This overview is based on the The Norwegian Gambling Authority’s “board test for foundations” (norwegian only).
1) Are the foundation’s current statutes registered in the Foundation Register?
Foundations must have statutes. They must, among other things, state the name, purpose, share capital and composition of the board. The articles of association must ensure a clear and good framework for the foundation’s assets, purpose, management and independence. You can check whether the foundation is registered in the Foundation Register (norwegian only).
Status: No. The foundation is planned to be formally established as soon as possible during autumn 2022, and registration will take place immediately after that.
2) Is information about the foundation’s current board updated in the Brønnøysund registers?
Foundations must have a board. It must be elected, and it must carry out work and exercise responsibilities in accordance with the foundation’s statutes and the Foundations Act. Updated information on i.a. name, date of birth, contact information and powers of attorney for board members must be available at all times in the Brønnøysund registers and the foundation register. Send any changes via coordinated register message.
Status: No. The foundation is planned to be formally established as soon as possible during autumn 2022, and registration will take place immediately after that.
3) Does the foundation have regular board meetings to deal with matters that fall under the board’s purview?
The board is the foundation’s highest body and is responsible for proper administration of the foundation. According to the Foundation Act, the board must hold a board meeting at least once a year. The board usually has several regular board meetings, often set out in an annual plan.
Since the board is responsible for managing the foundation, the board must deal with matters concerning distributions, the budget, accounting reporting, entering into agreements, etc. It follows from the Foundations Act that the board must approve distributions and ensure control over accounting and asset management. If it is necessary to acquire other knowledge and expertise, the board must ensure this.
Status: The foundation’s board will itself decide how many board meetings are needed after the foundation is established.
4) Does the foundation have written board instructions?
A written board instruction deals with the board’s responsibilities and work, and is a tool that provides guidelines and frameworks for the board’s organization and administration. The instructions often describe the division of responsibility and work both within the board and towards other roles, e.g. day-to-day management and business manager. It is natural to describe delegation and powers of attorney.
Status: The foundation’s board will itself design its board instructions after the foundation is established.
5) Does the foundation have a written plan or strategy for implementing the purpose?
A plan or strategy for implementing the purpose is necessary for the board to be able to manage the foundation in the long term in accordance with the purpose provision, cf. the articles of association. The articles of association can also deal with specific purpose groups and give instructions to the board on how the purpose is to be carried out. The board must consider this and take it into account in the plan.
For many foundations, the purpose must be realized in the form of distributions. According to the Norwegian Foundations Act, the board must decide on all distributions. It is also the board’s responsibility to have an overview of whether other types of transactions (rental of housing, purchase of services, etc.) in practice result in a distribution, and whether it is, if so, within the foundation’s purpose.
Status: The foundation’s board will design this itself after the foundation is established.
6) Does the foundation have a written plan or strategy for capital management?
A plan or strategy for asset management is necessary for the board to be able to manage the foundation’s funds and thus safeguard the purpose in the long term. In addition, the plan will be a management tool to ensure proper management of the foundation’s capital. The plan should establish a strategy and provide an overview of the foundation’s capital, the need for liquidity in the short and long term, assessment of risk, appropriate distribution, targets for return etc.
The articles of association can provide guidance on the placement of capital and handling of any returns. The board must consider this and take it into account in the plan. Capital management also means securing funds in other ways than simply placing the funds, e.g. maintenance plans for the preservation of property. The board’s responsibility applies even if tasks are outsourced to external asset managers. The responsibility then consists of following up, i.a. through control and reporting.
Status: The foundation’s board will design this itself after the foundation is established.
7) Is the board’s work documented with notices and board minutes?
The foundation’s board work must be documented with notices and board minutes. The purpose of the procedure rules in the Foundations Act is to ensure that the board’s assessments and decisions are sound, transparent and verifiable. Summons must be sent in an appropriate manner and with a reasonable deadline, and they must usually contain a list of cases with attachments that provide a sufficient basis for proper case management. Documented board minutes must state the time and place, participants, method of processing and board decision, and it must be signed by everyone who attended the meeting.
Status: The board in question is well acquainted with board work.
8) Does the board follow the rules for hability?
Rules for impartiality must ensure that board members are not involved in matters where the member himself or the member’s close relatives have financial or personal special interests. The board should have written procedures for disqualification and must practice that in such cases the board member does not participate in the processing or decision of the board case. The foundation must therefore have an overview of the board members’ roles and close relationships.
If it is relevant to enter into an agreement with a business owned by a board member or a close relative, a risk will arise for the foundation. The board must then – in addition to following the rules on impartiality – ensure contractual basis and follow-up routines that ensure and document that product and service purchases are made at market price and do not involve any illegal distribution from the foundation.
The overall purpose of the strict rules for disqualification and related transactions is to ensure the foundations’ independence and assets as well as trust and reputation. This provides security for the foundation.
Status: The board in question will have a strong focus on hability.
9) Har styret tilstrekkelig internkontroll?
By that we mean routines and reporting that ensure management in accordance with the law, statutes and instructions.
Ensuring proper management of the foundation is a continuous responsibility of the board. It is essential to have good routines for managing the foundation. It is also important to have reporting in place which ensures that the board catches unwanted conditions and changes, and follows through with the necessary measures. This should be included in the normal internal control and organization of the foundation. If necessary, you can attach special expertise for assessment, e.g. accountant.
Status: The board in question will have a strong focus on internal control.
Last Updated on 2023-03-17 by Karl Aakerro