The Parliament has approved amendments to the Companies Act aimed at streamlining, enhancing efficiency, and alleviating the burden on corporations. On June 5th, the Parliament passed amendments to Article 6-11 of the Limited Liability Companies Act and the corresponding provision in the Public Limited Liability Companies Act Article 6-11, where the requirement for citizenship of the CEO and board members was eliminated. This amendment came into effect on July 1st, 2023.
Prior to this amendment, there was a condition that the CEO and at least half of the board members had to be residents of Norway or residents of another EEA state, the United Kingdom, or Northern Ireland, in addition to holding citizenship in such a state.
Citizenship is no longer a requirement
This has now been changed, as citizenship is no longer a requirement, only residency is considered. Switzerland has also been included in the list of states that can provide relevant residency affiliation, alongside EEA states, the United Kingdom, and Northern Ireland.
Giving companies more flexibility in selecting board members
The changes have been implemented to grant companies more flexibility in selecting board members, by ensuring that the citizenship of the management does not restrict their ability to execute roles as CEO or board members.
Current legislation
The purpose of Article 6-11 is to ensure that creditors, employees, and other stakeholders can hold the company's management accountable. The current legislation and international agreements entered into by Norway indicates that the residency requirement alone is sufficient to uphold this purpose, by ensuring that claims for compensation and criminal claims against the corporate leadership can be enforced.
