| Corporate governance |
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Activities The company’s objective is the operation of quality assurance and production of farmed fish and other farmed seafood products, and to distribute such farmed products and undertake any related activities, including participation in other companies with associated activities. We strongly believe that each individual company and the local community benefits from operations based on local decision making and local management and ownership. The following key strategies have been adopted by the board:
Company capital and dividends The company’s share capital is NOK 36,288,408 divided by 36,288,408 shares each with a nominal value of NOK 1.00, fully paid and assigned by name. The company’s shares are registered with the Norwegian Central Securities Depository (VPS). As of 31.12.2008, NRS had an equity ratio of 38.8%. The equity ratio is adjusted to suit the company’s aims, strategy and risk profile. The company aims for dividend payouts to reflect the shareholders’ desire for competitive returns. Dividends should remain stable over time and account for 30–40% of profits after taxation, provided the company’s own capital needs have been met. Equal treatment of shareholders and free trading It is the company’s policy to treat all shareholders equally. The company’s shares are freely traded and there are no restrictions on the purchase and sale of shares, other than those dictated by Norwegian law. Share purchases must be approved by the board and voting rights for transferred shares may be exercised no earlier than four weeks after the transfer has been registered with VPS. All shares belong to the same class and each share has one vote at the company’s general assembly. General assembly The ordinary general assembly is held no later than six months after the end of the previous financial year. All shareholders receive a written invitation to the general meeting and motions and necessary background information are issued to the shareholders no later than eight days before the proposed general assembly. Shareholders who are unable to attend may vote by proxy. Shareholders wanting to attend the general assembly or vote by proxy must notify the company in writing and, where appropriate, submit a named proxy declaration to the company no later than three days before the general assembly. The Chairman of the board of Directors, CEO, CFO and the company’s financial auditor all attend the ordinary general assembly. Election committee The election committee prepares the elections to be held at the general assembly. The company’s election committee comprises three members elected by the general assembly for one year at a time. The election committee shall put nominations to the general meeting for the election of board directors and deputy board directors. The nominations must be substantiated. The 2008 election committee comprises Hans Petter Meland (chair), James Stowe Lorentzen and Lars Magne Eidesvik. The election committee determines remuneration for directors of the board and for members of committees established by the board. Corporate assembly and board of directors – composition and independence Because NRS employs less than 200 employees, NRS does not have a corporate assembly. The company board is designed to look after the interests of all shareholders and to meet the company's need for expertise, capacity and diversity. The board adopts an annual budget and makes the decisions necessary for the company’s operations. The board’s duties The board comprises six members with voting rights elected by the general assembly. The deputy members are also elected in numerical order. They will join the board in the order they were elected. The chairman of the board is especially elected by the general meeting. Each year the board elects a deputy chairman. The chairman of the board is female, while the remaining board members are males. To ensure the continuity of the board, members are elected for a period of two years. Each year, half of the board members must stand for reelection. The NRS board is the ultimate authority and has overall responsibility for the management of the company. Between 6 and 9 board meetings are held each year. The directors of the board and their areas of expertise are described in a separate section. The board appoints the company’s CEO. Risk management and internal controls Effective management with focus on risk and good internal controls are key criteria for success in NRS and are an integral part of the business. The ability to plan, structure, execute and evaluate projects is an important part of the business. The company is managed according to set financial targets. Reporting takes place on a monthly basis and covers both financial and non-financial parameters. The company’s focus on profitability and risk extends to each area of business. The company emphasizes the need to follow up results and take necessary measures where insufficient progress has been made. The purpose of risk management and internal controls is to handle the risks associated with the business and to strengthen the quality of the financial reporting. Effective risk management and proper internal controls help protect the shareholders’ investment and the company’s assets. The board believes that NRS has proper internal controls in place, along with risk management, that are tailored to suit the business. Remuneration for board members Remuneration is not related to financial performance. No options have been issued to members of the board. The remuneration is determined by the election committee. Further information about directors’ remuneration can be found in the notes to the annual financial statements. All board members own shares in the company – see note. Remuneration for key employees Remuneration for the CEO is determined by the board. The remuneration comprises a fixed salary and a variable payment (bonus), which is dependent on reaching set targets. Information about remuneration for key employees can be found in the notes to the financial statements. Information and communication NRS will ensure that all shareholders receive accurate, clear, relevant and timely information about issues of financial importance to them. Financial information is published on NRS’ website and in press releases. The quarterly reports are published in both Norwegian and English. Company takeover In the event of a takeover bid, the board shall not attempt to prevent or impede any bid for the company’s business or shares unless there are particular reasons for doing so. If a bid has been made for the company’s shares, the company board shall not use its authority to carry out a share issue or implement other measures with the aim of preventing the bid from being executed unless such action has been approved by the general assembly after the bid is made known. If a bid is made for the company’s shares, the board will issue a statement with an evaluation of the offer and a recommendation to shareholders as to whether or not they should accept the offer. The statement will make it clear whether the evaluation was unanimous. Financial auditor The financial auditor attends board meetings where the annual financial statements are debated. Each year the accountant presents the board with an outline of the audit of the company. The board informs the ordinary general assembly about the auditor’s remuneration. The auditor’s remuneration is listed in the notes of the financial statement of the company. |
The basis for good corporate governance is a clear and unambiguous relationship between owners, board and management. Good corporate governance generates credibility and confidence on the part of everyone involved and provides a sound basis for value creation and profitability. Good corporate governance and management is important to Norway Royal Salmon (NRS), and the company’s guidelines effectively correspond to the Norwegian Code of Practice for Corporate Governance.
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