Corporate Governance Policy
as resolved by the Board of Directors on 16 May 2019
1. INTRODUCTION TO THE CORPORATE GOVERNANCE POLICY
The Board of Directors of NORBIT ASA (the “Company”) has prepared this corporate governance policy document (the “Policy”).
This Policy addresses the framework of guidelines and principles regulating the interaction between the Company’s shareholders, the Board of Directors (the “Board”), the Chief Executive Officer (the “CEO”) and the Company’s executive management team.
The Policy is based on the Norwegian Code of Practice for Corporate Governance issued by the Norwegian Corporate Governance Board. The Company will, in accordance with applicable legislation and stock exchange listing rules, provide a report on the company’s corporate governance in the directors’ report or in a document that is referred to in the directors’ report.
2. BUSINESS ACTIVITY
The Company’s business as set out its Articles of Association is:
“The company is the parent company of an internationally focused technology group which provides custom-made high-technology products in selected niche markets. This is done through acquisition, management and trading in shares, partnership interests and other securities.”
3. VISION AND VALUES
Engaging in the activities described in Section 2 above, the Company has defined:
“Explore More” as it´s core purpose.
The following corporate vision has been basis for annual board review:
“NORBIT is to be recognized as world class, enabling people to explore more.”
NORBIT gives each employee considerable scope in making decisions regarding his or her work. This implies a large degree of freedom, but it also places substantial demands on our employees. Our core values assure customer focus and in that matter function as general guidelines in our daily work.
The Company has formulated the following core values to form a guideline for the Company’s business operations:
- WE DELIVER!
- SAFE UNDER PRESSURE
- REFINEMENT OF TALENTS
4. ETHICAL GUIDELINES
The Company will maintain high ethical standards in its business concept and relations with customers, suppliers and employees. The following ethical guidelines will be practiced in
the Company and will apply to all employees of the Company:
- Personal conduct: All employees and representatives of the Company shall behave with respect and integrity towards business relations and partners, customers and colleagues. The executive management team has a particular responsibility to promote openness, loyalty and respect.
- Conflict of Interests: The Company’s employees or representatives shall avoid situations in which a conflict between their own personal and/or financial interests and the Company’s interests may occur.
- Confidential Information: Employees or representatives of the Company possessing confidential information related to the Company shall conduct themselves and safeguard such information with great care and loyalty and comply with any and all signed confidentiality statements.
- Influence: The Company’s employees and representatives shall neither directly nor indirectly offer, promise, request, demand or accept illegal or unjust gifts of money or any other remuneration in order to achieve a commercial benefit.
- Competition: The Company supports fair and open competition. The Company’s employees and representatives shall never take part in any activities that may constitute a breach of competition legislation.
- Breach of Ethical Guidelines: Any breach of these ethical guidelines may inflict severe consequences for the Company and any breach may imply consequences for the person in question.
5. COMPANY CAPITAL AND DIVIDENDS
The Board is committed to maintain a satisfactory equity ratio in the Company according to the Company’s goals, strategy and risk profile, thereby ensuring that there is an appropriate balance between equity and other sources of financing. The Board will continuously assess the Company’s capital requirements related to the Company’s strategy and risk profile.
When deciding on the annual dividend the Company will consider the Company’s financial position, investment plans as well as the needed financial flexibility for strategic growth. The Company´s long term dividend policy is to pay out dividends between 30 and 50 per cent of the company’s ordinary net profit after tax.
The Company further intends for any new material investments to be subject to separate funding through equity, debt or otherwise. The Board’s authorizations to increase the share capital and to buy own shares will not
ordinarily be granted for periods longer than until the next Annual General Meeting of the Company.
6. SHARE CLASSES
There is only one class of shares in the Company and all shares carry equal rights. The Company shall emphasize the equal treatment of its shareholders.
7. TRANSACTIONS WITH RELATED PARTIES
Any transactions, agreements or arrangements between the Company and its shareholders, members of the Board, members of the executive management team or close associates of any such parties may only be entered into as part of the ordinary course of business and on arms length market terms. All such transactions shall comply with the procedures set out in the Norwegian Public Limited Liability Companies Act. The Board shall arrange for a valuation to be obtained from an independent third party unless the transaction, agreement or arrangement in question is considered to be immaterial. The Company’s financial statements shall provide further information about transactions with related parties.
Board Members and members of the executive management team shall immediately notify the Board if they have any material direct or indirect interest in any transaction entered into by the Company.
8. TRANSFER OF SHARES
The shares of the Company are freely transferable.
9. THE GENERAL MEETING
All shareholders have the right to participate in the General Meetings of the Company, which exercise the highest authority of the Company. The Annual General Meeting shall normally be held before 30 April each year.
The full notice for General Meetings shall be sent to the shareholders no later than 21 days prior to the meeting. The notices for such meetings shall include documents providing the shareholders with sufficient detail in order for the shareholders to make an assessment of all the cases to be considered as well as all relevant information regarding procedures of attendance and voting. The notice and the documents may be sent to or made available for the shareholders by electronic communication, to the extent allowed in the Company Bylaws. The Board and the Company’s auditor shall be present at General Meetings.
Notices for General Meetings shall provide information on the procedures shareholders shall observe in order to participate in and vote at the General Meeting. The notice should also set out: (i) the procedure for representation at the meeting through a proxy, including a form to appoint a proxy, and (ii) the right for shareholders to propose resolutions in respect of matters to be dealt with by the General Meeting.
The cut-off for confirmation of attendance shall be set as short as practically possible and the Board will arrange matters so that shareholders who are unable to attend in person, will be able to vote by proxy. The form of proxy will be distributed with the notice.
10. THE BOARD – COMPOSITION
In appointing members to the Board, it is emphasized that the Board shall have the requisite competency to independently evaluate the cases presented by the executive management team as well as the Company’s operation. It is also considered important that the Board can function well as a body of colleagues. Board Members shall be elected for periods not exceeding two years at a time, with the possibility of re-election. Board Members shall be encouraged to own shares in the Company.
The Board shall comply with all applicable requirements as set out in the Norwegian Public Limited Liability Companies, Act, the listing rules of Oslo Børs and the recommendations set out in the Norwegian Code of Practice for Corporate Governance.
The Company does not have a corporate assembly.
11. NOMINATION COMMITTEE
The Company has a Nomination Committee as set out in the Articles of Association. The members of the Nomination Committee should be selected to take into account the interests of shareholders in general. The majority of the Nomination Committee should be independent of the Board and the executive management team. Members of the executive management team should not be members of the Nomination Committee. Instructions for
the Nomination Committee shall be approved by the Company’s General Meeting.
12. SUB-COMMITTEES OF THE BOARD
The Company shall have a remuneration committee appointed by the Board. The remuneration committee shall administer the Company’s bonus incentive program and provide general compensation related advice to the Board.
The Company shall have an audit committee in accordance with the rules of the Norwegian Public Limited Liability Companies Act and the listing rules of the Oslo Stock Exchange.
13. RESPONSIBILITY OF THE BOARD OF DIRECTORS
The Board shall prepare an annual plan for its work with special emphasis on goals, strategy and implementation. The Board’s primary responsibility shall be (i) participating in the development and approval of the Company’s strategy, (ii) performing necessary monitoring functions and (iii) acting as an advisory body for the executive management team. Its duties are not static, and the focus will depend on the Company’s ongoing needs. The Board is also responsible for ensuring that the operation of the Company is compliant with the Company’s values and ethical guidelines. The Chair of the Board is responsible for ensuring that the Board’s work is performed in an effective and correct manner.
The Board shall ensure that the Company has proper management with clear internal distribution of responsibilities and duties. A clear division of work has been established between the Board and the executive management team. The CEO is responsible for the executive management of the Company.
All members of the Board shall regularly receive information about the Company’s operational and financial development. The Company’s strategies shall regularly be subject to review and evaluation by the Board.
The Board shall prepare an annual evaluation of its work.
14. RISK MANAGEMENT AND INTERNAL CONTROL
The Board shall ensure that the Company has sound internal control and systems for risk management that are appropriate in relation to the extent and nature of the Company’s activities. The internal control and the systems shall also encompass the Company’s corporate values and ethical guidelines.
The objective of the risk management and internal control is to be to manage exposure to risks in order to ensure successful conduct of the Company’s business and to support the quality of its financial reporting.
The Board shall carry out an annual review of the Company’s most important areas of exposure to risk and its internal control arrangements.
The Board shall provide an account in the annual report of the main features of the Company’s internal control and risk management systems as they relate to the Company’s financial reporting.
15. BOARD REMUNERATION
The General Meeting shall determine the Board’s remuneration annually. Remuneration of Board Members shall be reasonable and based on the Board’s responsibilities, work, time invested and the complexity of the enterprise. The Board shall be informed if individual Board Members perform tasks for the Company other than exercising their role as Board Members. Work in sub-committees may be compensated in addition to the remuneration received for Board membership.
The Company’s financial statements shall provide information regarding the Board’s remuneration.
16. REMUNERATION TO THE MANAGEMENT
The Board decides the salary and other compensation to the CEO. The CEO’s salary and bonus shall be determined on the basis of an evaluation by the board, with emphasis on the the CEO’s and the Company’s over all performance. Any fringe benefits shall be in line with market practice and should not be substantial in relation to the CEO’s basic salary. The Board shall annually carry out an assessment of the salary and other remuneration to the CEO.
The Company’s financial statements shall provide further information about salary and other compensation to the CEO and the executive management team.
The CEO determines the remuneration of executive employees. The Board shall based on proposal from the remuneration committee issue guidelines for the remuneration of the executive management team. The guidelines shall lay down the main principles for the Company’s management remuneration policy. The salary level should not be of a size that could harm the Company’s reputation or above the norm in comparable companies. The salary level should, however, ensure that the Company is able to attract and retain executive employees with the desired expertise and experience.
17. INFORMATION AND COMMUNICATION
The Board and the executive management team assign considerable importance to giving the shareholders quick, relevant and current information about the Company and its activity areas. Emphasis is placed on ensuring that the shareholders receive identical and simultaneous information.
Sensitive information will be handled internally in a manner that minimizes the risk of leaks. ll contracts to which the Company becomes a party shall contain confidentiality clauses.
The Company shall have clear routines for who is allowed to speak on behalf of the Company on different subjects and who shall be responsible for submitting information to the market and investor community. The CEO and CFO will be the main contact persons of the Company in such respects.
The Board should ensure that the shareholders are given the opportunity to make known their points of view at and outside the General Meeting.
Each year, the auditor shall present to the Board a plan for the implementation of the audit work and a written confirmation that the auditor satisfies established requirements as to independence and objectivity.
The auditor shall be present at Board meetings where the annual accounts are on the agenda. Whenever necessary, the Board shall meet with the auditor to review the auditor’s view on the Company’s accounting principles, risk areas, internal control routines, etc.
The auditor may only be used as a financial adviser to the Company provided that such use of the auditor does not have the ability to affect or question the auditors’ independence and objectiveness as auditor for the Company. Only the Company’s CEO and/or CFO shall have the authority to enter into agreements in respect of such counselling assignments.
At the Annual General Meeting the Board shall present a review of the auditor’s compensation as paid for auditory work required by law and remuneration associated with other concrete assignments.
In connection with the auditor’s presentation to the Board of the annual work plan, the Board should specifically consider if the auditor to a satisfactory degree also carries out a control function.
The Board shall arrange for the auditor to attend all General Meetings.
19. FINANCIAL POLICY
The Company shall prepare a statement of its financial policy, providing details of the Company’s handling of financial risks, hedging, funding policies, etc.
20. TAKE-OVER SITUATIONS
In a take-over process, should it occur, the Board and the executive management team each have an individual responsibility to ensure that the Company’s shareholders are treated
equally and that there are no unnecessary interruptions to the Company’s business activities. The Board has a particular responsibility in ensuring that the shareholders have
sufficient information and time to assess the offer.
In the event of a take-over process, the Board shall ensure that:
- the Board will not seek to hinder or obstruct any takeover bid for the Company’s operations or shares unless there are particular reasons for doing so;
- the Board shall not undertake any actions intended to give shareholders or others an unreasonable advantage at the expense of other shareholders or the Company;
- the Board shall not institute measures with the intention of protecting the personal interests of its members at the expense of the interests of the shareholders; and
- the Board shall be aware of the particular duty it has for ensuring that the values and interests of the shareholders are protected.
In the event of a take-over bid, the Board will, in addition to complying with relevant legislation and regulations, seek to comply with the recommendations in the Norwegian Code of Practice for Corporate Governance. This includes obtaining a valuation from an independent expert. On this basis, the Board will make a recommendation as to whether or not the shareholders should accept the bid.