Corporate Ethics

When asked about conflicts of interest John Doerr, a famous American venture capitalist, once reportedly replied "Well, no conflict, no interest". If his firm did not have a conflict, or an unfair competitive advantage, they really had no interest in the deal.

This simple and short statement well encapsulates the American 'win at all costs' attitude you find in some industries. Businessmen and women in America like myself hear these war stories throughout their careers, along with grand tales of fortunes made by bending a few both ethical and legal rules. This is not the case in Norway.

The Norwegian Sovereign Fund

Norway created the majority of its wealth on oil, something that impacts our planet negatively, yet the country highly values ethics in how it does business. This can first be seen in the large sovereign fund created by those very same oil sales.

Over the years the fund has divested from any holdings that had a potential link to not-so-great things such as military weaponry, human rights violations, tobacco, and other "sin" investments. Even though the fund's performance has been stellar, they have certainly 'left money on the table' in exchange for a more ethical approach to investing.

This tells you a lot about how Norway operates. The sovereign fund even has an entire team dedicated to ethics that routinely examines the business practice of the many companies they invest in.

Contrast with American Startups

This focus on ethics trickles all the way down into every facet of Norwegian business. This took some time getting used to. In America if we simply need to look at some of today's largest startups and we can see their origins were not always so squeaky clean.

For example Airbnb, the largest provider of accommodations today, broke many rules to get where they are. They scraped data from websites, posted ads illegally to several classified services, and skirted just about every housing law they could, all in the name of pioneering a new business model. They received very little condemnation in the public eye as they did this, rather they were heralded for their 'scrappiness' and creative problem-solving. Some even characterized it as innovative.

The Uber Example

Another well-known American example is Uber, now the largest taxi company in the world in addition to being the fastest growing company of all time. To say they broke a few ethical rules is like saying the weather is only a little bit challenging in Norway. It would be quite the understatement.

They pushed the legal and ethical envelope in almost every area of their business – from challenging the transportation laws of the cities in which they expanded to questionable international dealings with governments and law enforcement putting them in hot water with the American Justice Department. And while some of their bad behavior has recently caught up with them, investors are continuing to pour billions of dollars into the company.

No Chance in Norway

Business like these have no chance of being created in Norway. It has actually been a challenge in my work as I push young companies and their founders to bend just about any rule to succeed. One example is pushing them market their product in what might be described as creative ways that gently massage a few rules.

"Oh I don't know if we're allowed to do that. I wouldn't want to get in a trouble", well-intentioned and ethical founder I worked with once said.

"Sounds like you would rather play it safe, even if that means going out of business in the process?" I replied, feeling extra American in saying so.

In the end this founder preferred to play it safe and not bend those rules. And in the end his business did not succeed. It's impossible to say whether if he would have had a bit more bravado if he would have been more successful.

But even just the thought of not playing by the rules was not something this Norwegian could entertain. Breaking the rules, especially in business, is not common in Norway.

Public Consequences

Those that do, regardless of the outcome is positive for their business, quickly lose respect in the public eye. The press seems also to take great pleasure in hanging those who do so out to dry.

Unlike in America, you're not likely to get a second chance when your bad behavior becomes known. The Norwegian's memory of such bad actors lasts for as long as the fjords are deep.