Abstract

"Freedom of contract and company freedom. The progessive turn in Norwegian corporate law, 1890-1940"

Knut Sogner, BI Norwegian Business School (knut.sogner@bi.no)

Norwegian academic and corporate lawyers seemingly agree upon what they call the Nordic Corporate Governance Model: Strong shareholder power to create boards of directors and control top management positions within private enterprises. The power of Norwegian shareholders is something that may seem paradoxical to the outside observer who is used to seeing Nordic worklife as highly regulated through labour and environmental laws (See Per Lekvall 2014). This paper seeks to investigate how the freedom of contract situation of the 19th century interacted with the new understanding of corporate entities’ legal position that emerged, primarily from Germany, at the turn of the last century. The emerging view of the corporate entity as an individual actor somewhat detached from its shareholders made clear the corporate entity’s tort responsibilities and responsibilities towards third parties. The new view of the corporate entity clearly altered corporate power to the benefit of the organisation and to the detriment of shareholder influence. Especially important in this paper is the discussion of the new (and first) Norwegian corporate law of 1910 and to what degree it fundamentally altered the freedom of contract-situation of business or not. The paper will draw on comparisons with American and German developments, utilising analytical frameworks developed for those countries. In particular, the paper will discuss the Norwegian development in light of Morton Horwitz’s interpretation of the American development (The Transformation of American Law, 1870-1960), as the freedom of contract contexts and the German influences are remarkably similar. The hypothesis is that although the Norwegian and American developments were very similar, but that the Norwegian situation was less radically changed than the American one, preserving more of the shareholder power.