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Board-level Representation

The right to have a single employee representative at board level starts with companies with 30 employees in Norway. In companies with more than 50 workers, one third of board members are elected by and come from the employees.

 

Employees in Norwegian companies with 30 or more employees are entitled to elect employee representatives on to the board of directors and in smaller companies this can be done on a voluntary basis. They apply, with minor exceptions to all workplaces which have a separate legal personality.1 In companies with between 30 and 50 employees, they are entitled to a single director, irrespective of the size of the board, and in companies with more than 50 but less than 200 employees, they are entitled to one third of the seats.

 

 

The right to elect employee representatives as directors is contained in a number of different laws, but most forms of company are covered, as are a number of state agencies, such as universities. Some industries are exempted from the requirement to have employee directors, including foreign shipping and newspapers, although the right to elect employee board level representatives is included in the collective agreements for these industries and they are therefore covered..

 

 

Companies with more than 200 employees should in principle have a different structure, with a corporate assembly (bedriftsforsamling) as well as a board. The corporate assembly must have at least 12 members, with two-thirds elected by the shareholders and one third elected by and from the employees. The employee corporate assembly has a general supervisory role and may take decisions on large scale investments or restructuring. The corporate assembly also chooses the board of directors, although one third of the board continues to be chosen by the employees. However, companies with more than 200 employees can chose not to have a corporate assembly, provided that they have reached agreement with unions representing at least two-thirds of all the employees. In this case the employees are entitled to an additional board member on top of the one third they already have, plus two additional observers. In practice, only a small number of companies with more than 200 employees has a corporate assembly.

 

 

Employee representation is not automatic in companies with fewer than 200 employees: employees must request it, either through a formal request signed by at least 50% of the workforce or a majority vote on the issue, which can be initiated by either the works council or one of the company unions. However, if a request along these lines is received, and the company has 30 or more employees, employee board-level representation must be established. In practice, while employee directors are common among larger companies, they are found less frequently in smaller ones. A 2007 survey by Fafo found that 74% of companies with 200 or more employees had employee directors, but the figure fell to 59% for those with between 50 and 199 employees and 37% with those between 30 and 49. The overall percentage for all companies with 30 or more employees was 53%. The same legislation applies to groups of companies, with employees having the right to directors on the group board. Here the Fafo study found a similar pattern of employee involvement: 70% among those with 200 or more employees, 65% among those with 50 to 199 employees , 26% among those with 30 to 49 employees, and 52% overall.2

Employee directors are elected by the whole workforce and they must themselves be employees. However, the unions have considerable influence on the process and often the leading union figures within the company are also the employee representatives on the board. The situation has been affected by legislation aiming to ensure that at least 40% of board members are women, which came into effect at the start of 2008. In relation to employee directors, the legislation requires that both sexes must be represented if two or more board members are elected by the employees. This does not apply if one sex makes up less than 20% of the workforce. However, this legislation only applies to public limited companies (the ASA companies). There are some 250 ASA companies but they account for approximately half the workforce in the private sector.

 

 

Employee directors have the same powers and rights as all other directors.

L. Fulton (2013) Worker representation in Europe. Labour Research Department and ETUI. Produced with the assistance of the SEEurope Network, online publication available at http://www.worker-participation.eu/National-Industrial-Relations.