Corporate Govenance Policy
A revised edition of the Norwegian national code of practice for corporate governance was issued on 28 November 2006. The code is intended to strengthen confidence in listed companies and thereby contribute to the greatest possible value creation over time to the benefit of shareholders, employees and other stakeholders.
Compliance with the code follows an “observe or explain” principle. If the code is not observed, the company must explain why it has chosen a different solution. The code comprises 14 main points, and ODIM’s operations largely conform with these. The full code is available on the Oslo Stock Exchange website at www.ose.no. A brief point-by-point outline of the company’s observance of the code is provided below.
1. Report on corporate governance
The code is observed through regular board meetings, regular monitoring of operations, and presentations in annual reports and other information.
2. Business
The code is observed through the company’s articles of association and annual report. The description of the business is also available on the company’s website.
3. Equity and dividends
Book equity for the group at 31 December 2006 was NOK 241.8 million, corresponding to an equity ratio of 36.3 percent. ODIM regards the group’s present capital structure as appropriate and tailored to its goals, strategy and risk profile. The company’s objective is to provide its shareholders with a competitive return based on long-term growth in earnings. The company will pay dividend in relation to its earnings, financial position, liquidity requirements and other financial considerations.
4. Equal treatment of shareholders and transactions with close associates
The code is observed. In the event of not- insignificant transactions between the company and its shareholders, directors and senior executives or their close associates, the board will ensure that the transaction is conducted at arm’s length. When required, external and independent players will be involved in verification.
5. Free negotiability
The code is observed.
6. General meeting
The code is observed, with the clarification that the chair of the meeting will normally be designated in advance and named in the notice of the meeting. The company’s goal is that the notice, with detailed documentation for items on the agenda, will be sent to shareholders at least two weeks before the general meeting takes place. The minutes of a general meeting will be published as soon as is practical, through the Oslo Stock Exchange’s reporting system at www.newsweb. no (ticker code: ODIM) and on the company’s own website at www.odim.com.
7. Nomination committee
The company has no nomination committee, but the general meeting will evaluate this from year to year.
8. Corporate assembly and board of directors: composition and independence
The company has no corporate assembly. For 2007, agreement has been reached between the companies in the group and the employees on not having a corporate assembly. Instead, the employees will have the opportunity to be represented by three worker directors on the board of ODIM ASA. An application has been submitted to the government-appointed Industrial Democracy Board for acceptance of this arrangement pursuant to section 5 of the regulations on employee representation. The company aims to have this in place by the annual general meeting in May 2007.
9. Work of the board of directors
The code is observed. The board has adopted instructions to regulate the division of responsibilities, duties and roles between the board, its chair and the chief executive.
10. Risk management and internal control
ODIM has established an extensive set of internal procedures and systems to ensure unified and reliable financial reporting. Monthly reports are prepared to present financial results from all the companies in the group.
11. Remuneration of the board of directors
The code is observed as specified in the presentation in this annual report. The general meeting determines the remuneration of directors.
12. Remuneration of the executive management
The code is observed. Corporate guidelines for remuneration of the executive management are described in note 20 to the accounts on remuneration of senior executives and the auditor.
13. Information and communication
The code is observed. The company has established an investor relations policy, and its reporting of financial and other information will be based on openness and equal treatment of players.
14. Takeovers
The code is observed, but with the specification that this has not been relevant for the company.
15. Auditor
The code is observed, except that no specific guidelines have been established on the ability of the executive management to use the auditor for services other than auditing.