Corporate governance

Bonheur ASA (the Company) remains focused on continuously developing its established principles on good corporate governance. The Company’s corporate governance practice is adapted to the recommendations set out in the Norwegian Code of Practice for Corporate Governance (“NUES”), as published in the latest revised version of 17 October 2018.

1. Presentation of Corporate Governance
The principles for good corporate governance set out in NUES are applied to the organisational structure that the Company is part of. The Company is focusing on a continuing development of these principles as contributors towards the Company’s strive for long term added value as well as towards the responsibilities owed to the society.
 
Significant parameters in this process are transparency, integrity and responsibility. These basic parameters also reflect the Company’s value base while they also identify the ethical guidelines governing the Company’s responsibility towards the society and the Company’s behaviour in general.
 
Transparency points to confidence in 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 assist 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 element of the Company’s 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 administration of the Company by the Board and Fred. Olsen & Co. The way in which the Shareholders’ Committee execute these duties is adapted to NUES and equally follows established guidelines as calibrated against the corporate structure that the Company is part of. These guidelines i.a. address questions on potential conflict of interest. The Shareholders’ Committee is attending to the Company’s annual accounts and expresses its view thereon to the Annual General Meeting, hereunder on the Board’s proposals on dividends. The Shareholders’ Committee elects members to the Board subject to distinct nomination procedures, propose appointment of the Auditor and also provide recommendation to the Board on compensation and possible bonus to Fred. Olsen & Co. for its day-to-day management of the Company.
 
The Shareholders’ Committee consists of the following persons: Christian Fredrik Michelet (Chairman), Einar Harboe (Deputy Chairman), Ole Kristian Aabø-Evensen, Bård Mikkelsen and Jørgen Heje. At the Annual General Meeting in May 2018, Ole Kristian Aabø-Evensen was elected as member of the Shareholders’ Committee. All members of the Shareholders’ Committee are independent of the Board and the day-to-day management of the Company as carried out by Fred. Olsen & Co.
 
2. Business
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 this object clause, the Company is invested in a diversified business portfolio. These various business areas and their results are reflected in the Annual Reports. The Company and its subsidiaries and associated companies hereunder form the “Group of companies”.
 
3. Equity and dividends
Equity
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. To the extent proposals will be made to a 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 a 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.
 
Dividend
When considering dividend payments, the Company takes into account the development of the Company’ results together with the prevailing investment plans and the Company’s financial position in general. Specific situations may arise where it would be in the interest of the Shareholders that dividend payments are not recommended or - otherwise, that extraordinary dividend payments are recommended. Dividend payments are considered by the Board, which then resolves on proposals to the General Meeting subsequent to the Shareholders’ Committee having addressed this issue and formed its view.
 
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  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 group of companies’ note 26 to the respective Annual Accounts or as may otherwise have been reported in separate announcements to Oslo Stock Exchange.
 
5. Freely negotiable shares
The Company’s shares are traded 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 paying due account to NUES.
 
The summons, together with the appurtenant papers, is distributed in ample time in advance of the General 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 from the Articles of Association that the Shareholders’ Committee elects members to the Board and, as also set out above, does so in accordance with its own nomination procedure.
 
8. Corporate Assembly and Board of Directors – composition and independence
The Company does not have a Corporate Assembly. A supervisory function similar to that of a Corporate Assembly, is exercised by the Shareholders’ Committee.
 
9. The conduct 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 each 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 discharge their duties. All matters considered of material importance to the Company are placed before 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 Company has the following Board Members:
Thomas Fredrik Olsen (Fred. Olsen) (b. 1929), Chairman. Mr. Olsen has been chairman of the Board since 1955.
 
Helen M. Mahy (b. 1961) has been a member of the Board since 2013.
 
Carol Bell (b. 1958) has been a member of the Board since 2014.
 
Nicholas (Nick) A. Emery (b. 1961) has been a member of the Board since 2014.
 
Andreas C. Mellbye (b. 1955) has been a member of the Board since 2001 and before that he served as an alternate.
 
All Board members participate regularly in the Company’s board meetings.  Lawful absence are exceptional and always distinctly justified.
 
The Board members Carol Bell, Helen Mahy and Andreas Mellbye are independent of the managerial functions of the Company as carried out by Fred. Olsen & Co. and of the Company’s main shareholders.
 
In Note 7 to the group of companies’ 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.
 
Audit Committee
In its capacity as a preparatory and advisory working committee for the Company’s Board, the Audit Committee - consisting of the Board
 
Members Helen Mahy and Nick Emery - will review the financial reporting process, the system of internal control and management of financial risks, the auditing process, and the Company’s process for monitoring compliance with laws and regulations. In performing these duties, the Audit Committee will maintain effective working relationships with the Company’s Board, Fred. Olsen & Co. and the Company’s Auditor.
 
10. Risk management and internal control
The Group of companies’ risk managements, as developed within each of the business segments, are developed so as 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 risks at all levels.
 
The Group of companies’ risk management policies work to identify, evaluate and manage risk factors that affect the performance of the various 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 individual business segments within the Group of companies have procedures for identifying, assessing, managing and monitoring primary risk exposures. As part of cash management policy, the Group of companies may individually deploy derivative instruments, such as interest rate swaps and currency contracts in order to reduce exposures.
 
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 governing legislation in the relevant jurisdictions. 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 operate 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. Consequent on board meetings in subsidiaries, the Company through Fred. Olsen & Co. is able to adequately follow developments within the relevant operational subsidiaries, focusing on business performance, market conditions, competition situation and strategic issues. The resulting effect of these board meetings in subsidiaries thus in turn provide a solid foundation for the Company’s assessment of its overall financial and operational risks.
 
11. Board remuneration
Board remuneration reflects the Board’s responsibility, expertise, time spent, and the complexity of the business. The remuneration does not depend on the Company’s financial performance. There are no option programs for any Board Member. The Annual General Meeting determines the remuneration to the Board Members. Additional information on remuneration paid to Board members  for 2018 is presented in note 26 to the consolidated accounts.
 
12. Remuneration of executive management
As an integral part of Fred. Olsen & Co.’s day-to-day management of the Company, Anette S. Olsen holds the position as Managing Director of the Company. Anette S. Olsen is the sole proprietor of
 
Fred. Olsen & Co., which provides services within the areas of IT, finance, legal, accounting and general administration to the Company. The compensation to Fred. Olsen & Co. for these services follow under group of companies’ note 26.  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.no. The Company has a preparedness on information for situations of an extraordinary character.
 
14. Takeovers
Privately owned Fred. Olsen-related companies hold a total of 51.4 percent of the Company’s shares. Considering the corporate structure of which the Company forms parts, the Company considers that the Code’s takeover guidelines recommendation is currently not relevant.
15. Auditor
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 independency and objectivity. The Auditor participates at the Annual General Meeting. The Board is satisfied that Fred. Olsen & Co. on behalf of the Company and at its sound discretion, when considered both generally and specifically serviceable by Fred. Olsen & Co., may deploy the Auditor for services beyond statutory auditing. In connection with the issue on compensation to the Auditor, it must and will however always be identified how such compensation is split between statutory auditing on the one side and other services on the other.