Board of trustees report

Goal achievement and results

Financial results

BI delivers positive results at a time of economic uncertainty, higher costs and geopolitical unrest. BI's result is strongly affected by a large reversal of the pension liability on the balance sheet. At the same time, there has been a record-breaking admission to the school's full-time studies.

Annual results and the board's measures

BI is an independent foundation whose sole purpose is teaching and research. All profits will be used to strengthen this purpose and students' learning.

The group

BI Norwegian Business School Foundation is the parent company, with a corporate structure consisting of the 100% owned subsidiaries BI-Bygget D-Blokka AS, Sandakerveien D-Blokka AS, Sandakerveien 116-118 AS, Bedriftsøkonomisk Institutt AS, and Studentenes Hus AS. 

All the companies have their business address at Nydalsveien 37, Oslo. Of the subsidiaries, only BI-Bygget D-Blokka AS was active in 2023 through the letting of premises. BI-Bygget D-Blokka AS owns 21.7% of the property in Oslo, while the Business School Foundation BI owns 78.3%. The group's turnover was NOK 1,969 million in 2023, and the operating profit was NOK 239.8 million.

The group's property investments are financed through a mortgage in DNB Bank ASA, with security in the properties in Nydalen. Instalments corresponding to NOK 10 million have been paid in the group during the year, and the remaining mortgage loans amount to NOK 393 million at the time of the balance sheet. In total, the group's financial items amounted to a cost of NOK 20,9 million in 2023. The real value of the properties in Nydalen is considered to be well above the book value.

The group's profit before tax for the year was NOK 218.9 million. The tax cost for the year was NOK 6,5 million, which relates to the rental business in both the parent company and the subsidiary BI-Bygget D-Blokka AS. Thus, profit after tax was NOK 212.4 million.

Net cash flow from operational activities and investments was NOK -47.4 million. At the end of the year, NOK 185.7 million of the group's right of withdrawal of NOK 250 million had been used, compared to NOK 127.7 million at the same time in 2022. The book equity for the group as of 31 December 2023 was NOK 1,018 million.

BI Norwegian Business School Foundation

In 2023, the BI Norwegian Business School Foundation had a profit of 197.8 million after tax. The result for 2023 includes a reversal of the pension obligation in connection with the pension scheme change from a benefit-based pension to a contribution-based pension for a group of employees. This reversal resulted in an income of NOK 198.2 million, giving a deficit in 2023 of NOK -0.4 million. The board is satisfied with the measures taken to improve BI's financial results for the time ahead.

The BI Norwegian Business School Foundation achieved an income growth of NOK 42.6 million from 2022 to 2023, which resulted in a total turnover of NOK 1,942 million. State aid amounted to NOK 461.3 million, or 23.8% of turnover. Tuition income rose by NOK 19.3 million to NOK 1,403 million, an increase of 1.4%. The prices for studies and courses were regulated by 5% on average for the year 2023.

There was a good admission to the first year of a full-time bachelor's degree, with an increase of 408 students from autumn 2023. The number of students who progressed from the first to the second year of study for a bachelor's degree showed an improvement compared to the autumn of 2022. In the third year of study, there was a reduction in the number of students due to a weak intake in the autumn of 2021. In total, the number of full-time bachelor's students increased by 183. Admission to the first year of master's studies rose from 736 students in autumn 2022 to 830 students in autumn 2023, an increase of 12.8%.

The turnover for executive education fell from NOK 443 million in 2022 to NOK 421.1 million in 2023. The turnover in online courses and the MBA study organised at Fudan University in Shanghai sharply dropped in 2023. The turnover in the corporate market increased from NOK 98 million in 2022 to NOK 102 million in 2023.

Operating profit increased by NOK 240.3 million and ended at NOK 217.5 million. The high operating result was strongly driven by significant reversals of pension liabilities linked to liquidating a closed defined benefit pension scheme for a group of employees.

Much of the cost base is linked to wages and social costs. Salaries and other personnel costs fell by 14.7%. This reduction is related to discontinuing the defined benefit pension for a group of employees with a transfer to a defined contribution pension and the return of NOK 198.2 million in pension obligations linked to this scheme. In addition, the number of employees has been reduced by 16 FTEs. There has been a reduction in the administration of 21 FTEs and an increase in the professional staff of 5 FTEs. Launching a new law programme drove the growth in faculty. In 2023, many cost-reducing measures were implemented, which, together with reduced energy prices, resulted in decreased operating costs from NOK -24.5 million to NOK 616.1 million. This is despite high price increases for most goods and services except energy.

Depreciation fell by NOK 0.7 million from 2022 to NOK 100.7 million in 2023. Large digital investment projects completed in 2023 will be used in 2024, and depreciation will begin on these facilities, increasing depreciation in the future.  

Net financial items increased by NOK 1.7 million to NOK 17.5 million. This is due to reduced liquidity and increased use of drawing rights.

Interest-free instalments were agreed upon on the mortgage loan with DNB in 2023. On the balance sheet date, NOK 185.7 million of the withdrawal right of NOK 250 million was used, an increase of NOK 58 million compared to 2022. In 2023, a net withdrawal was made against the subsidiary BI-Bygget D-Blokka AS for NOK 56.8 million through a group account arrangement. The foundation follows a financial security strategy, meaning a minimum of 33% of the mortgage must always be secured through fixed interest rate agreements. On the balance sheet date, the part of the loan tied up in fixed interest rate agreements amounts to NOK 150 million. The hedging ratio is 49.5% on the balance sheet date. The fixed-rate agreements have different durations; the next one expires in January 2026, while the longest one expires in April 2028.

The cash flow from operations amounted to NOK 30 million, up from NOK 23 million in 2022. In 2023, pension scheme payments increased by NOK 41.8 million to NOK 184.7 million. Investments amounted to NOK 101.4, down from NOK 111.9 million in 2022. The liquidation of defined benefit pensions for a group of employees is expected to improve the balance of the cash flow going forward. Still, in 2023, this decision had no liquidity effect despite significant reversals of pension liabilities accounted for.

It is not difficult to find either short-term or long-term financing, and there is currently an agreement with DNB on drawing rights with varying limits throughout the year. For parts of the year, there is no need for a right of withdrawal, as the business has surplus liquidity in periods around the large semester payments at the beginning of the semester.

BI is financed by student fees and competes with public players who offer free studies, which creates a significant market risk. BI depends on a steady flow of students, and a large number of students at the bachelor's level is essential. The management addresses the market exposure continuously, and the board is confident that the foundation is equipped to handle fluctuations in results.

As of February, the preliminary numbers of applicants for full-time studies in the autumn of 2024 are better than at the same time in 2023. It is expected that the number of full-time students in the first year of study in the autumn of 2024 will be at least at the same level as in the autumn of 2023.

The company's financial risk is monitored and analysed continuously. Financial risk includes credit risk, liquidity risk and interest rate risk. Credit risk is mainly accounts receivable, which is considered a minor risk as the company has good routines for collecting outstanding claims. The net loss on claims has been stable over several years, and there is no reason to believe this will change significantly. Liquidity risk is assessed as low as the liquidity flow to the company is stable and predictable. The interest rate risk is considered limited. The company currently has interest-bearing mortgage loans of NOK 303 million, secured by interest-rate swap agreements of NOK 150 million. In addition to the mortgage, a part of the right of withdrawal is used, which will vary significantly during the year.

The foundation's equity was added to the year's profit by NOK 197.8 million. Changed calculation assumptions for the pension schemes resulted in a negative estimate deviation of NOK 56.3 million, entered directly against the equity following the accounting standard. Thus, the net contribution to equity was NOK 141.5 million.

At the end of the year, the building in Nydalen had a book value of NOK 1,327.5 million. Operating assets are depreciated according to the same principles as in previous years.

The remaining debt to DNB amounts to NOK 488.7 million on the balance sheet date, including NOK 185.7 million in used right of withdrawal. At the time of the balance sheet, the foundation meets the lender's covenant requirements.

Following the Accounting Act §3-3 a, it is confirmed that the prerequisites for continued operation are present. As of 2023, the board has not taken out a board liability insurance.

High quality in education and research

BI climbed nine places from last year and now ranks 39th among the 90 best business schools in Europe in the Financial Times' leading ranking of European business schools. In addition, BI has kept its status as a so-called "Triple Crown school" through the AMBA reaccreditation in 2023. Together with only one per cent of business schools in Europe, BI has the three most recognised accreditations a business school can have: The Association to Advance Collegiate Schools of Business (AACSB), European Quality Improvement Systems (EQUIS) and The Association and MBAs (AMBA) — clear proof that BI delivers world-class education and research.

Over time, the authorities have been clear that the course of study must be relevant to working life. Therefore, the board is satisfied that the labour market survey 2023 shows that 87% of BI's bachelor's and 97% of master's students were employed 6 months after graduation. 

As an international business school, BI recruits from recognised professional environments worldwide. The proportion of internationals in faculty was 38% in 2023, compared to 40% in 2022.

A significant part of BI's investment in research is the school's doctoral programme. The board will highlight establishing a new PhD specialisation in accounting and auditing in 2023. This was an important step in achieving the ambition that the PhD programme should cover all of BI's subject areas. It was also impressive that a record number of PhD scholarship holders defended their dissertations at BI in 2023 with 16 dissertations.

Another significant milestone was the start of BI's first CAS (Centre of Advanced Study) project in 2023. In the same year, BI was awarded its second prestigious CAS project. Both of these are important recognitions of the level of research at BI and the scientific expertise at the Department of Finance and the Department of Social Economics.

Over time, BI has invested in developing outstanding lecturers, and students attach great importance to this when choosing a place of study. In 2023, BI appointed its first five Excellent Teacher Practitioners. This scheme has been created to recognise and reward talented educators. The board hopes this investment will further develop BI's status as an outstanding educational institution.

It is an important strategic investment that BI research is published in recognised international scientific journals. Over several years, the number of articles published in top-ranked scientific journals has increased. For 2023, the number of scientific publications remained at the same high level as in 2022, a record year at BI.

In 2023, BI's externally funded research projects had a turnover of NOK 41.4 million. Despite a decrease compared to 2022, the trend over recent years shows a general increase for externally funded research. BI focuses on increasing research funding from the Research Council of Norway and the EU. As part of this, in 2022, BI started BI's Research Talent Programme, a programme for BI's young research talents who have ambitions to win in the Research Council's Research Project for Young Talents (FRIPRO) or the European Research Council's (ERC) Starting Grant programme. The first participants finished the programme in 2023, and the board looks forward to the investment bearing fruit in the future.

BI appointed three new honorary doctors as part of BI's 80th anniversary. Professor Nicholas Bloom (Stanford University) and Professor Kathryn E. Spier (Harvard Law School) were recognised for their significant contributions to important subject areas for BI researchers. BI's students elected Lise Klaveness, President of the Norwegian Football Federation, because of her efforts for equality and human rights.

In 2023, AF‐gruppen, Backe, Multiconsult, Norconsult, OBOS, Statsbygg and Veidekke joined forces to finance BI's endowment professorship in efficient construction processes with NOK 4.2 million spread over a period of three years. This endowment professorship will further develop BI's professional environment related to research, education and knowledge dissemination within the Norwegian construction, construction and property industry.

Welfare, value-creation and reorganisation

Good learning experiences and well-being among the students are a high priority for the board and the organisation. Follow-up of students, both socially and academically, is an important part of this work. BI facilitated several skills courses and guidance for students last year, in addition to social measures at the start of studies and throughout the year. Activities include: 

• Tutoring, where students help other students.
• Coffee Hour in the student cafeteria.
• Courses on important study tools.
• Assistance to students who want help forming study groups.

The board is concerned about the students' physical learning environment, which has been highlighted in the Learning Environment Committee (LMU) reports. A survey of the students' use of reading places shows capacity challenges during the exam period. BI is exploring different solutions to improve capacity on campus Oslo and campus Bergen.

Ensuring student study progression is an important task at BI. For the bachelor students, the completion rate was 48%, a reduction of just under 5% compared to last year. Among the master's students, the completion rate decreased from 84% in 2022 to 82% in 2023. The completion rate for PhD students increased significantly, from 45.5% in 2022 to 71% in 2023. For the latter, it is important to note that the numerical basis is minimal and that small changes have a significant impact.

As a leading European business school, BI's studies must be constantly developed and renewed. Large and important projects are ongoing, contributing to BI's ability to deliver research-based teaching programs and outstanding learning experiences.

The authorities have emphasised that universities and colleges must facilitate increased mobility. In this context, the board will highlight the long-term work on revising BI's bachelor's model, which was implemented for students who started at BI in the autumn of 2023. The new bachelor's model allows more students to go on exchange and gain international experience, which aligns with the authorities' expectations. The model also provides closer business cooperation through BI's internship scheme. Sustainability is also more strongly integrated into the introductory courses of the bachelor's studies.

The Degree Planning project will enable BI to manage the students' increased expectations for flexibility and individual adaptation of their course of study while ensuring BI's profitability with effective support systems and work processes. The project has been ongoing since 2021, and implementation is happening gradually. An important milestone from last year was when 200 master's students tested out the new education plan and choice of course in November 2023.

The board looks forward to BI's new application and admissions system, BIAX, launching in autumn 2024. By combining several services related to applications and admissions on the same platform, BIAX will facilitate a more seamless user experience for students and staff.

The board has high expectations for the ongoing Future Program Delivery project, an innovation project that will impact how BI delivers education in the future. Among other things, possibilities related to combinations of digital and physical teaching, classroom design, and more intensive and short-term course deliveries are explored. Technological development offers many teaching opportunities, and students also have increased expectations for BI to use this technology. The board emphasises that this is necessary for BI to deliver high-quality teaching and flexibility for both students and staff. 

Organisation

Organisational changes

BI has neither implemented nor plans any organisational changes affecting the Foundation's legal or financial position.

Temporary employees

In addition to the qualifying fixed-term positions, BI has only 15 temporary faculty employees, 3% of the total number of faculty. Three individuals are in temporary positions, nine are engaged in engagements, and three are in temporary fixed-term positions. Of the nine engagements, two are waiting to transition to a postdoctoral position, six are employed temporarily, awaiting employment in permanent positions, and one is employed temporarily in an externally funded research position.

Among administrative employees, at the end of 2023, BI had one temporary engagement, which amounted to a half FTE, and 23 substitutes for people on leave. Temporary engagements accounted for 0.2% of the total administrative employees due to short-term capacity needs related to digitalisation.

BI considers it important to offer students income opportunities and work experience alongside their studies. Student employees are students who work at BI alongside their studies. In 2023, BI had 163 student employees in temporary positions, accounting for 50% of the total student employees.

Gender equality, discrimination and accessibility

BI's policy for diversity and equality confirms that all employees must have the same rights, duties, and opportunities regardless of gender, age, ethnicity, national origin, functional ability, outlook on life, and sexual orientation. BI has a plan for equality and strives for gender distribution within the 60-40 interval and systematic pay differences to be equalised. BI's equality work is regularly reported to the board and described in more detail in BI's annual equality statement.

BI aims to strengthen its commitment to diversity, inclusion, equality, and belonging for students and employees. This work is referred to internationally as DEIB (Diversity, Equity, Inclusion, and Belonging). 

In 2022, HR initiated a working group to revise BI's diversity guidelines. In December 2023, proposals for new guidelines were presented to the school's management. The focus going forward will be on setting overall goals and implementing measures where necessary.

The board is concerned that BI has purposefully worked throughout the year on diversity-related activities. Seminars on diversity have been organised on campus, strengthening the school's Pride commitment. The headmaster has also been a panellist and moderator at several external conferences focusing on diversity, including the SHE conference and the Diversify Nordics Summit.

BI annually surveys gender balance and pay distribution in various positions. This, together with the work on equality and diversity, is reported in line with the activity and reporting obligation imposed by the Equality and Discrimination Act.

The proportion of women in faculty increased from 34.7% in 2022 to 36.5% in 2023. At the end of 2023, BI had 33 female professors, of which 28 were in full permanent positions. Therefore, the proportion of women among professors increased from 25% to 27.7%.

There are still significant variations across job categories and institutes. The proportion of men in administrative positions is stable at almost 35%. The proportion of men in director-level administrative management positions has increased from 30% to 42%.

BI carries out annual equal pay surveys and has not registered any systematic biases that cannot be explained. Among administrative employees, women's fixed salary as a percentage of men's salary is between 93% and 101%. The most significant difference (93%) is in job category 5 (senior advisers and middle managers). This is mainly because, in this category, there are more male employees in the Digital department, where the market salary is higher than in corresponding categories elsewhere in the organisation.

In faculty, women's fixed salary as a percentage of men's is within the interval 91% - 102% in permanent positions. This can partly be attributed to more men having been professors for a long time. It tends to even out somewhat as there is a better gender balance among professors. There are very few female professors in traditionally male-dominated fields where the salary level is generally higher.

The proportion of women on BI's board is 50%. In the College, the proportion of women is 53%. Women comprise 50% of senior management, 22% of department heads and 25% of deans.

In 2023, 62 nationalities were represented among the employees. BI has a language policy stating that English is the primary language used in internal information and when the organisation gathers. At the end of 2023, just over 21% of BI's employees had citizenship other than Norwegian, a reduction of 1% from 2022. The proportion of international employees was 7% for administrative employees and 38% for all in professional positions.

The average age for retirement with a pension is 65.8 for all BI employees. On average, faculty seniors are employed until they reach 68.6, while administrative seniors work until the average age of 65.4.

BI's campuses have been developed according to the laws and guidelines in force when they were built. The buildings follow statutory requirements, and work is continuously being done to rectify deficiencies in conversions and adaptations.

Risk management and internal control

In recent years, the board has closely followed BI's efforts to strengthen and professionalise the work with risk management and internal control. The priority is to put in place a systematic approach that helps to identify, handle, and follow up on any incidents that may negatively affect target achievement and promote compliance with external and internal regulations. A separate independent unit for Governance, Risk and Compliance (GRC) was established in 2020. The GRC reports its work to the board and is responsible for preventive and controlling activities. GRC looks after the Data Protection Ombudsman and the Student Ombudsman and ensures that these roles are sufficient independently of other management.

In 2021, the board decided to establish an external internal audit function. In 2023, an internal audit related to the notification system and research ethics was conducted. Findings and results were reported to the board, which was also informed of planned follow-up measures. GRC has conducted internal audits and assessments focusing on safety, preparedness, and ranking processes. None of the four internal audits revealed critical issues.

Overall risk assessment is linked to the business objectives that follow from BI's strategy. In addition, operational risks are assessed, which are of such a nature that they can prevent or negatively affect the achievement of targets if they are not handled. The board has dealt with the case regarding BI's overall risk picture as assessed in June 2023.

Public safety and emergency preparedness

The board emphasises the importance of BI preventing serious incidents in its security and preparedness work and planning for good preparedness that limits the damaging effects of incidents. BI follows the requirements and recommendations that emerge from the management document for work with social security and preparedness in the Ministry of Education's sector and grant letters to private universities.

In 2023, two exercises were carried out with strategic and operational emergency management related to cyber attacks against BI's IT systems. The internal audit on security and preparedness aimed to investigate whether BI had sufficient and appropriate routines and processes to prevent and deal with threats and violence against students and staff. No serious shortcomings were discovered, but familiarity with and knowledge of BI's routines for reporting unwanted incidents was consistently low, and measures have been taken to improve information and training. It was also recommended that a concrete risk assessment concerning access control be carried out on all BI campuses.

There were no serious incidents that threatened life and health in 2023.

The working environment

The board and BI emphasise that the school's working environment should be diverse, equal, considerate, respectful, and open communication. BI facilitates an inspiring working environment that promotes the individual's well-being, health, learning, and development. The school has zero tolerance for abuse of power and harassment.

The sickness absence based on medical certificates from doctors for BI's employees is still relatively low, although, in 2023, it increased to 3.27% from 3.0% in 2022.

In 2023, GRC gathered provisions from various regulations and guidelines in one overarching document. The board adopted BI's ethical guidelines, and HR was asked to ensure that the guidelines were well known in the organisation. The guidelines are planned to be implemented using dilemma training in 2024.

In 2021, BI introduced guidelines for the use of home offices and hybrid forms of work. These guidelines should describe how employees are expected to work in the wake of the pandemic. In 2023, an evaluation was carried out to determine whether these guidelines have successfully balanced the school's ability to be productive, flexible, and a good working environment. The result of this evaluation was positive, and new guidelines will be launched in the spring of 2024, with only minor adjustments from the 2021 edition.

It has been important for BI to show care for students and staff from conflict areas. In 2023, the school had several activities aimed at Ukrainian and Russian students and staff to ensure a good working and learning environment despite the challenges linked to their home situation.

In 2023, a safety round was carried out on all four campuses. Safety rounds and working environment surveys are carried out every two years. The rounds from 2023 show that BI has a safe and good working environment. No serious incidents, injuries (material or persons), or accidents have been registered concerning performing work at BI in 2023.

Sustainability

In line with BI's strategy, all graduates must have the knowledge and skills to make sustainable working-life decisions. The board emphasises that BI's work in training responsible managers is important to sustainable development. BI systematically operationalises this learning objective in the school's educational programmes. Through research and close contact with society and business, BI's professional communities contribute to developing courses that ensure that BI's candidates deliver in line with this ambition.

In the autumn of 2023, BI launched a new bachelor's model for the full-time market. In this model, sustainability and ethics are integrated into mandatory basic courses, such as social economics, accounting, organisation, marketing, and a separate course on "Doing sustainable business." Sustainability is also increasingly integrated into relevant programme courses and elective courses.

In addition to education and research, BI contributes to sustainable development through partnerships and dialogue with various networks. In 2023, BI became a member of the Global Business School Network (GBSN) and the United Nations Global Compact (UNGC), in addition to the school's long-standing adherence to the UN initiative Principles of Responsible Management Education (PRME).

BI has also committed to the sustainable operation of its campuses and was first certified as an Eco Lighthouse in 2010. All campuses are now Eco Lighthouse certified and meet the Foundation's requirements relating to HSE, transport, purchasing, waste management, energy consumption, and green conferences.

The board supports BI's commitment to the 1.5 degree target by working towards a 50% reduction in emissions by 2030. The school prepares annual climate accounts, showing that the four largest emissions sources are commuting, travel, food and drink and energy. These sources accounted for 90% of BI's emissions in 2022 (figures for 2023 available on 1 March). BI sets requirements for its suppliers and partners concerning the environment and social sustainability. The school's activities do not constitute significant pollution of the external environment.

The Transparency Act

BI implements measures following the requirements of the Norwegian Openness Act, which entered into force in July 2022 and aims to promote decent working conditions and fundamental human rights in the supply chain.

Contract templates and procurement procedures have been updated in 2023 to address social conditions and existing environmental requirements. A risk-based approach ensures closer follow-up of selected suppliers based on self-declaration forms and assessments. Routines, ethical guidelines, and training increase awareness and competence among employees regarding responsibilities and roles in complying with the law.

An account is published annually on BI's website by the end of June.

Market condition declaration

The board confirms that all transactions between BI Norwegian Business School and its associated units and internal transactions within the group are priced and implemented according to standard market conditions.