Home / National Industrial Relations / Countries / Norway / Board-level Representation

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 in both the public and private sector are entitled to elect employee representatives on to the board of directors and in smaller companies this can be done on a voluntary basis. 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. The laws apply, with minor exceptions, to all workplaces which have a separate legal personality, with the precise number of board-level employee representatives depending on the number of employees.[1] Employee numbers are calculated on the basis set out in the Work Environment act (AML), with employees working more than half normal hours counted as single employees, while those working less than this are counted as half employees.[2]

 

In companies with between 30 and 50 employees, they are entitled to a single board member plus one observer, irrespective of the size of the board, and in companies with more than 50 but less than 200 employees, they are entitled to up to one third of the seats and at least two board members.

 

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 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 (at least two members) 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, a study by the research group Fafo published in 2015 found that fewer than 20 companies with more than 200 employees actually had a corporate assembly.[3] However, only two-thirds of these companies compensated employees with the additional board level representation the law requires. Around one third did not.

 

In private sector companies with fewer than 200 employees, board-level employee representation is not automatic; the 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.

 

The 2015 Fafo study, which looked at all affected companies on the basis of the business register, found that 57% of companies with 200 or more employees had employee directors, but the figure fell to 31% for those with between 50 and 199 employees and 12% with those between 30 and 49. The overall percentage for all companies with 30 or more employees was 26%.

 

The same legislation applies to groups of companies, where employees have a right to directors on the group board. Here the 2015 Fafo study found a similar pattern of employee involvement: 66% among those with 200 or more employees, 38% among those with 50 to 199 employees, 18% among those with 30 to 49 employees, and 41% overall.

 

A more recent Fafo study looked in detail at the proportion of private sector employees working in companies with employee representation at board level in 2018.[4] It found that 29% of all private sector employees worked in companies with board-level employee representation, but that if only employees working in companies above the threshold above which employees can request board-level representation (at least 30 employees) were examined, the proportion rose to 55%. If only companies where board-level employee representation is mandatory (at least 200 employees) were considered, the proportion working in companies with board-level representation was higher still at 72%.

 

These proportions were, however, lower than three years earlier, when 36% of all private sector employees, 61% of employees in companies above the 30-employee threshold and 79% of employees above the 200-employee threshold, had board-level employee representation.

 

The arrangements for the election of board-level employee representatives are set out in separate regulations.[5] All employees employed by the company on election day, other than managers and those owning more than 10% of share capital the company, have a right to vote, although the votes of part-time employees only count for half those of full-time employees. Everyone with a right to vote has the right to make a nomination as does the local trade union. If the election is conducted using a list system, nominations must be supported by six employees or the local union.

 

Candidates must be employees of the company, and at least one female candidate must be nominated if women make up more than a third of the company’s employees. If two or more board members are to be elected there must be at least one candidate of each sex, unless one of the sexes make up fewer than 20% of the company’s employees. Each gender must also be included among the elected members, if there are two be two or more, unless one of the sexes make up fewer than 20% of the company’s employees. Elections take place every two years, although the term of office runs until the end of the annual general meeting in the year in which the election period ends.

 

The unions have considerable influence on the election process and often the leading union figures within the company are also the employee representatives on the board.

 

Unusually there is specific provision for training for board-level employee representatives. The basic agreement between the main employers’ association and the LO union confederation states that they have a right to leave for educational courses lasting up to one week.

 

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

[1] Flere styrer – færre ansattevalgte styremedlemmerby Inger Marie Hagen, Søkelys på arbeidslivet04 / 2017 (Volum 34), 2017 https://www.idunn.no/spa/2017/04/flere_styrer_faerre_ansattevalgte_styremedlemmer (Accessed 26.04.2021)

[2] Medvirkning og medbestemmelse i arbeidslivet, 6.1.3 NOU 2010: 01, 2010 https://www.regjeringen.no/no/dokumenter/NOU-2010-01/id597723/?ch=5#kap9 (Accessed 26.05.2021)

[3] Et sidespor: den demokratiske bedriftsforsamling by Inger Marie Hagen, Fafo-rapport 2015:34, 2015 https://www.fafo.no/images/pub/2015/20439.pdf (Accessed 26.05.2021)

[4] Ansattes styrerepresentasjon i privat sektor by Inger Marie Hagen and Elin Svarstad, Fafo-notat 2021:07 https://www.fafo.no/images/pub/2021/10344.pdf (Accessed 26.05.2021)

[5] Forskrift om de ansattes rett til representasjon i aksjeselskapers og allmennaksjeselskapers styre og bedriftsforsamling, 2017

L. Fulton (2021) National Industrial Relations, an update (2019-2021). Labour Research Department and ETUI (online publication). Online publication available at http://www.worker-participation.eu/National-Industrial-Relations.