The Company remains focused on continuously developing its established principles on good corporate governance. The presentation of the Company’s corporate governance practice follows from the recommendations set out in the Norwegian Code of Practice for Corporate Governance (“NUES”), published in a revised version October 2014. The presentation below follows the same order of topics as the items in the said recommendations.
(All references in the text are made to the Annual report 2015)
1. Presentation of corporate governance
The Company’s principles on good corporate governance are based on the Norwegian Code of Practice for Corporate Governance (“NUES”) as adapted to the organisational structure that the Company is part of. The Company is focusing on a continuing development of these principles as a contributor towards the Company’s long term added value as well as towards the Company’s general responsibilities towards society.
Significant parameters in this process are transparency, integrity and responsibility. These basic principles also reflect the Company’s value base while they also identify the ethical guidelines governing the Company’s responsibility towards society and the Company’s behaviour in general.
Transparency points to confidence towards procedures and decision making and the way in which the various activities of the Company are executed. In this connection the Company’s policy on information is essential. Integrity is the resulting effect of the norms that characterize the Company and which contribute in securing a proper conduct of the Company’s affairs. Responsibility relates to clarity on consequences of acts or omissions.
The Shareholders’ Committee
The supervisory function of the Shareholders’ Committee constitutes an integral part of the Company’s conduct as to good Corporate Governance. It follows from the Company’s Articles of Association that the Shareholders’ Committee is responsible for exercising a supervisory function relative to the Company’s managerial functions. The way in which the Shareholders’ Committee execute these duties is belayed in the aforementioned Norwegian Code of Practice for Corporate Governance and equally follows established guidelines as adapted towards how the Company is organized. These guidelines i.a. address potential questions on conflict of interest. The Shareholders’ Committee is attending to the Company’s annual accounts and expresses its view to the General Assembly on the Board’s proposals on the annual accounts and hereunder proposals on dividends. The Shareholders’ Committee elects members to the Board, propose appointment of Auditor and also addresses the issue of compensation to Fred. Olsen & Co. for its managerial services towards the Company.
The Shareholders’ Committee consists of the following persons: Christian Fredrik Michelet (Chairman), Einar Harboe (Deputy Chairman), Aase Gudding Gresvig, Bård Mikkelsen and Jørgen Heje. All members of the Shareholders’ Committee are independent of the Board, the managerial functions for the Company as carried out by Fred. Olsen & Co. and the Company’s main shareholders.
The object clause of the Company as reflected in the Articles of Association reads as follows: “Bonheur ASA is a limited liability company with its registered office in Oslo. The company’s business is to engage in maritime and energy related activities, transportation, technology and property development, investments within finance and commerce, as well as participation in other enterprises”.
In line with the wording of the referenced object clause, the Company is engaged in a diversified business. The various business areas and their results are reflected in the Annual Reports. The Company and its subsidiaries and associated companies form the “Group of companies”.
3. Equity and dividends
The equity of the Company is addressed in parent company note 8. The Board considers that the current equity level is satisfactory taking into account the Company’s financial position relative to strategy and risk profile.
The Company has no current authority to increase its share capital, except as specially catered for under extraordinary general meeting in Bonheur ASA in connection with the ongoing merger process between the Company and Ganger Rolf ASA with Bonheur ASA as the surviving company. To the extent proposals will be made to the Annual General Meeting on authority to increase the share capital, caution will be exercised relative to the principle of preference for existing Shareholders on subscription for new shares. In the event the Board of the Company should request the Annual General Meeting for authority to increase the share capital or acquire treasury shares, such authority will in any event only be requested for a period of time limited to the next ordinary Annual General Meeting.
When considering dividend payments the Company takes into account the development of the Company’ results and otherwise its investment plans and financial position. Specific situations may arise where it would be in the interest of the Shareholders that dividends are not recommended or that extraordinary dividend payments are recommended. Dividend payments are considered by the Board which makes proposals for allocations to the General Assembly, subsequent to the Shareholders Committee having addressed these issues.
4. Equal treatment of shareholders and transactions with close associates
The Company only has one class of shares and each share equals one vote. The Company emphasizes the principle of equal treatment of all its Shareholders. The Company has not been engaged in other transactions with its Shareholders, Board members, Fred. Olsen & Co. in its managerial capacity or anyone related to these other than what follows from parent company Note 12 to the respective Annual Accounts or which may otherwise have been reported in separate announcements to Oslo Stock Exchange.
5. Freely negotiable shares
The Company’s shares are freely negotiable.
6. Annual general meetings
The Company’s Annual General Meeting is normally held in May each year under the conduct of the Chairman of the Shareholders’ Committee. The Company endeavours that the General Meetings are conducted in line with the aforesaid Norwegian Code of Practice for Corporate Governance.
The summons, together with the appurtenant papers, is distributed in good time in advance of the Meeting. Shareholders who are prevented from participating may vote by way of proxy. The Shareholders’ Committee, the Board and the Company’s auditor are all represented at the Annual General Meetings. The Annual General Meeting i.a. elects members to the Shareholders’ Committee.
7. Nomination committee
The Company has no separate nomination committee. However, it follows by the Articles of Association that the Shareholders’ Committee elects members to the Board.
8. Corporate assembly and board of directors – composition and independence
The Company does not have a corporate assembly. The supervisory function similar to a corporate assembly is executed by the Shareholders’ Committee.
9. The work of the board of directors
The ultimate administration of the Company’s business which implies securing that the Company’s business conduct is in line with the basic values of the Company rests with the Board. The Board at present consists of five Directors, who are all elected for a two-year period. In addition to exercising the authorities on decision-making and control functions, the Board focuses on development of the Company’s strategy. Emphasis is placed on providing the Board with good information as a basis for the Directors to adequately perform their duties. All matters considered of material importance to the Company are addressed by the Board. This i.a. comprises considering and approving quarterly and annual accounts, significant investment issues (hereunder acquisitions and divestments) and overall strategies. The composition of the Board reflects a broad level of competence.
The Board members Carol Bell, Helen Mahy and Andreas Mellbye are independent of the managerial functions for the Company as carried out by Fred. Olsen & Co. and of the Company’s main shareholders.
Emphasis is further placed on a clear distinction in responsibilities between Fred. Olsen & Co.’s managerial functions towards the Company and the Board. In Note 12 to the parent company accounts information on compensation to the Board is provided. The compensation to the Board is not depending on results and neither have the Directors been granted any options.
In its capacity as a preparatory and advisory working committee for the Company’s Board the Audit Committee, consisting of Helen Mahy and Nick Emery, will review the financial reporting process, the system of internal control and management of financial risks, the audit process, and the Company’s process for monitoring compliance with laws and regulations. In performing its duties, the Audit Committee will maintain effective working relationships with the Company’s Board, Fred. Olsen & Co. in its managerial functions towards the Company and the Company’s Auditor.
10. Risk management and internal control
The Group of companies’ risk management is developed to ensure that risk evaluation is a fundamental aspect of all business activities. Continuous evaluation of exposure to risk is essential to identifying and assessing risk at all levels.
The Group of companies’ risk management policies work to identify, evaluate and manage risk factors that affect the performance of all business activities. As such, continuous and systematic processes are employed to mitigate potential damages and losses and to capitalize on business opportunities. These policies contribute to the success of both long and short-term strategies.
Risk management is based on the principle that risk evaluation extends to all business activities. The Group of companies has procedures for identifying, assessing, managing and monitoring primary risk exposures. As part of the cash management policy, the Group of companies may employ the use of derivative instruments such as interest rate swaps and currency contracts to reduce exposure to risk.
The Group of companies’ risk management and internal control procedures are reviewed by the Audit Committee in accordance with its charter. The operational risk management and internal control are carried out within each business segment in accordance with the nature of the operations and the government legislation in the relevant jurisdiction. Financial risk management related to foreign exchange, interest rate management and short-term investments is handled in accordance with established policies and procedures.
The Company does not have a distinct formal internal audit function as part of its internal control system. Instead, the Company works closely with the external auditor to ensure that risks and controls are monitored. Through regular board meetings in the underlying companies, the Company monitors the development of the operational companies, focusing on operations, market conditions, competitive situation and strategic issues. These board meetings generate valuable information and create a solid foundation for the Company’s assessment of its overall financial and operational risk. Board meetings are held at least once every quarter and otherwise when important business matters are to be dealt with.
Selected companies are subjected to an internal, risk based evaluation of internal controls to ensure procedures are in place to mitigate risks and to ensure that these controls function as intended. Follow-up reports are prepared as a result of these evaluations to ensure continuous improvement of controls implemented.
11. Board remuneration
Board remuneration reflects the board’s responsibility, expertise, time spent, and the complexity of the business. Remuneration does not depend on the Company’s financial performance. There are no option programs for any director. The annual general meeting determines board remuneration after considering recommendations by the Shareholders’ Committee. Additional information on remuneration paid to directors for 2015 is presented in note 29 to the consolidated accounts.
12. Remuneration of executive management
Anette S. Olsen has assumed the task as Managing Director of the Company as part of Fred. Olsen & Co.’s overall managerial functions towards the Company. Anette S. Olsen is the sole proprietor of Fred. Olsen & Co. which is providing services within the areas of finance, legal, accounting and general administration to the Company. The compensation to Fred. Olsen & Co. for these services, follow under parent company note 12. The Company has no employees. There are no stock option programs in the Company or in Fred. Olsen & Co.
13. Information and communications
Emphasis is placed on conducting a policy on information which aims at providing the market with relevant and timely information in a way that supports the principle of equal treatment of all of the Company’s shareholders. The Company provides presentations to shareholders and analysts in connection with announcement of the quarterly results. Annual and quarterly reports, together with the aforementioned presentations, are made available on the Company’s web site, www.bonheur.net. The Company has preparedness on information for situations of an extraordinary character.
Privately held Fred. Olsen related holding companies controls a total of 52.08 percent of Bonheur ASA stock. Based on the aforementioned, the Company considers that the Code’s takeover guidelines recommendation is not currently relevant. Following the proposed merger with Ganger Rolf ASA, approved in the extraordinary general meeting held on 16 March 2016, these Fred. Olsen related shareholders will own about 51.4 % of Bonheur ASA (the surviving company).
The Company’s Auditor is annually providing an activity plan for the audit of the Company. As part of the established routines within the Company on Corporate Governance the Auditor is conducting presentations to the Audit Committee and the Shareholders’ Committee on the auditing carried out and the auditor is hereunder addressing the Company’s risks, internal control and quality on reporting. The Auditor is conducting a similar presentation to the Board in connection with the Board considering the Annual Accounts.
In connection with the Auditor’s report the Auditor also provides an affirmation on his independency and objectivity. The Auditor participates at the Ordinary Annual General Meeting. In connection with the issue on compensation to the Auditor it will always be identified how this compensation is split between statutory auditing on the one side and other tasks on the other.