Governance and Business Integrity

High Business Integrity standards are prerequisites for succeeding in delivering on Norfund’s mandate.

Corruption, money-laundering and other economic crime have wide-ranging negative effects on societies and are detrimental to reach the United Nation’s Sustainable Development Goals (SDGs). Norfund has a zero-tolerance approach to corruption and other forms of economic crime, and we are committed to promoting integrity, transparency and accountability in all our investments. 

The framework that governs our work 

Overall framework 

Norfund has adopted a governance framework consisting of overarching policies adopted by our Board of Directors, relevant underlying guidelines and requirements approved by the management and detailed procedures and templates to help ensure compliance and consistency throughout the organization. The governance framework underwent a major overhaul in 2020 and implementation efforts continued throughout 2021. The governance framework is regularly reviewed to make sure it is up to date and relevant.  

Business Integrity framework 

The management of Business Integrity risks is an integral part of Norfund’s investment process. We require the companies we invest in, our business partners and our employees to promote and adhere to high standards, including: 

  • Norfund Code of Conduct 
  • Norfund Supplier Code of Conduct 
  • Norfund Compliance System 
  • Norfund Business Integrity Policy 
  • Norfund Responsible Tax Policy 
  • Gift and Hospitality Guidelines 

The framework describes how we work to identify, assess and manage the Business Integrity risks associated with the operations of our investments, and provides an overview of the cross-cutting principles that guide our work, including our risk-based approach. 

Responsible Tax Policy 

Appropriate, prudent and transparent tax behavior is a key component of corporate responsibility for investors and the investees. As a responsible investor, Norfund requires that all its investees have good corporate governance and sound environmental and social practices.  

Norfund adopted a Responsible Tax Policy in 2019 with seven fundamental principles for handling of tax-related issues. In 2021, the tax policy was reviewed to ensure it was relevant and up to date. As part of this review, Norfund’s investments through third countries was assessed by an independent expert. The findings from this assessment were published and discussed with representatives of the civil society. The review, including the external assessment and the engagement with civil society, concluded the existing policy was satisfactory, but certain operational adjustments were initiated to improve the assessment of corporate structures alongside tax domicile when considering investments through third countries. In large part because of the volume of fund investments committed, Norfund made extensive use of third countries in 2021. 

Dedicated resources 

A dedicated Compliance function was added to Norfund’s legal department in 2021, in order to strengthen and further develop the organization’s capacity and competence within Governance and Business Integrity. The Compliance & Legal Counsel holds a second line of defence role in Norfund’s “three lines of defence” model and is responsible for providing a sound compliance infrastructure to enable the first line of defence to fulfil its compliance responsibility. Together with the FIHR department, the Compliance & Legal Counsel shall develop and maintain Norfund’s governance framework, facilitate implementation of Policies and Standards and provide support, guidance and advice to investment teams and the organization on compliance issues and risk management activities. The Compliance & Legal Counsel reports to the CEO, and the function is located in Oslo.  

To further raise awareness and secure harmonized practices between all offices, one Business Integrity Ambassador has been appointed for each of Norfund’s regional offices. The Ambassadors work closely together with the Compliance & Legal Counsel and participate in a joint Business Integrity Ambassador network. 

Business Integrity Week 

Norfund’s first Business Integrity Week took place in November 2021. The purpose of the event is to spread awareness and provide training in important Business Integrity practices to the whole organization and continue to build a strong Compliance culture. The Business Integrity Week will be conducted on an annual basis.