Odfjell SE which is the parent company in the Odfjell Group of companies is established and registered in Norway and is governed by Norwegian law, including laws and regulations pertaining to companies and securities. The Group has the objective of complying with all relevant laws and regulations in all jurisdictions it operates in, as well as the Code of Practice for Corporate Governance issued by the Norwegian Corporate Governance Board (NUES) on 23 October 2012 (the ‘Code of Practice’).
The Company’s Board of Directors has on 13 February 2013 approved Corporate Governance Policy as the Company’s policy for sound corporate governance in accordance with the Code of Practice. As an extension of this objective, the Board has also approved instructions for the Board of Directors and Management as well as regulations for insider trading in the Odfjell shares. This statement is compliance with the Corporate Governance Policy approved by the Board of Directors.
The Company is a SE company (Societas Europaea) subject to the Norwegian Act no. 14 of 1 April 2005 relating to European companies. The Company is listed on the Oslo Stock Exchange, and is thus subject to Norwegian securities legislation and stock exchange regulations.
In connection with this, the Company is subject to the requirements for good corporate governance which follow from the Public Limited Companies Act of 1997, the Securities Trading Act of 2007 and the Stock Exchange Act of 2007.
Reporting on corporate governance
The framework for corporate governance is the Norwegian Code of Practice for Corporate Governance of 23 October 2012. The Code is based on a ‘comply or explain’ principle,
which means that possible deviations from the Code shall be explained.
Odfjell is committed to ethical business practices, honesty, fair dealing and compliance with all laws and regulations affecting our business. This includes adherence to high standards of corporate governance. Odfjell's corporate social responsibility policy also encompasses a strong focus on quality, health, safety and care for the environment as well as human rights, non-discrimination and anti-corruption. The Company has its own Corporate Code of Conduct that addresses several of these issues. All Odfjell employees are obliged to comply with the Code of Conduct.
The following describes Odfjell's compliance procedures in respect of each of the elements of the Norwegian Code of Practice for Corporate Governance, including explanation of any deviations.
The Company's Business
Article 3 of Odfjell's Articles of Association states:
The object of the Company is to engage in shipping, ship agency, tank terminals, real estate, finance and trading activities, including the transportation of freight in the Company’s own vessels or chartered vessels, the conclusion
of freight contracts, co-ownership agreements and cooperation agreements, ownership and operation of tank terminals, as well as investment and participation in other enterprises with a similar object and other activities related thereto.
The other articles may be found on www.odfjell.com. The Company's Mission Statement and strategy can be found on page 3 and 5 of the Annual Report.
Equity and dividends
Odfjell shall maintain an equity base deemed sufficient to support the Company's objectives and strategy, and able to withstand a prolonged period of adverse market conditions. The normal target is that the equity ratio shall remain between 30 and 35 per cent of total assets. The Group had book equity of USD 948 million as of 31 December 2012 which corresponds to an equity ratio of 36.9%.
There are no outstanding Subscription rights as of 31December 2012.
Odfjell aims to provide competitive long-term return on the investments for its shareholders. The Company embraces an investor-friendly dividend policy based on financial performance, current capital expenditure programmes and tax positions. The Company's goal is to provide for semi-annual dividend payments.
Mandates granted to the Board of Directors
According to the Norwegian Code of Practice for Corporate Governance mandates granted to the Board of Directors to increase the Company’s share capital is restricted to defined purposes. The mandates granted to the Board are also limited in time to no later than the date of the next Annual General Meeting.
Power of Attorney to the Board of Directors
The Board has not been assigned authority to issue new shares. Any such mandate must be approved by the General Meeting and shall be limited in time until the next Annual
Power of Attorney to acquire own shares
The Extraordinary General Meeting of 2 October 2012 authorised the Board of Directors to acquire treasury shares with total nominal value of NOK 43,384,474. However, the Company may not at any time own more than 10% own shares. The minimum and maximum price
that is payable for the shares is respectively NOK 2.5 and NOK 250. This authorization expires on 2 April 2014.
Share option scheme
No option scheme has been established. Share option schemes shall be approved by the General Meeting.
Equal treatment of shareholders and transactions with closely related parties
Class of shares
The Company’s share capital is NOK 216,922,370, divided between 65,690,244 class A shares each with a nominal value of NOK 2.5, and 21,078,704 class B shares each with
a nominal value of NOK 2.5. The Company’s shares shall be registered with the Norwegian Central Securities Depository (VPS).
Only holders of class A shares shall have voting rights at annual and extraordinary general meetings, however in certain circumstances also B shares have voting rights. In all other respects, the two classes of shares are equal, and have the same rights to dividends. In the event of bonus issues, holders of class A shares shall be entitled to new class A shares and holders of class B shares shall be entitled to new class B shares unless otherwise decided
by the General Meeting.
The existence of two classes of shares is due to historical reasons, but this is no longer a very common practice on the Oslo Stock Exchange. As a result the Board has initiated an evaluation of the legal and regulatory issues related to converting into one single class of shares. Any change of share structure would require majority vote in both share classes.
Transactions in own shares
Any transactions carried out by the Company in treasuryshares will be reported to the Oslo Stock Exchange and to other wider market through stock exchange releases
and press releases.
Transactions with close associates
Any material transaction between the Company and any shareholder, Board Member, executive employees or any closely related party of the foregoing should be reviewed
by an external third party before being concluded. This does not apply for any agreement approved by the General Meeting according to the Norwegian Public Limited Liability
Companies Act. Independent valuations should also be obtained in respect of transactions between companies in the same group where any of the companies involved
have minority shareholders.
Members of the Board of Directors and executive employees shall notify the Board if they have any material direct or indirect interest in any transaction entered into by the
Guidelines for Directors and Corporate Management
The Board has established a policy in respect of share trading. The policy is in line with the Guidelines for Insiders issued by the Oslo Stock Exchange and applies to the Board, the President/CEO, the Odfjell Management Group and other employees who in connection with their work may gain access to price sensitive non-public information.
Freely negotiable shares
The Company’s shares are listed on the Oslo Stock Exchange and are freely tradable. There is no form of restriction on negotiability included in the Company’s Articles of Association. The Board is not aware of any agreements that may secure any shareholder beneficial rights to own or trade shares at the expense of other shareholders. The
shares are registered in the Norwegian Central Securities Depository (VPS).
The General meetings of shareholders
The Board is responsible for convening both annual and extraordinary general meetings. The Company arranges for the Annual General Meeting to be held within six months of the end of each financial year. The notice convening the meeting and other documents regarding
the General Meeting shall be available on the Company's website no later than the 21st day before the date of the General Meeting, up to and including the day the meeting is held. When documents concerning matters that are to be considered by the meeting have been made available to the shareholders on the Company’s website, the requirement of the Norwegian Public Limited Liability Companies Act that the documents be sent to shareholders does not
apply. This also applies to documents that are required by law to be included in or enclosed with the notice of the General Meeting. A shareholder may nonetheless demand to have documents sent that concern matters to be considered by the General Meeting. Shareholders
who wish to attend the General Meeting must notify the Company no later than five days before the General Meeting. It is possible to register for the Annual General Meeting by mail, e-mail or fax.
The notice shall provide sufficient information on all matters to be considered at the General Meeting, voting instructions and opportunities to vote by proxy. Matters discussed at
the General Meeting are restricted to those set forth in the agenda.
Representatives of the Board and the Auditor participate in the Annual General Meeting. Management is represented by the President/CEO and/or the Senior Vice President
The following matters shall be the business of the Annual
1. Adoption of the annual accounts and the Board of
2. Application of any profit for the year or coverage of
any loss for the year in accordance with the adopted
balance sheet, and the declaration of dividend
3. Election of members of the Board of Directors
4. Adoption of the remuneration of the Board of
5. Any other matters that by law or pursuant to the
Company’s Articles of Association or as stated in
the notice of the Annual General Meeting.
Proposals that shareholders wish the general meeting to consider must be submitted in writing to the Board of Directors in sufficient time to be included in the notice of the General Meeting.
Any other matters which shareholders wish to have considered at the Annual General Meeting must be submitted in writing to the Board of Directors in time to be included in the notice of the Annual General Meeting. Extraordinary general meetings may be called in accordance with the provision of the Norwegian Limited Liability Companies Act.
The Annual General Meeting represents an occasion for the Board to meet and discuss with shareholders face-to-face and to decide on important issues such as the appointment of the auditors, dividend payments, and the election or re-election of Board Members.
The Company has a Nomination Committee. The General Meeting shall elect the Committee Chairman and members, determine their remuneration and determine guidelines for duties of the Committee.
Corporate Assembly and Board of Directors - composition and independence
The Company’s Management is organised in accordance with a single-tier system and it shall have an administrative body (Board of Directors).
The Company’s Board of Directors shall consist of between five and seven members to be elected by the Annual General Meeting for a period of two years. The Board elects the
Chairman of the Board.
The Company has no corporate assembly and the Annual General Meeting elects the Board. The interests of the employees are upheld through an agreement between the employees and Odfjell concerning the involvement of employees. The employees have established a permanent Employee Representatives Body (ERB). The ERB consists of up to six representatives, partly from our tank terminal in Rotterdam, the main office in Bergen and the Officers' Council. The scope of information and consulting procedures shall cover transnational issues, concerning a group of employees either in the Company directly or in one or more of its subsidiaries.
Employee involvement at corporate level and in most subsidiaries abroad is also secured by various committees and councils, in which Management and employee representatives, both onshore personnel and seafarers, meet to discuss relevant issues.
Since 8 May 2012 the Board has comprised Laurence W. Odfjell (Executive Chairman), B.D. Odfjell, Christine Rødsæther, Terje Storeng, Irene Waage Basili and Jannicke Nilsson. The Executive Chairman, Laurence W. Odfjell has been assigned special tasks by the Board, and consequently acts as Executive Chairman. Laurence W. Odfjell and Board Member Bernt Daniel Odfjell represent the Odfjell family, the largest shareholder of Odfjell SE. Terje Storeng, Christine R.ds.ther, Irene Waage Basili and Jannicke Nilsson are independent Board Members. Even though Terje Storeng does not meet all the requirements for independence
in the Norwegian Corporate Governance Board (NUES), he performs his duties independently as Board Member. The Company believes that the Board is well positioned to act independently of the Company’s Management Group and exercise proper supervision of the Management and its operations. The annual report contains a presentation of the Board of Directors and details of the shareholdings of all Directors. Board Members are elected for a period of two years, and two of the existing Board Members are up for a new election at the 2013 Annual General Meeting. The proportionate representation of gender of the Board
is within the legislated target.
The Work of the Board of Directors
The Board is responsible for determining the Company's objectives, and for ensuring that necessary means for achieving them are in place. Thus, the Board of Directors also determines the Company’s strategic direction and decides on matters that are of significant nature in relation to the Company's overall activities. Such matters include confirmation of the strategic guidelines including any changes to the strategic business model, approval of the
budgets as well as decisions on major investments and divestments. Furthermore, the Board ensures a correct capital structure and defines the dividend policy. The Board also appoints the President/CEO and determines his/her remuneration.
It is the responsibility of the Board to ensure that the Company, its Management and employees operate in a safe, legal, ethically and socially responsible manner. To emphasize the importance of these issues, a Company specific Corporate Social Responsibility Policy and a code of conduct are in place and are widely circulated throughout the organisation. The Code of Conduct focuses on aspects of ethical behaviour in day-to-day business activities.
The Board of Directors has issued instructions for its own work as well as for the Odfjell Management Group with particular emphasis on clear internal allocation of responsibilities
and duties. The instructions should be evaluated annually in connection with the annual assessment of the Board’s performance and expertise. The Board endeavours to schedule in advance a number of regular meetings to be held during the calendar year, normally about eight to ten meetings per year, depending on the level of the Company’s activities. In addition to regular board meetings, the Board holds meetings, either by telephone conference or by written resolution at the request of the Executive Chairman, the President/CEO or by any two Board Members. The Board meetings are chaired by the Executive Chairman unless otherwise agreed by a majority of the Directors attending. If the Executive Chairman is not present, the Directors shall elect a Director to preside over the board meeting.
The Board had eight ordinary meetings and ten extraordinary meetings in 2012, with 92,4% Director attendance. The Board has carried out a self-assessment of its work.
The Audit Committee is elected by the Board and consists of two Board Members; Terje Storeng and Irene Waage Basili. The Audit Committee reports to, and acts as a preparatory and advisory working committee for the Board. The establishment of the Audit Committee does not alter the Board's legal responsibilities or tasks.
Risk management and internal control
The risk management process and the system of internal control are subject to continuous improvement.
Business strategies are prepared at regional level and are approved by the Board. In addition, there are annual budgeting and strategic planning processes. Financial forecasts are prepared every quarter. Actual performance is compared to budget, latest forecast and prior year on a monthly basis. Significant variances are investigated and explained through normal monthly
The Company has established an organisation structure that supports clear lines of communication and accountability, and delegation of authority rules that specify
The Company focuses strongly on regular and relevant management reporting of both operational and financial matters, both in order to ensure adequate information for decision-making and to respond quickly to changing conditions. Evaluation and approval procedures for major capital expenditure and significant treasury transactions are established.
The Board receives monthly reports on the Company’s financial performance and status reports on the Group’s key individual projects. The Group also regularly conducts internal audits of individual units’ adherence to systems and procedures. The internal audit department provides additional assurance to the Board and the Audit Committee that key controls are operating as intended.
Financial performance is also reported on a quarterly basis to the Board and to the Oslo Stock Exchange.
Odfjell’s Board is kept updated on Management and Company activities through reporting systems, including the monthly reports. A safety (QHSE) update is normally the first item on the agenda of all ordinary meetings of the Board of Directors.
Odfjell’s Compliance Officer monitors that the Company acts in accordance with applicable laws and regulations, the Company's Code of Conduct and ensures that the Company acts in an ethical and socially responsible way. Particular focus has been applied to competition law
compliance, and regular updates are issued to all relevant personnel.
The Company is also subject to external control functions including by auditors, ship classification societies, customer vettings, port and flag state, and other regulatory bodies
Board Members' Remuneration
Remuneration of the Board Members is decided by the Annual General Meeting. Members of the Board do not take part in any incentive or share option programmes. The remuneration of the Board of Directors is not linked to the Company's performance. Board Members of the
companies they represent are not supposed to take on assignments for the Company.
Pursuant to Section 6–16 a) of the Norwegian Public Limited Companies Act, the Board of Directors has issued a statement regarding the establishment of salaries and other remuneration for the Management. The statement is disclosed in note 23 to the annual accounts and as a separate document to be presented to the Annual General Meeting.
Information and Communictaion
Through its Corporate Governance Policy, the Board has implemented guidelines for disclosure of Company information. The reporting of financial and other information will be
based on openness and equal treatment of all participants. The Company provides shareholders and the market as a whole with information about the Company. Such information takes the form of annual reports, quarterly reports, stock exchange bulletins, press releases, information on the Company website and investor presentations when appropriate. The Company seeks to treat all shareholders equally in line with applicable regulations. Information distributed through the Oslo Stock Exchange, or otherwise in press releases, is published simultaneously on www.odfjell.com. The Company aims to have regular resentations. The financial calendar is available through stock exchange announcements and on the Company’s website. Open investor presentations are held at least twice a year
in connection with Odfjell's quarterly reports. The CEO/President reviews and makes comments on results, market developments and prospects. Odfjell's CFO/Senior Vice
President Finance also participates in these presentations. The presentations of the annual and quarterly reports are published via Oslo Stock Exchange and posted on the corporate website at the same time as they are presented. The annual and mid-year results are presented in a live
presentation in Oslo, whereas reports following publication of first and third quarter results are made available through webcasts. Odfjell also maintains an ongoing dialogue with, and make presentations to selected analysts and investors.Care is taken to secure impartial distribution of information when dealing with shareholders, investors and analysts.
The Board shall ensure that the Company’s quarterly and annual financial statements provides a correct and complete picture of the Group’s financial and business position, including the extent to which operational and strategic goals have been achieved.
During the course of any takeover process, the Board and Management shall use their best efforts to ensure that all the shareholders of the Company are treated equally. The Board shall also use its best efforts to ensure that sufficient information to assess the takeover bid is provided to the shareholders.
In the event of a takeover bid for the shares in the Company, the Board shall not seek to prevent or obstruct takeover bids for the Company’s activities or shares, unless there are
particular reasons, for such actions. The Board shall not exercise mandates or pass any resolutions with the intention of obstructing the take-over bid unless this is approved by the General Meeting following announcement of the bid. In particular, the Board shall in such circumstances not without the prior approval of the General Meeting (i) issue shares or any other equity instruments in the Company, (ii) resolve to merge the Company with any other entity, (iii) resolve on any transaction that has a material effect
on the Company’s activities, or (iv) purchase or sell any shares in the Company.
If an offer is made for the shares in the Company, the Board shall issue a statement evaluating the offer and make a recommendation as to whether the shareholders should accept the offer. If the Board finds itself unable to provide such a recommendation, it shall explain the background. The Board’s statement on a bid shall make clear whether the views expressed are unanimous, and if this is not the case, it shall explain the basis on which members of the Board have excluded themselves from the Board’s statement. The Board shall consider whether to arrange a valuation from an independent expert. If any member of the Board or the Management, or close associates of such persons, or anyone who has recently held such a position, is either the bidder or has a similar particular interest in the bid, the Board shall in any case arrange an independent valuation. This shall also apply if the bidder is a major shareholder in the Company. Any such valuation should be either attached to the Board’s
statement, be reproduced in the statement or be referred to in the statement.
The Company emphasizes on keeping a close and open relationship with the Company’s Auditor. The Auditor participates in Board meetings for approval of the annual accounts. The Company’s Auditor shall present an annual plan for its audit work to the Audit Committee. In addition the Auditor shall present a review of the Company’s internal control procedures, including identified weaknesses and proposed improvements. The Board shall at least yearly
have a meeting with the Auditor without the Management’s presence. The Auditor’s fees for auditing and other services are presented to the Annual General Meeting and are included in the notes to the annual accounts. The Board continuously evaluates the need for written guidelines concerning the Odfjell Management Group’s employment of the Auditor for other services than audit. The Board believes that the Auditor’s independence of the Company’s
Management is assured. The Auditor shall issue a written annual declaration confirming the Auditor’s independence.
In order to secure consistency in control and audits of the Group, Odfjell generally uses the same audit firm for all subsidiaries worldwide, and currently engages Ernst & Young as the Company's independent Auditor.