Vinmonopolet is one of the most important instru-ments for ensuring the responsible sale of alcohol.Through its sole rights on the retail sale to con-sumers of alcoholic drinks containing more than4.7 per cent by volume, the mission of Vinmono-polet is to help restrict the sale of alcoholic drinksand thereby the damage they do.


Vinmonopolet’s activities consist of the sale ofalcoholic items and non-alcoholic party drinks tothe extent and in the manner determined by law,with reference to Section 3, Act no. 18 of 19 June1931 on wine monopoly. Pursuant to Section 3–1of Act no. 27 of 2 June 1989 on the sale of alcoholicbeverages (the Alcohol Act), AS Vinmonopolethas a sole right to the retail sale of alcoholic bever-ages of more than 4.7 per cent alcohol by volume.The company is a key means of achieving the pur-poses of the Alcohol Act. With effect from 1 Janu-ary 1999, the company has been responsible forthe import, wholesale and retail of alcohol on Sval-bard through its Nordpolet AS subsidiary. Thealcohol policy framework defines clear limitationsfor the company’s commercial operation, not leastthat the company may not conduct sales promo-tional activities. Furthermore, it is a key plank inthe company’s social mission to ensure that salesare made in controlled ways with particular atten-tion paid to social control. Vinmonopolet’s headoffice is in Oslo.


The objective of the state’s ownership of AS Vin-monopolet is to ensure that the sale of alcoholicdrinks of more than 4.7 per cent by volume takesplace in controlled ways so as to limit the harmfuleffects of alcohol in Norway for the individual andfor society. Due to the alcohol policy objective ofrestricting the sale of alcohol, no targets aredefined for the company’s financial results beyondthe requirement to operate as efficiently as possi-ble.



Founded: 1922




Book equity: 479





9.4.26 Regional health authorities

The purpose of the enterprises

Through their duty of care, the regional healthauthorities (RHAs) have overall responsibility forensuring access to health services for the region’spopulation by offering high-quality and equitablespecialised health services to all who need them,when they need them regardless of age, gender,place of residence, personal finances or ethnicbackground, and to facilitate research and train-ing.

Table 9.52 Central Norway RHA. Company infor-mation and key figures. The figures are for 2013 and in NOK millions.

Corporate form: Health enterprise

Founded: 2001




Book equity: 5,803




Table 9.53 Northern Norway RHA. Company infor-mation and key figures. The figures are for 2013 and in NOK millions.


Founded: 2001




Book equity: 7,346




Table 9.54 South-Eastern Norway RHA. Company information and key figures. The figures are for 2013 and in NOK millions.


Founded: 2007




Book equity: 24,654




Table 9.55 Western Norway RHA. Company infor-mation and key figures. The figures are for 2013 and in NOK millions.


Founded: 2001




Book equity: 9,928





The enterprises’ activities

The regional health enterprises are the CentralNorway RHA (Helse Midt-Norge), the NorthernNorway RHA (Helse Nord), South-Eastern Nor-way RHA (Helse Sør-Øst) and the Western Nor-way RHA (Helse Vest). They have the followingmain remits: treatment of patients, training ofhealth personnel, research, and providing instruc-tion for patients and next of kin. Helse Midt-Norge, Helse Nord, Helse Sør-Øst and Helse Vesthave their head offices in respectively Stjørdal,Bodø, Hamar and Stavanger.

They each have overall responsibility for oper-ations and investments in their own region. Activi-ties are to be undertaken within the objectives,performance requirements and frameworksestablished through statutes, decisions in enter-prise general meetings and conditions applying toparliamentary allocations. The regional healthauthorities must coordinate their activities in sub-ordinate health trusts in order to achieve appro-priate and rational utilisation of resources. TheRHAs must fulfil sectoral-policy objectives thatemerge from national health, research and educa-tion policy decisions and plans. Their overall activ-ities must be founded on consideration for users.The RHAs must ensure the establishment of nec-essary cooperation with and guidelines in respectof the local authorities in both administrative andmedical terms so as to guarantee patients a com-prehensive health and social service proposition.The same applies in respect of cooperation part-ners such as national child and family protectionand other relevant state responsibilities.

The RHAs own subordinate health enterprisesconsisting of somatic and psychiatric hospitals,and other activities within the specialised healthservice. The authorities are independent legalentities with boards at both regional and locallevel. Formal responsibilities etc. are regulatedthrough the Health Authorities and Health TrustsAct while the duties they are required to performare primarily regulated through other acts, nota-bly the Specialised Health Services Act, thePatients’ Rights Act, and the Mental Health CareAct.

As stated in the government’s policy platform,the regional health authorities are to be discontin-ued once a national health and hospital plan hasbe drawn up. The aim is to present a nationalhealth and hospital plan (white paper) to be con-sidered by the Storting in 2015. Until the plan hasbeen adopted and implemented, the regionalhealth authorities shall retain a central coordina-tion and management role.


The objective of the state’s ownership of theregional health authorities is to guarantee special-ised health services for the region’s population byoffering high-quality and equitable specialisedhealth services to all who need them, when theyneed them regardless of age, gender, place of resi-dence, personal finances or ethnic background,and to facilitate research and training. It is arequirement for the health enterprises to be runefficiently.


10 Financial and administrative consequences

The main objectives of this report are to discussthe government’s work to lay the foundations fordiversified and value-creating ownership that cancontribute to strengthening competitiveness inNorwegian business and industry and economy.The government wants to facilitate strengtheningof private ownership and reduce the state’s owner-ship over time. Nonetheless, Norway will retainconsiderable state ownership for the foreseeablefuture, and the government wishes to exercisethis ownership in a professional and predictablemanner.

Measures relating to strengthening privateownership will be dealt with in the forthcomingnational budgets. A reduction of the state’s hold-ings in individual companies can take place in anumber of ways. Potential sale of the state’sshares will entail a change in the state’s assetplacement. Reductions in the state’s sharehold-ings through non-participation in capital increasesor mergers with other companies through stockdeals, often referred to as dilution, do not lead torevenue on the national budget.

The report emphasises that reductions of stateownership will take place gradually over time and,in making its decisions, the government willassess both market-related and company specificfactors. The government will not make changes orsupport transactions unless this is financially ben-eficial for the state in each individual case.

In its exercise of state ownership, the govern-ment will emphasise areas where the state hassound preconditions for bringing value, such asstrategic and financial follow-up of the companies,the election of boards, good corporate governanceand company management. This may supportachievement of the objectives that the state has inits ownership.

The Ministry of Trade, Industry and Fisheries

r e c o m m e n d s :

Recommendation of the Ministry of Trade,Industry and Fisheries of 20 June 2014 concern-ing diverse and value-creating ownership to besubmitted to the Storting.

Published by:Norwegian Ministry of Trade, Industry and Fisheries

Internet address: www.government.no

Photo: Olaf Schjelderup and UNINETT AS, Norsk Hydro, Flytoget, Cermaq, Telenor, Hanne H. Christiansen and Unis, Øyvind Hagen and Statoil ASA, Yara International, Alan O’Neill and Statoil ASA

Printed by: DSS 03/2015

Meld. St. 27 (2013–2014) Report to the Storting (white paper)

Diverse and value-creating ownership

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