What should Norwegian shareholders consider when electing board members? Criteria such as legal or financial expertise are often emphasized. It is also important to be aware that the Norwegian Public Limited Liability Companies Act also sets out formal requirements, including the so-called "connection requirement" to Norway.

What requirements are imposed on Norwegian board members?

The Companies Act does not contain many rules regarding formal requirements for board members (and managing directors, where relevant). This means that the general meeting has, in principle, considerable discretionary freedom. This freedom applies to its assessments when electing the company's management.

The only formal requirements set out in the Companies Act are that board members must be of legal age. In addition, at least half of them must be resident in Norway, cf. Section 6-11 of the Companies Act. The connection requirement has been modified somewhat. This applies in that citizens of states that are party to the EEA Agreement do not have to be resident in Norway, but in an EEA state. In reality, therefore, deviations from the composition of the board are accepted. This applies if the board members are resident in the EEA area.

One might imagine that legal requirements for board members would be characterized to a greater extent by qualification requirements, etc., but the legislature has chosen a different approach.

Significance of the board being elected in violation of the Companies Act

The affiliation requirement has several consequences – both in relation to public registration and procedural rules.

Firstly, a company that does not have a board that meets the residence requirement will have to be compulsorily dissolved, cf. Section 16-15, first paragraph, no. 2 of the Companies Act.

Secondly, a board that does not meet the aforementioned requirements cannot represent the company in legal proceedings. This follows from Supreme Court practice – including Rt. 1993 p. 429.