Language policy and corporate law: A case study from Norway

Guro R Sanden

doi:10.1017/s0332586519000222

Abstract

AbstractThis paper investigates how 492 of the largest companies in Norway comply with the language requirement of the Norwegian Accounting Act Article 3-4. The results show that 36% of the companies presented their financial statements in Norwegian only, 45% in one or more language(s) in addition to Norwegian, while 19% had been granted dispensation and presented statements in English-only. The company’s ownership, use of English as a corporate language, and industry affiliation were the three most commonly mentioned reasons for dispensation, but the findings show significant differences between industry sectors in terms of language choice. The study contributes to corporate law research by examining the interpretation and application of the Norwegian Accounting Act by the Norwegian Directorate of Taxes; to sociolinguistics by shedding new light on the concepts of domain loss and diglossia; and to language-sensitive research in international business by analysing language use in Norwegian companies.

Highlights

In the summer months of 2010, a national language policy drama unfolded in Norway
The Ministry may by regulation or individual decision decide that the financial statements and/or annual reports may be in another language
As discussed in this paper, current or potential foreign investors, the use of English as a corporate language, and international industry affiliations are some of the reasons why English can replace Norwegian as the language of financial reporting

Summary

Introduction

In the summer months of 2010, a national language policy drama unfolded in Norway. The country’s largest company measured by revenue, Statoil ASA ( Equinor ASA) decided to implement English as their common corporate language. For a company present in 36 countries (Equinor 2018), the use of a common language could significantly reduce the need for translation and interpretation. Increased globalisation and cooperation across national and linguistic borders have led a number of multinational corporations (MNCs) in the Nordic region to adopt similar English-only policies (Luo & Shenkar 2006, Piekkari, Welch & Welch 2014). In the case of Statoil/Equinor, the company’s partners and suppliers in Norway were not in agreement with the new language policy.

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