Norwegian Code of Practise:
- The board of directors should produce an annual plan for its work, with special emphasis on objectives, strategy and implementation.
- The board of directors should issue instructions for its own work as well as for the executive management with particular emphasis on clear internal allocation of responsibilities and duties.
- A deputy chairman should be elected for the purpose of chairing the board in the event that the chairman cannot or should not lead the work of the board.
- The board of directors should consider appointing board committees in order to help ensure thorough and independent preparation of matters relating to financial reporting and compensation paid to the members of the executive management. Membership of such sub-committees should be restricted to members of the board who are independent of the company's executive management.
- The board of directors should provide details in the annual report of any board committees appointed.
- The board of directors should evaluate its performance and expertise annually.
The duties of the board of directors
The Board of Directors bears the ultimate responsibility for managing the Group and for supervising routine management and the Group's business activities. This entails that the Board is responsible for establishing control systems and for the Group operating in accordance with the adopted value platform and Code of Ethics, as well as in accordance with the owners' expectations of good corporate governance. The Board of Directors primarily looks after the interests of all the shareholders, but is also responsible for the interests of the Group's other stakeholders.
The Board's main tasks are to contribute to corporate competitiveness, and to ensure the Group develops and adds value. Further, the Board of Directors shall participate in the shaping of, and adopt the Group's strategy, exercising the requisite control functions and ensuring that the Group is well run and organised. The Board sets the objectives for financial structure and adopts the Group's plans and budgets. The Board also handles items of major strategic or financial importance to the Group. These tasks are not constant. The focus will depend on the Group's needs at any given time. The Board hires the CEO, defines his or her work instructions and authority, and sets his or her wages.
Instructions for the Board of Directors
The Board's instructions are extensive and were last revised on 6 February 2008. The rules cover the following points: Notification of Board meetings, notification deadlines, administrative preparations, Board meetings, Board decisions, the keeping of minutes, the Board's competency and setting the agenda, the division of work between the Board and the CEO, relations between subsidiaries and the parent company, independence and disqualification, main principles for the work of the board of directors in connection with a possible corporate takeover, confidentiality and professional secrecy, relations to legislation, regulations and instructions.
The Board of Directors may decide to deviate from the instructions in certain cases.
Instructions for the CEO
There is a clear division of responsibilities between the Board and executive management. The Chair is responsible for the Board's work being conducted in an efficient, correct manner and in accordance with the Board's terms of reference. The CEO is responsible for the Group's operational management. The Board has drawn up special instructions for the CEO.
Financial reporting
The Board of Directors receives monthly financial reports on the Group's economic and financial status.
Notice of meetings and discussion of items
The Board schedules regular board meetings each year. Ordinarily, there are eight meetings held each year. Additional meetings are convened on an ad hoc basis. In 2008, there were nine Board meetings and one Board seminar. The Board meeting had 97 per cent attendance in 2008.
All directors receive regular information about the Group's operational and financial progress well in advance of the scheduled Board meetings. The directors also receive monthly operations reports. The Group's business plan, strategy and risk are regularly reviewed and evaluated by the Board. The directors are free to consult the Group's senior executives as needed.
The Board draws up and establishes an annual plan, including special themes for the Board meetings. Ordinarily, the CEO proposes the agenda for each Board meeting. The final agenda is decided in consultation between the CEO and the Chair of the Board.
Besides the directors, Board meetings are attended by: the chief executive officer, chief financial officer, executive vice president, Public Affairs, and vice president, General Counsel (secretary of the Board). Other participants are summoned as needed.
The Board takes decisions of particular importance to the Group, including the approval of the annual and quarterly accounts, strategies and strategic plans, the approval of significant investments (usually those in excess of MNOK 10), and the approval of business acquisitions and disposals.
New directors are briefed on the Group's current strategy and historical factors related to its current situation.
Professional secrecy - communication between the Board and shareholders
The Board's proceedings and minutes are in principle confidential unless the Board decides otherwise or there is obviously no need for such treatment. This is pursuant to the instructions for the Board of Directors.
Expertise
The entire Board has gone through an extensive programme designed to give directors insight into the Group's business activities. In 2007, the Board and corporate management toured the Group's operations in Northeast and Southeast Asia. The purpose of the trip was to improve the Board's insight into commercial activities in the area. In 2008, the Board visited a variety of units in Norway.
Disqualification
The Board is bound by the rules regarding disqualification as they appear in §6-27 of the Public Limited Companies Act and in the Instructions for the Board. In 2008, there was one case in which a director had to abstain from the treatment of an item due to disqualification.
Use of Board Committees
The Group has stipulated the use of a Nominating Committee in the Articles of Association. In addition, the Board set up two subcommittees in 2005: An Audit Committee and a Compensation Committee. Both committees prepare items for consideration by the Board. They are responsible only to the full corporate Board and their authority is limited to making recommendations to the Board.
The Board's Audit Committee
The Audit Committee has responsibilities related to financial reporting, the independent auditor, internal audits and risk management. In 2008, a great deal of attention was focused on the Group’s risk management. The Committee consists of two shareholder-elected directors and one employee-elected director. The independent auditor usually attends the meetings. The CEO and the other directors are entitled to attend if they so desire. Four meetings were held in 2008.
Members: There will be a new composition after the Board meeting in June.
The mandate for the Audit Committee is published on the Group's website (find link on the right hand side).
The Board's Compensation Committee
The Committee has responsibilities linked to the CEO's terms of employment, questions of principle related to wage levels, the bonus system, pension systems/terms, employment contracts, etc. for executives, as well as other matters related to compensation that the Committee believes to be of special importance to the Group. The Committee consists of the Chair of the Board, one shareholder-elected director and one employee-elected director. The CEO is entitled to participate in the Committee's meetings when he so desires, except when his own situation is under discussion. Five meetings were held in 2008.
Members: Finn Jebsen, Erik Must and Roar Marthiniussen.
The mandate for the Compensation Committee is on the Group's website (find link on the right hand side).
The Board's evaluation of its own work
Each year, a special Board seminar is organised on topics related to the Group's business activities and the Board's duties and working methods. The Board's working methods and interaction are discussed on an ongoing basis, especially at the Board seminars. In this connection, the Board also evaluates its efforts in terms of corporate governance. Thus far, the Board has not found it practical to take advantage of external consultants for its self-evaluation. The evaluation is made available to the Nominating Committee.