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The concept of ‘company interest’in Norwegian company law
Professor Beate Sjåfjell, University of Oslo and Laywer Morten Gullhagen-Revling, DLA Piper
@BeateSjafjell & @MRevling@CompanyLawGroup #PhDseminar2020
Law versus power
Photos from Unsplash
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When is the company interest relevant?
3
Ethical norms
Legislation, Articles of Association, GM decisions, contractual obligations
Scope of action: Company Interest
as a guideline
How did we identify the company interest?
• Not explicitly regulated in the Companies Acts– But ‘company interest’ is increasingly mentioned
• Analysis of a range of sources:– The Companies Acts
• Preparatory works and case law; literature
– The Accounting Act– Securities and financial market law legislation for listed companies
Also:– Corporate governance codes for listed companies– OECD Guidelines for Multinational Enterprises; UN Guiding
Principles for Business and Human Rights; etc.
The economic interest of the company
Photo by Álvaro Serrano on Unsplash
Shareholders interest
• Significance of Companies Acts Section 2-2(2)– Preparatory works– Case law
• Companies Acts distinguishes between the company and the shareholders (e.g. Sections 6-28 & 5-21)– Preparatory works
• Central but not synonymous with company interest
Creditor interests also central
• Companies Acts protects creditors
• Preparatory works emphasise creditors interests• As does case law
• Creditor interests also clearly independent element of company interest
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Employee interests
• Companies Acts– Preparatory works
• Accounting Act
• Central element –definitely legitimateinterest
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Also:• Corporate Governance Code• OECD Guidelines• UN Guiding Principles
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• Companies Acts– Case law– Preparatory works
• Accounting Act
Other societal interests
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The concept of company interest – the two approaches
Company interest
= shareholder
interest
The core = the
economicinterest of
thecompany
Legitimateinterests
CreditorsEmployees
Society
The companyinterest
Shareholders
Creditors
Employees
Society
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Why so few cases?
• Shareholder primacy drive and the business case for including other interests
• The business judgment rule• Change is coming?
UN Sustainable Development Goals (SDGs)
Source: un.org: About the Sustainable Development Agenda
Source: Raworth 2017; Leach, Raworth & Rockström 2013
Source: B. Sjåfjell, The Financial Risks of Unsustainability: A Research Agenda https://ssrn.com/abstract=3637969
Let’s discuss!
E-mail: [email protected]& [email protected]
@BeateSjafjell & @MRevling
@CompanyLawGroup #PhDseminar2020
