The much-criticized board of Norway’s biggest bank, DNB, survived at least one shareholder’s attempt that it be all but overthrown this week. Both board leader Anne Carine Tanum and four other members were re-elected, but only pending the results of investigations into whether the board has shirked its responsibilities.
At issue is DNB’s highly controversial operations in Luxemboug, where bank staff worked with a law firm in Panama that helped it register companies in tax havens on behalf of wealthy bank customers. Both Tanum and DNB’s top management have claimed they were unaware of the practice, and that it never should have been allowed.
That hasn’t satisfied all of its shareholders or officials of the Norwegian government, which owns the largest take in DNB after the state bailed its prececessor banks out of serious financial trouble in the early 1990s. Tax avoidance is also dealt with harshly by Norway’s social welfare state, which relies on tax revenues, so DNB has found itself in serious trouble since its Luxembourg activites were revealed as part of newspaper Aftenposten’s access to documents leaked by the Panamanian law firm.
On Tuesday DNB managment and board members had to face shareholders at its annual general meeting. The experience was not pleasant, with both Tanum and DNB’s chief executive, Rune Bjerke, subjected to verbal abuse by shareholder Odd Dag Bjørndal, who could take the podium several times by virtue of his ownership of just one share of DNB stock. He took it upon himself to vent outrage on behalf of others: “I own one share and the state 34 percent, but they haven’t opened their mouths,” he claimed at one point, according to state broadcaster NRK’s account of the shareholders meeting that packed a DNB auditorium. The state, and not least Trade Minister Monica Mæland, has demanded detailed information from the bank and expressed both criticism and skepticism over DNB’s operations, but that didn’t satisfy Bjørndal.
“I’m coming with constructive criticism to bring the bank further,” he claimed, adding that otherwise, public disgust with DNB would grow. He also lashed out at Tanum personally, claiming that she’s the one who has the most responsibility for ensuring sound and ethical bank operations and that she should be fired for failing to maintain control.
Election committee postponed any overthrow
The committee responsible for nominating Tanum and other board members, however, disagreed, at least for now. Committee leader Eldbjørg Løwer, a former defense minister and politician for the Liberal Party, and her committee colleagues decided that they should move forward with their recommendation that all five existing board members be re-elected, pending results of the investigations and Tanum’s and Bjerke’s answers to Mæland’s questions. If new information comes forward that would incriminate Tanum and Bjerke, Løwer noted that shareholders can call for a new extraordinary shareholder meeting to determine the board’s fate. Løwer indicated that it was premature to make such decisions now. Bjørndal’s proposal to fire Tanum now was firmly rejected by 98.79 percent of his fellow shareholders.
Tanum herself claimed in prepared remarks that the board was taken the bank’s tax-haven activity seriously, claiming that “we should not have contributed to opening up companies in the Seychelles.” She claimed the board was now taking measures to obtain facts in the case, answer the government’s questions, impose more thorough controls, re-evaluate the organization and routines of DNB’s Luxembourg operation and put more emphasis on principles involved with participation in international operations. CEO Bjerke, meanwhile, vowed the bank would restore confidence in DNB, and follow up on the board’s new demands.
DNB’s problems have raised new issues about how the boards of state-owned companies function, and whether their members are doing their jobs. The boards of Hydro, Statoil, Yara, Telenor and Kongsberg Gruppen have all been confronted in recent years with corruption allegations, and several have been criticized for being too passive. Mæland is also being challenged and criticized by angry Members of Parliament, as are her predecessors in former governments, for failing to follow up on the state’s owernship in such companies and demanding more accountability.
The results of the various investigations going on into DNB’s tax haven activity are due later this spring.