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Corporate governance

Solvang attaches importance to good corporate governance. There is a good relationship between the owners, Board and management, and all three parties have a desire and a stated goal to comply with any significant requirements stipulated by the Corporate Governance Code.
 

General

Solvang shall conduct operations that are commercially sound and beneficial to the owners, employees, customers and suppliers. The operations shall be conducted in accordance with clear ethical guidelines and with a focus on the impact on the environment and society as a whole.
 

Operations

The operations are described in the company’s articles of association as being shipping, shipowning operations and real estate. The company is currently concentrating entirely on shipowning operations and shipping. 
 

Company capital and dividends

Shipping is a cyclical industry that requires the company to be adequately capitalised with regard to equity and liquidity. This is reflected in the company’s balance sheet structure. The company aims to have a stable and predictable dividend policy. This means that the dividends shall reflect the profit for the year, but dividends have also been paid during years with less earnings. The board also has to consider the market outlook, committed capital expenditures, and potential counter cyclical investments that may arise. Dividends in later years take into account all of these considerations, and for 2016 the board proposes not to pay dividends.
 

Equal treatment of shareholders and transactions with related parties

The Company has only one class of share, with the same voting right for all shares. Transactions with related parties take place in accordance with the guidelines set by the code. There are also parallel investments with companies controlled by the Steensland family. All transactions are carried out on market terms.
 
The Board of Directors has been granted a power of attorney by the General Meeting to increase the share capital by a maximum of 4 million shares. This power of attorney is valid for 12 months and has not yet been utilised.
 
The board has been granted a power of attorney to buy own shares of up to 10% of the share capital. As of today the company own 107,062 own shares which correspond to 0.43% of the share capital.
 
The board has also been granted a power of attorney to approve the distribution of dividends on the basis of the financial statements for 2015. The power of attorney is valid until the Annual General Meeting in 2017, and has not been used.
 

Free negotiability

The shares are freely negotiable, and Board approval is not required for the acquisition of shares. 
 

General Meeting

The General Meeting is called and held in accordance with the company’s articles of association. The Auditor and Chairman of the Board attend the General Meeting. Ample time shall be allowed for holding the General Meeting and for discussion.
 

Nominating Committee

More than 65% of the share capital is represented by the company’s Board of Directors. It is therefore not deemed necessary to establish a separate nominating committee.
 

Board of Directors, composition and independence

The Board plays an important role as a link and as a control function between the shareholders and the company’s management. The board members are elected for a term of one year at a time. The General Meeting also elects the Chairman of the Board. The Board also acts as the audit committee.

Some of the board members have shares in the company. These are shares that have been acquired at market price. The Board is remunerated through a fixed directors’ fee.

The Board’s composition reflects the ownership structure and the need for a broad range of expertise in shipping, finance, and HSE. 
 

Work of the Board

The work of the Board and its meeting schedule is established once a year for the next 12-month period. The meetings include regular reporting and discussion in all relevant areas, including safety, quality, technical operations and finance. At least once a year, the company’s Auditor participates in a board meeting at which feedback is given on the company’s internal control, among other things.
 

Risk management and internal control

An important element in the company’s risk management and internal control is an open and systematic dialogue between the Board and the management. A detailed review of the company’s financial and operational position is carried out by the Board before presenting any quarterly report. 

In general, there is a good dialogue between the Board and the management. No changes to the business plan or significant investments are made without prior discussion and approval by the Board.
 

Remuneration of the Board

The principles for remuneration of the Board and the management have remained unchanged for a long period of time. None of the Board’s members have any additional duties for the company. The Board has not been allocated options in the company.
 

Remuneration of executive management

The company’s senior executives are employed on a fixed salary. No options or fixed bonuses are linked to salary agreements. Details of the remuneration of the Board and senior executives are given in Note 10 to the consolidated accounts and Note 8 to the annual accounts for Solvang ASA.
 
For several years, the company has had a programme for the sale of shares to employees, most recently at the start of 2017. Each employee has had an opportunity to purchase shares worth up to a maximum of NOK 30,000 at a 20% discount.
 

Information and communication

The company attaches great importance to ensuring that all shareholders and the market in general receive accurate and detailed information simultaneously and at the right time. The reports are published and distributed relatively soon after the end of each quarter and year. The company will only publish the annual report and quarterly reports on the Internet. 
 

Corporate takeovers

As mentioned in Section 6.5, the company’s shares are freely negotiable. In the event of a bid for the company, the Board will strive to provide the company’s shareholders with accurate and timely information, as well as adequate time to evaluate the bid. If the situation so requires, the Board will seek an independent valuation to assess the value of the bid submitted.
 

Auditor

Each year, the Auditor presents a plan for the auditing work and reports the results of the audit that has been conducted. The Board summons the Auditor to board meetings at which significant accounting matters are to be discussed. This normally occurs once or twice a year. Information on the Auditor’s remuneration, broken down by auditing and other work, is presented in the company’s annual report and submitted to the General Meeting for approval.

One meeting is held each year between the Auditor and the Board without the presence of the management.