The company’s business should be clearly defined in its articles of association.

The company should have clear objectives and strategies for its business within the scope of the definition of its business in its articles of association.

The annual report should include the business activities clause from the articles of association and describe the company’s objectives and principal strategies.


The Public Companies Act requires that the articles of association state the nature of a company’s business. A company’s articles of association, together with its publicly declared objectives and principal strategies, provide the information needed to help ensure that shareholders can anticipate the scope of the company’s activities. In many cases, the business activities clause in the articles of association is expressed in relatively general terms. This may permit the company considerable freedom to change its actual activities and risk profile. The business activities clause should provide a clear statement of the nature of the company’s business. This is not intended to restrict the board of directors’ ability to take strategic decisions within the overall scope of the company’s business as defined by its owners through the articles of association. The question of appropriate balance between room for manoeuvre on the part of the board and executive management and any wish by the shareholders to limit their freedom in this respect is a matter for the general meeting.

The purpose of publishing information on these matters in the annual report is to provide shareholders and the capital markets in general with a degree of predictability. It is for the board of directors to decide how much detail should be provided in this respect after taking into account the need to protect the company’s commercial interests.

The Securities Trading Act (Verdipapirhandelloven – “Vphl.”) § 5-5 stipulates that the company must produce an annual financial report at the latest for months after the end of each financial year. The company’s business activities and the scope of the board of directors’ authority are restricted to the business specified in its articles of association, cf. Asal. § 2-2, first paragraph, item 4, or as otherwise approved by the general meeting.