|
|
Corporate Governance at TANDBERG
Shareholder Policy
Investor Relations Policy
Dividend Policy
Nomination Committee Charter
GENERAL PRINCIPLES
It is essential to the TANDBERG Board of Directors that all stakeholders have confidence in the Company based on strong governance practices. These practices include treating all shareholders equally; having independent and competent people in the Company’s governing bodies; ensuring that all financial accounts are audited by qualified, independent auditors; and that information provided by the Company provides an accurate picture of the underlying situation on an ongoing basis.
Strong governance is in keeping with TANDBERG’s core values, which include speed and precision, enthusiasm and integrity, exceeding expectations, fun and profit, and TANDBERG First. Above all, TANDBERG expects and promotes a pervasive sense of integrity and the highest ethical behavior on the part of all employees.
The strength of TANDBERG’s corporate culture is what sets the Company apart from its competition. As the organization grows and continues to become geographically dispersed, there is continuous focus on maintaining the Company culture. The Company has established a formalized set of Ethical Guidelines, based on its corporate values, which have been distributed and communicated to all employees.
TANDBERG’s principles provide the foundation for sustainable value creation for the benefit of our shareholders, employees and other stakeholders. The Board of Directors is committed to protecting shareholder rights and interests.
TANDBERG is incorporated in Norway with a governance structure built on Norwegian corporate law. The Company is organized as a traditional limited company, with a Board of Directors, a Chief Executive Officer, and an external auditor. At the Annual General Meeting, the Board formally ratifies major decisions affecting the Company’s affairs.
BUSINESS
TANDBERG’s mission is to change the way people communicate. This mission is integral to the Company’s corporate culture and founded on the core values that define TANDBERG. The Company’s objectives are anchored in the business activities clause of the Company’s Articles of Association §2, which includes generating profitability, customer satisfaction and value through the development, production, and sale of visual communication products and services.
TANDBERG continually works to strengthen its position as a leading company in the industry, while at the same time maintaining its high corporate social responsibility standards.
The Company’s objectives and principal strategies are covered in the Annual Report.
EQUITY AND DIVIDENDS
TANDBERG’s policy is to maintain a high equity ratio. With a business model that allows for strong cash flow generation, the Company has adequate funds to invest for growth while maintaining consistent dividend distribution.
Mandates granted to the Board of Directors to buy back shares and/or increase the Company’s share capital are restricted to defined purposes and are limited in time to no later than the date of the next Annual General Meeting.
Share-based incentive programs for employees are approved by specific Board mandates. The Board of Directors considers it desirable that employees be more closely connected with the Company through an active interest as shareholders and believes that such an ownership interest represents an important contributory factor to the success of the Company.
In 2006, the Board approved the allocation of 1,500,000 restricted shares for a three-year performance-based incentive program for an extended management team. In 2007, the Board approved the allocation of 250,000 restricted shares for a one-year incentive program for the organization excluding the group covered under the 2006 program described above. Vesting of restricted shares is subject to specific performance criteria that are intended to align employees’ and management’s interests with those of shareholders.
EQUAL TREATMENT OF SHAREHOLDERS AND TRANSACTIONS WITH CLOSE ASSOCIATES
TANDBERG has one class of shares and each share entitles the holder to one vote at the General Meetings.
The Board of Directors is of the opinion that the Company may periodically be confronted with situations where the Company can grow further by making use of rights issues to one or several strategic partners, or through mergers and acquisitions with consideration in shares or cash. In addition, situations could occur where the Company needs to strengthen its equity. To enable the Company to act swiftly in these situations, the Board has been granted mandates to increase the Company’s share capital and/or raise convertible loans with authority to waive the pre-emption rights of existing shareholders.
Any transaction that the Company carries out in its own shares takes place in accordance with established practice and guidelines from the Oslo Stock Exchange.
Strict guidelines regarding transactions between the Company and its shareholders, members of the Board of Directors, executive management and close associates of any such parties have prevented any unfortunate situations. If confronted with such situations, the Company will adhere to the principles laid down in the Norwegian Code of Practice for Corporate Governance.
The Company has an established an insider trading policy, and has closely monitored compliance with the policy.
FREELY NEGOTIABLE SHARES
TANDBERG has no limitations on the transferability of shares and each share has equal rights.
GENERAL MEETINGS
General Meetings are held in accordance with the Norwegian Code of Practice for Corporate Governance. Notice and supporting information are sent in English and/or Norwegian to shareholders at a minimum two weeks in advance of the meeting. Final deadline for shareholders to give notice of their intention to attend the meeting is one working day prior to the meeting. Shareholders who are unable to attend the meeting may vote by proxy. The Chairman, Nomination Committee Chairman, CEO and the auditor are all required to be present at the meeting in person or via video. The Chairman of the meeting is generally independent. Notice, enclosure and protocol of meetings are available on the Company’s web site.
NOMINATION COMMITTEE
An independent Nomination Committee is responsible for proposing candidates for election to the Board by shareholders and justifies its recommendations at the General Meeting. The Nomination Committee, elected at the General Meeting, is a body established pursuant to the Articles of Association. The election of the Committee Chairman and the Committee’s remuneration is determined at the General Meeting.
The Committee is currently comprised of Halvor L¸ken (Committee Chairman), Jan Chr. Opsahl and Åge Korsvold. L¸ken and Korsvold are independent of the Board of Directors and the executive management.
The Nomination Committee Chairman shall explain the background for the Committee’s recommendations at the General Meeting.
A list of Board nominees is given to shareholders with at least two weeks notice prior to voting. For further information about the members of the Committee and deadlines for submitting proposals to the Committee, please see TANDBERG’s web site
www.tandberg.com.
COMPOSITION AND INDEPENDENCE OF THE BOARD OF DIRECTORS
The Board is elected for one year (employee representatives for two years). The Board currently consists of seven members. Five members, including the Chairman and Vice-Chairman, are elected by the shareholders at the Annual General Meeting, and two are elected by the employees. The Board nominees must be committed to enhancing long-term shareholder value and possess a high level of personal and professional ethics, sound business judgment and integrity. The Board’s size and composition will continue to be open to discussion. Please see TANDBERG’s web site for a detailed description of the Board members, including share ownership. TANDBERG does not have a Corporate Assembly.
The composition of the Board of Directors meets the requirements of the Norwegian Code of Practice for Corporate Governance, with all five shareholder-elected members of the board independent of the Company’s executive management, material business contacts and main shareholders. Mechanisms, including the use of Board committees, are in place to ensure independent preparation of matters for discussion by the Board.
A description of the members of the Board is included in the Annual Report for 2007.
THE WORK OF THE BOARD OF DIRECTORS
The conduct of the Board of Directors is in accordance with the Board instructions for TANDBERG asa. A specific meeting and activity plan is adopted towards the end of each year for the following period. The Board meets eight times per year, twice for two-day meetings, and holds additional meetings under special circumstances. Its working methods are openly discussed. Between meetings, the Chairman and Chief Executive Officer update the Board members on current matters. There is frequent contact regarding the progress and affairs of the Company. Each Board meeting includes a briefing by one of the functional or department managers of the Company followed by questions and answers.
Instructions laid out for executive management emphasize the importance of maintaining systems and procedures, a corporate culture that promotes compliance with legal and regulatory requirements and ethical conduct of the business. One two-day meeting is dedicated to product/market development and one two-day meeting is dedicated to strategy/planning.
A vice chairman is elected for the purpose of chairing the board in the event that the Chairman cannot lead the work of the board.
In addition to the Nomination Committee, the Board has established a permanent Compensation Committee and an Audit Committee, and will evaluate a further formalization of instructions, rules of procedure and routines for these committees according to the recommendations of the Norwegian Code of Practice for Corporate Governance.
The Company is also in the process of establishing a Corporate Governance committee.
Facilitated by the Chairman of the Nomination Committee, the Board annually evaluates its work, performance and expertise. The evaluation is made available to and reviewed by the Nomination Committee. A synopsis of the report is presented to the AGM.
RISK MANAGEMENT AND INTERNAL CONTROL
The Board and management are committed to ensuring that the Company maintains sound and effective internal controls to safeguard the shareholders’ investment and the Company’s assets. The market for videoconferencing products is characterized by rapidly changing technology, evolving industry standards and frequent new product introductions.
Through regular briefings at Board meetings by members of the Executive Committee, the Board forms its opinion on the Company’s internal control arrangements and its risk evaluation systems. The Company encourages internal control ownership among line management.
Appropriate guidelines for the internal control structure and the disclosure controls and procedures are being defined within the relevant policies and work instructions.
REMUNERATION OF THE BOARD OF DIRECTORS
Remuneration for Board members is a fixed annual sum proposed by the Nomination Committee and approved at the Annual General Meeting. All remuneration for the Board of Directors is disclosed in Notes of the Annual Report. The remuneration is not linked to the Company’s performance and no options or restricted shares are issued to the members of the Board, with the exception of internal Board members. Members of the Board are encouraged to own shares in the Company.
TANDBERG’s policy is to pay internal Board members for the responsibility, but not for the work connected with the Board position as that is presupposed to be covered by their salary. Board members appointed to Committees are remunerated for their committee work.
Members of the Board of Directors and/or companies with which they are associated will not take on specific assignments for the Company in addition to their appointment as a member of the Board. If they do nonetheless take on such assignments this should be disclosed to the full Board. The remuneration for such additional duties must be approved by the Board.
RENUMERATION OF EXECUTIVE MANAGEMENT
The Compensation Committee, comprised of Amund Skarholt (Committee Chairman) and Barbara Thoralfsson, prepares guidelines for remuneration of the executive management team. A declaration of executive compensation is established annually by the Board and made available for the General Meeting.
The Board evaluates the CEO’s performance at least once a year.
Details concerning remuneration of the executive management, including the CEO’s remuneration, are given in the Notes to the Annual Report.
Share incentive programs for employees are presented and approved in advance of the General Meeting.
INFORMATION AND COMMUNICATIONS
Communication with shareholders is a high priority. During the announcement of quarterly and annual financial results, management provides a forum for answering questions from the Company’s shareholders. The Company has adopted a policy of not giving quantitative guidance to the financial community. General market outlook and qualitative statements will be given. TANDBERG continually seeks ways to communicate more effectively with its shareholders. TANDBERG has qualified for the Oslo Stock Exchange Information Symbol and English Symbol, fulfilling the requirements regarding the scope and distribution of information in accordance with the guidelines.
The TANDBERG web site (www.tandberg.com) provides shareholders with information about the Company including the Company’s investor relations policy, annual and quarterly reports, press releases, financial presentations, share price information, articles of association, protocols from General Meetings, key contact information, financial calendar as well as other pertinent shareholder information.
If TANDBERG is required to or decides to send information to all shareholders, the same information will be posted on the TANDBERG web site before or at the same time as it is sent to shareholders.
TAKE-OVERS
The Board endorses the recommendation of the Norwegian Code of Practice for Corporate Governance, and TANDBERG has no active anti-takeover devices or “poison-pills”.
The Board will help ensure that shareholders are treated equally.
The Board will not seek to hinder or obstruct take-over bids for the Company’s activities or shares unless there are particular reasons for this.
AUDITOR
The auditor participates in meetings of the Board of Directors that deal with the annual accounts and upon special request. Every year the auditor presents to the Board a report outlining the audit activities in the previous fiscal year, highlights the areas that caused the most attention or discussions with management, and discusses identified weaknesses and proposals for improvement in the Company’s internal control procedures.
The auditor will make himself available upon request for meetings with the Board at which no member of the executive management is present, as will the Board upon the auditor’s request. The auditor also participates in meetings of the board’s Audit
Committee when requested.
It is Company policy not to give substantial consultancy contracts to the Company’s auditor.
The General Meeting is informed about the Company’s use and remuneration of the auditor and details are given in Note 2 in the Annual Report.
TANDBERG’s guidelines for Corporate Governance are in accordance with the Norwegian Code of Practice for Corporate Governance, dated 4 December 2007, as required for all listed companies on the Oslo Stock Exchange with effect from 2008.
The principal goal of TANDBERG's shareholder policy is to protect shareholder rights and interests by maximizing the return earned by its shareholders over time within acceptable risk parameters through effective management of the Company's assets and continued growth of the Company's operations and profitability. This includes benchmarking management responsibility with a transparent, open, and accountable mechanism. TANDBERG has no limitations on the transferability of shares and has one class of shares. Each share entitles the holder to one vote.
Communication with shareholders is a high priority. The aim of our investor relations policy is to nurture the loyalty and confidence of our shareholders and financial markets through frequent, full and forthright communication, both directly to shareholders and indirectly through analysts and the media. This leads to improved knowledge of TANDBERG and it allows the share price to reflect the group’s underlying value and future growth prospects as fully as possible. TANDBERG is committed to providing timely, orderly and relevant information consistent with legal and regulatory requirements to ensure that financial markets have sufficient and equal information and understand the business.
During the announcement of quarterly and annual financial results, there is opportunity for management to answer questions from the Company’s shareholders. The Company has adopted a policy of not giving quantitative guidance to the financial community. General market outlook and qualitative statements will be given. TANDBERG continually seeks ways to communicate more effectively with its shareholders. TANDBERG has qualified for the Oslo Stock Exchange Information Symbol and English Symbol, fulfilling the requirements regarding the scope and distribution of information in accordance with the guidelines.
The TANDBERG Web site (www.tandberg.com) provides shareholders with information about the Company including annual and quarterly reports, press releases, financial presentations, share price information, articles of association, protocols from general meetings, key contact information, financial calendar as well as other pertinent shareholder information.
TANDBERG's policy is to maintain a high equity ratio. However, given its business model that allows for strong cash flow generation, the Company has adequate funds to invest for growth while maintaining consistent dividend distribution as long as the Company is reaching targeted growth levels.
In view of the Company's strong cash flow and cash position, the Board of Directors obtained authorization for a share buyback program which opens for buyback of up to 10% of TANDBERG's shares (10,880,671 shares) in the market, and which is valid until 30 June 2008. The intention is to use the shares in connection with incentive schemes for employees, acquisitions or to cancel the shares through a capital reduction. All transactions under this program will be disclosed to the Oslo Stock Exchange, and on www.tandberg.com.
Purpose
The purpose of the Nomination Committee is to recommend to the Annual General Meeting ("AGM") candidates for Directors and Alternate Directors of the Board of Directors to be elected by the shareholders, and to propose remuneration of the members of the Board of Directors and the Audit, Compensation and Nomination Committees, to be approved by the AGM.
Membership
The Nomination Committee shall consist of 2 to 4 members. The committee must be independent of the Board of Directors and the company's management.
Members of the Nomination Committee are elected each year at the AGM.
Procedures
Committee meetings will be convened by the Chairman of the Committee. Each of the members of the Nomination Committee can demand that a meeting be convened. The Chairman of the Committee decides whether the meeting will take place by phone, video or in presence.
Minutes are taken of the committee meetings and signed by all members present.
In its work, the Committee may contact shareholders, members of the Board of Directors, management and external advisors. Shareholders must be encouraged to be active in proposing candidates to the Board of Directors. The Committee must provide relevant information about the proposed candidates.
The Nomination Committee must take account of the recommendations made by the Norwegian Code of Practice on Corporate Governance.
The Committee must prepare, implement and analyze the annual Board of Directors' self assessment.
The Committee Chairman will present the Committee’s recommendations to the AGM and give an account of the Committee's work.
|
|
|
|
