DNV’s outgoing boss bashes tax avoiders

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It’s not everyday that a business executive speaks out in favour of paying taxes, especially at the United Nations. Last week, however, the outgoing chief executive of large Norwegian classification society DNV-GL bashed companies that actively avoid paying taxes in countries where they do business. He also urged more climate accountability and denounced business’ lust for short-term profits.

Henrik O Madsen, retiring after 33 years at Høvik-based DNV-GL (the former Det Norske Veritas) is urging more social responsibility in the business world. PHOTO: DNV-GL

Henrik O Madsen, retiring after 33 years at Høvik-based DNV-GL (the former Det Norske Veritas) is urging more social responsibility in the business world. PHOTO: DNV-GL

Henrik O Madsen spoke at the UN in connection with his role as leading the evaluation of the UN Global Compact, the world’s largest initiative to boost social responsibility among companies. Newspaper Dagens Næringsliv (DN) reported that in doing so, Madsen probably became the first chief executive of a Norwegian company to address the UN, with Secretary General Ban Ki-moon looking on.

His message was aimed at making business more accountable and sustainable, in terms of contributing to their communities through paying taxes and becoming more climate-conscious.

“Many big multinational companies don’t pay corporate taxes, and I think that’s reprehensible,” Madsen told DN. “It’s not enough that the employees pay taxes, the company must pay taxes, too.”

How else, he asked rhetorically, can a company operate in a country? “The companies expect that the infrastructure they need is in place when they come,” Madsen pointed out. “Someone has to pay for that.” In response to a question from DN, he had no problem singling out Google, Apple, Starbucks and Facebook as avoiding taxes in many countries where they have done business, albeit legally.

DNV-GL's Henrik  O Madsen at the UN last week. PHOTO: DNV-GL

DNV-GL’s Henrik O Madsen at the UN last week. PHOTO: DNV-GL

He said he wasn’t sure such companies would be so popular when “folks seriously become aware” that they haven’t paid tax, such as in the case involving Starbucks’ ability to legally avoid paying tax in the UK. “I think there will be a public demand that they pay tax,” Madsen told DN. “It’s legitimate to ask what you get in return for paying taxes, and to make sure taxes don’t go into the pockets of corrupt leaders. This goes both ways.”

Thousands of companies now follow UN Global Compact principles tied to human rights, working conditions, the environment and anti-corruption efforts. Even though many companies voluntarily report their work in meeting the principles, there’s no punishment if they don’t.

The UN’s goal, and Madsen’s, is attainment of a more sustainable form of capitalism. After 15 years of operation, results so far are mixed and the goal may never be reached.

“We hope it will, but the jury is out,” Madsen, who is Danish, said at a press conference in New York. On the climate side, he hopes a price will soon be attached to carbon emissions. And he hopes for more regulation, which isn’t always viewed negatively any longer.

Madsen also urged investors and companies to think about sustainability, also from a profit standpoint. Short-term profits aren’t the only thing executives should strive for, he says. “It’s very difficult, but I think steadily more companies realize that they can’t just think from quarter to quarter anymore,” Madsen told DN. “They have to think more long term.”

newsinenglish.no/Nina Berglund

  • frenk

    Strange man – with strange ideals/ideas?

  • frenk

    It’s the ‘easy attitude’ for Norwegian’s…..who sit in their state controlled monopolies….profit….pardon?

  • Sidney Vianna

    Strange ideas? To expect that business pay their fair share of taxes? How else would society be able to provide the educated workforce business needs? How else would society be able to provide the infrastructure that business needs to prosper? Strange ideas? Not really. It is refreshing to see that some business people have the courage to tell it “like it is”.

    As a DNV GL employee, I suspect that the message also pokes at (at least) one of our main competitors which enjoys non-profit/tax-exempt status while it is CLEARLY a commercial enterprise.

    Kudos to Mr. Madsen for bringing this up in a major international event.

    • frenk

      I imply by your comments that this gentleman had a ‘personal objective’…when making his speech?
      Business is ‘international’ these days….not that many in Norway care to recognize….due to the fact that Norway is ‘isolated’…and not really part of the larger ‘business community’. With so many sales now completed online….sales may be logged financially in a completely different country from the actual sale….this is very difficult to manage for individual governments..and again…from what you say…and from what this ‘Madsen’ say’s….you want extra…expensive layers of bureaucracy to try to monitor and control this?

      Also – many companies operate and work on a short-term basis….they need to make ‘fast profits’….’quick sales’ in order to compete/expand/survive…obviously Mr Masden comes from the comfortable ‘corporate world’…..etc….

      I myself run a UK limited company in Norway on a ‘temporary basis’….we do not pay Norwegian corporation tax….we pay ourselves a small salary on which we pay Norwegian income tax…basically all our expenses in Norway are business expenses. Corporation tax and personal income taxes are paid to the UK government.