Corporate governance

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.

Bonheur ASA (the Company) remains focused on continuously developing its established principles on good corporate governance. The Company’s corporate governance practice follows the recommendations set out in the Norwegian Code of Practice for Corporate Governance (“NUES”), as published in the latest revised version of 30 October 2014.

 

1. Presentation of Corporate Governance

The principles for good corporate governance set out in NUES are adapted to the organisational structure that the Company forms 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 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 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 Board’s and Fred. Olsen & Co.’s managerial functions. The way in which the Shareholders’ Committee execute these duties is belayed in NUES and equally follows established guidelines as calibrated against how the Company is organized. 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 regarding the Board’s proposals on dividends. The Shareholders’ Committee elects members to the Board, 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 2017, 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 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

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 and otherwise its investment plans and financial position. Specific situations may arise where it would be in the interest of the Shareholders that dividend payments are not recommended or that extraordinary dividend payments are recommended. Dividend payments are considered by the Board, which eventually makes proposals for allocations to the General Meeting subsequent to the Shareholders’ Committee having addressed this issue.

 

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 parent company Note 12 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 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 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.

 

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 member of the Board since 2014.

 

Nicholas (Nick) A. Emery (b. 1961) has been member of the Board since 2014.

 

Andreas C. Mellbye (b. 1955) has been a member of the Board since 2001 and before that served as 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 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.

 

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. 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 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 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.

 

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 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. By virtue of board meetings in the underlying companies, the Company through Fred. Olsen & Co. monitors the development of the operational companies, focusing on business performance, market conditions, competition 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.

 

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 Board member. The Annual General Meeting determines remuneration to the Board members. Additional information on remuneration paid to Board members  for 2017 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 is providing 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 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.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 Bonheur ASA’s stock. Based on the aforementioned, 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. 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.