Select country1. Corporate governance
In order to succeed, every company is dependent on its good relations with interested parties. For Norman, this is also a decisive success factor. A good reputation and positive economic development are fundamental if trust is to be established and maintained with important target groups. This requires the company to have open and honest communications and equal treatment of company shareholders. Norman emphasizes independence and neutrality in all matters between the board, the management and the owners. The principles of independence, neutrality and normal business practice also apply in respect of dealing with other interested parties such as customers, suppliers, banks and other business relations.
2. Business
Norman ASA is one of the world’s leading companies within the field of data security. The company develops and sells security products and services. The headquarters is located at Lysaker, outside Oslo, Norway. The company’s Articles of Association states the following in § 3:
“The Company's business objective is to operate within the business areas of import, development and sale of IT software, and import and sale of IT hardware and to provide related consultancy services, and further to engage in other businesses of interest, included participation in other companies.”
3. Equity and dividends
Norman will endeavor to finance its activities using its own equity, and has no interest-bearing debt. Norman ASA has equity coverage of 57% in the parent company and 7% in the Group. Norman will at all times ensure that it has a strong balance sheet with a sufficiently high equity. Norman aims to pay a dividend each year. In evaluating the size of the dividend, the board will consider the dividend capacity of the company, the requirements of maintaining a responsible level of equity and the need for sufficient financial resources for future growth. According to the Norwegian public limited liability Companies’ Act, the basis for determining the dividend capacity is the equity available for distribution (“free” equity) in the parent company Norman ASA.
4. Equal treatment of shareholders and transactions with close associates
The company has only one class of shares. Transactions in the company’s own shares (share buy-back) are carried out through the Oslo Stock Exchange at prevailing stock exchange prices. The company emphasizes equal treatment of shareholders when it comes to price sensitive information. Norman ASA is listed on the Oslo Stock Exchange and is therefore obliged to follow all relevant information requirements. The company publishes all price sensitive information to the stock market through its information system and also on the company’s web site at www.norman.com.
5. Freely negotiable shares
Norman has the aim of ensuring that all shareholders have the same rights. Norman has one class of shares, and each share qualifies for one vote at the shareholders’ meeting. All shares are publicly traded and there are no trade barriers. All Norman’s shareholders are entitled to the same dividend payments, and have equal rights in the event of share capital increases (unless waived by the general meeting).
6. General meetings
The company’s shareholder meetings are open for all shareholders, and all shares have the same voting rights. All shareholders can be represented either in person or through a power of attorney. It is not possible to participate and/or vote through the Internet. There are no ownership limitations and no known shareholder agreements. The notice of shareholder meeting will be sent out with 14 days prior notice, in accordance with the law. Minutes of general meetings are made available through the stock exchange information system and on the company’s web site.
7. Nomination committee
The board of directors has established a committee to oversee the selection, proposal and compensation of board members. The company’s Articles of Association states the following in § 6:
“The Company shall have an election committee comprising two to three members. The election committee members shall be elected by the General Meeting. The period of service for the members of the election committee shall be from one to two years, in accordance with the decision of the General Meeting. The tasks of the election committee shall be to make proposals to the General Meeting for the election of shareholder-elected members and deputy members to the Board. The election committee shall make its proposals known to the Chairman of the Board at least two weeks before the General Meeting is held.”
The members of this committee are not members of the board of directors or the company’s executive management. Members of this committee are Trine Sellæg Aulie and Arthur Olafsen.
8. Corporate assembly and board of directors: composition and independence
Norman ASA does not have a corporate assembly. Norman aims to ensure a balanced composition of the board taking into account the competence, experience and relevant background of the individuals. It is also desirable that the structure of the board of directors reflects both the ownership of the company as well as the need for neutral, independent representation without specific shareholder affiliation. The company management is not represented on the board and none of the shareholder-elected board members have previously been employees of the company. There are no personal relationships either to the chief executive officer or to other key employees. There are no performance based fees to the board, and the board members have only limited
participation in option programs.
9. The work of the board of directors
The board of directors receives each week a sales report for the Group with geographical breakdown, and in addition receives each month a complete set of financial statements together with a management report describing the development of the business for the previous month. In extended board meetings that take place once a year, the company strategy is presented to the board and discussed.
10. Risk management and internal control
Risk management and internal control is performed through various processes within the Group, both on a board level and in daily management of the company. The board of directors performs risk management and internal control through board meetings. Each month the board of directors receives a board report from management outlining the financial and operational performance of the company. An annual planning and budgeting process which ends with a budget approved by the board sets the framework for the coming year. In this process, the board carries out a review of the company’s most important areas of exposure to risk. Annually, the board approves a proposal for the annual report and dividend payment to the general meeting.
Risk management and internal control on a management level is carried out through monthly reviews of financial performance. A quarterly business review is performed with each subsidiary manager. Financial risk management and internal control procedures are carried out both on a group level and in each subsidiary. The company has established financial control guidelines and procedures for this purpose.
11. Remuneration of the board of directors
Remuneration to the board members is at a sufficiently competitive level in order to ensure the desired composition of the board. The board comprises five shareholder-elected members, who are elected on a two-yearly basis by the general meeting and two representatives from the employees. Details of remuneration to the board for 2007 are described in the notes to the financial statements.
12. Remuneration of the executive management
A remuneration committee to oversee the compensation of the President & CEO of Norman ASA is established, and this committee comprises Svein Ramsay Goli and Alexander Maria Paiusco. Remuneration of the executive management is based on a fixed and a variable element. The variable element is based on performance compared to budget for revenues and results for the Norman Group. The remuneration guidelines for executive management are disclosed in the board of directors’ report and details of remuneration to executive management and the board of directors are disclosed in the notes to the financial statements.
13. Information and communications
The company endeavors to give accurate and sufficiently extensive information each quarter and publish this information as quickly as possible. The company has ceased to give concrete guidance on future revenue and results. Prompt reporting of financial results reduces the risk of leakage and contributes to the equal treatment of shareholders.
Norman sees it as important to retain a good dialogue with the shareholders and the market with regard to the company’s financial position and development. The company will ensure that all relevant information is accessible for the market. Information will be given shareholders and other parties in the market simultaneously and with the most efficient methods.
Responsibility for investor relations and price sensitive information rests with the company’s chief executive officer (CEO) and chief financial officer (CFO). In meetings with shareholders, analysts and others, special emphasis is given to not discussing issues that are considered to be price sensitive. In 2004, Norman applied for and qualified for using the Oslo Stock Exchange Information Symbol and the English Symbol. In order to qualify for the Information Symbol the company must have sufficient information accessible on the Internet, have sufficient presentations and satisfy certain requirements with regards to swiftness of reporting within the year. All information released to qualify for the Information Symbol must be made available in English to qualify for and to retain the right to use the English Symbol.
14. Take-overs
The board’s primary objective is to give the best possible dividends and long term return on investment for the shareholders. Unless specific conditions apply, the board will not prevent or make obstacles in the event that a bid is made for the company or its shares. In such situations, the board will evaluate the offer(s) and make a statement which is communicated to the shareholders. A decision is made through a general meeting.
15. Auditor
Norman uses the same firm of auditors in the parent company and all subsidiaries of significance. The auditors are also used as advisors for financial due diligence in connection with the acquisition of new businesses and in connection with the preparation of tax returns and tax advice in general. The auditors are not used as advisors for strategic issues or in connection with operational tasks for the company. Only the CFO and CEO are able to approve non-audit related assignments. The auditors participate in the board meeting that approves the annual financial statements, and in the same meeting will give its opinions as to the company’s accounting principles, risk areas, internal controls and accounting routines. The audit fees are approved at the annual general meeting and are described in the notes to the financial statements.