Corporate Governance

Hiddn Solutions ASA will report in accordance with the Code of Practice in effect at any given time and explain how the group has complied with the individual sections of the Code of Practice. Instances where Hiddn Solutions ASA departs from the Code of Practice are commented on separately.

Norwegian Code of Practice

“The Norwegian Code of Practice for Corporate Governance” was first published by the Norwegian Corporate Governance Board (NUES) on 7 December 2004. On the basis of changes to legislation and regulations and experience gained from the use of the Code of Practice, NUES annually evaluates whether it is necessary to update the Code of Practice. Revisions to the Code of Practice were presented on 8 December 2005, 28 November 2006, 4 December 2007, 21 October 2009, 21 October 2010, 20 October 2011, 23 October 2012 and 30 October 2014.

  1. Statement regarding corporate governance

The Board of Directors of Hiddn Solutions ASA will comply with the Code of Practice for Corporate Governance in all key areas. The group has prepared guidelines for corporate social responsibility, ethical guidelines, guidelines for identification and managing conflicts of interest and internal guidelines for proprietary trading and insider trading. The guidelines describe laws and regulations applicable to all employees, temporary workers and employee representatives, both in partially- and wholly owned subsidiaries, and across the group’s interest groups. The ethical guidelines are clearly communicated throughout the organisation and define what is desirable and undesirable conduct. The guidelines that describe corporate social responsibility deal with the Company’s responsibility towards the people, society and environment affected by the company.

  1. Activities

Hiddn Solutions ASA is a publicly traded company focusing on financing, developing and commercialization of technology.. The articles of association of Hiddn Solutions ASA are reproduced in their entirety in the annual report.

  1. Company capital and dividends

Hiddn Solutions ASA intends to follow a dividend policy favourable to the shareholders. The amount of any dividends to be distributed will be dependent on the Company’s investment requirements and rate of growth as well as the general development and financing of the Company.

  1. Equal treatment of shareholders and transactions with related parties

Hiddn Solutions ASA has one share class, in which each share entitles the holder to one vote at the company’s general meeting. Equal treatment of shareholders has also been ensured in that all capital increases after the stock exchange listing in 2001 have occurred with preferential rights for existing shareholders.

If the company’s Board of Directors approves capital increases which deviate from the preferential rights of existing shareholders on the basis of the authorisation given at the general meeting, the reason for this must be made public in a stock exchange announcement in connection with the capital increase.

Authorisation regarding the purchase of the company’s own shares gives the Board of Directors purchasing freedom in relation to the methods through which the purchasing and sale of shares can occur. Transactions in the company’s own shares would normally be carried out in the Oslo Stock Exchange or otherwise in accordance with the market price.

  1. Free negotiability

The company has no ownership or trading restrictions affecting the company’s shares.

  1. General meeting

The general meeting ensures that shareholders are able to participate in the body which constitutes the highest authority in the company and in which the company’s Articles of Association are stipulated. The Board of Directors will facilitate in such a way that as many shareholders as possible can exercise their ownership rights by participating in the company’s general meeting.

Notice

The general meeting is held by 30 June each year. Notice and agenda documents for ordinary and extraordinary general meetings are, without exception, issued to shareholders with a minimum of 21 days’ notice. The Board of Directors also strives to make the nomination committee’s recommendations available at least 21 days before the general meeting. The company’s financial calenader is published through stock exchange announcements, on Hiddn Solutions ’s website and in the company’s annual report. The Board of Directors ensures that agenda documents to the general meeting include all necessary information in order for shareholders to be able to consider all items that will be dealt with. The annual report is published electronically only. Shareholders may request a physical copy of the annual report free of charge. The general meeting is usually held in Oslo in accordance with the company’s Articles of Association.

Participation

The company’s Articles of Association stipulate that the deadline for registration may not expire earlier than five days before the date of the general meeting, and that the right to participate and vote in the general meeting may be exercised only for shares when the share position has been entered in the register of shareholders by the fifth working day preceding the general meeting. Shareholders are welcome to vote by proxy and proxies may be granted for each individual case that is discussed. Proxy forms are enclosed with the notice and may also be used to provide instructions concerning votes associated with each item under discussion. The chairman of the Board of Directors will, if desired, be able to vote on behalf of shareholders as an authorised proxy. The Board of Directors feels that recommendations from the nomination committee should be voted on as a whole and not individually. This is because the committee’s recommendation for candidates for each position in the company’s bodies is based on the properties already represented in the Board of Directors by members not up for election. The nomination committee attempts to supplement these with members who hold the desired experience and expertise.

As a rule of thumb, the chairman, management, chairman of the nomination committee and the auditor will be present. In recent years the general meeting has been chaired by an independent chairperson. The minutes from the general meeting are made available on the company’s website as soon as possible and no later than 15 days after the general meeting is held.

  1. Nomination committee

At the ordinary general meeting on 31 March 2005, it was stipulated in the Articles of Association that Hiddn Solutions ASA shall have a nomination committee in accordance with the recommendations on corporate governance. In accordance with guidelines adopted by the general meeting, the nomination committee’s tasks include providing recommendations to the general meeting for the election of board members and remuneration of said members. The committee shall consist of three to five members each serving for two years. All members and the chairman of the committee will be elected by the general meeting. The general meeting determines the committee’s remuneration based on the nomination committee’s recommendations.

The committee consists of Ove Steinar Larsen (chairman), Truls Foss (member) and Line Sanderud Bakkevig (member). All committee members are considered independent of the Board of Directors and management employees. The Chief Executive Officer or other management employees are not members of the nomination committee. The composition of the nomination committee aims to balance multiple concerns, among other things the principle of independence and impartiality in the relationship between the committee and those who will be elected is emphasised. The nomination committee’s independence from the Board of Directors and the company management implies that the recommendation for members of the nomination committee should be made by the nomination committee itself. The nomination committee’s recommendation of members is normally issued with the notice for the general meeting. The composition of the nomination committee is decided by simple majority vote.

  1. Corporate assembly and Board of Directors – composition and independence

Corporate assembly

At the end of 2015 neither Hiddn Solutions ASA nor any of its wholly-owned subsidiaries had any employees. There is no requirement for a corporate assembly.

Board of Directors

The Board of Directors of Hiddn Holding ASA consists of four members and currently has the following composition: Øystein Tvenge (chairman), Ola Røthe, Hege Anfindsen, and Cecilie Grue.

Independence

Hiddn Solutions ASA endeavours to ensure independence between shareholders, the Board of Directors and the company’s administration. No members of Hiddn’s Board of Directors are employees of the group. Of the four board members, three are independent of main shareholders. These are Ola Røthe, Hege Anfindsen and Cecilie Grue. Øystein Tvenge represents one of the company’s largest shareholders and is therefore not regarded as independent.

Board members are selected in accordance with the Norwegian act relating to public limited liability companies for two years at a time. The Chief Executive Officer is not a member of the Board of Directors.

Selection of the Board of Directors

The members of the Board of Directors and its chairman are elected at the general meeting. The nomination committee prepares a recommendation of board members prior to the election. The recommendation is usually issued to shareholders together with the notice of the general meeting. The composition of the Board of Directors is decided by simple majority vote. For the election of new board members, the suggestions for the board’s composition take into account conditions set out in the code of practice with regard to independence from the management. This means that the majority of the shareholder-elected members who are selected must be independent of the company’s general management and significant business connections. At least two of the shareholder-elected members should be independent of the main shareholders and representatives of the general management should not be members of the board. Suggestions for the composition of the board will also emphasise diversity, the ability to collaborate and a balanced gender representation.

  1. The work of the Board of Directors

The duties of the Board of Directors

The board has the overall responsibility for the management of the group and for overseeing general management and the group’s business activities. The main tasks include shaping the group’s strategy, as well as control and advisory tasks. Each year, the board prepares a plan for the coming year’s work, in which meeting dates and themes are set out. The board appoints the CEO.

Rules of procedure

The board has developed rules of procedure for the board and the general management with emphasis on clear allocation of internal responsibilities and tasks.

The board’s self-assessment

The board carries out an annual self-assessment of its operations and expertise, which includes an analysis of the board’s composition and how members function both individually and as a group in relation to the goals that have been set.

  1. Risk management and internal control

The Hiddn Solutions has established risk management and internal control as an integrated part of the on-going execution of business activities. The overall framework for risk management and internal control is established at board level and subsequently- implemented by the management and operative employees through the establishment of routines, systems and the on-going follow-up of risk and control activities.

The main purpose of risk management and internal control is to provide reasonable assurance that the group will achieve:

  • Compliance with legislation and regulations, as well as internal guidelines
  • Quality and efficiency within internal operations
  • Reliable internal and external reporting

The main elements in the internal control of financial reporting consist of a common service centre for finance and accounting, including comprehensive accounting control. Internal financial reporting is used actively in the commercial follow-up of the organisation.

See also the dedicated section of the annual report in which risk management and internal control are discussed in detail.

  1. The Board of Directors’ remuneration

The Board of Directors’ remuneration is decided upon at the general meeting and is in accordance with the board’s responsibilities, expertise and time spent. This remuneration is fixed and is in no way dependent upon results.

  1. Remuneration to employees in senior positions

The underlying principle when determining the remuneration is that the total compensation package reflects the responsibility and duties resting with the team members – and that the employee contributes to the long-term value creation in Hiddn. It is important that Hiddn can offer a competitive remuneration package that enables Hiddn to attract the skills and competences needed to support the strategic development of Hiddn both nationally as well as internationally.

  1. Information and communication

Hiddn Solutions ASA aims to carry out accounting and financial reporting that is trusted by the financial market. Emphasis is placed on information being equal and synchronous. Effective communication with the financial market is ensured through all significant new information being sent as stock exchange announcements in accordance with applicable regulations, including the company’s financial calendar with dates for the publication of interim reports and general meeting.

Hiddn Solutions ASA works to ensure open and active communication with the financial market. Open investor presentations are arranged in connection with annual and quarterly results. The company has placed emphasis on further developing and improving the webpages for Investor Relations content. The company complies with Oslo Stock Exchange’s recommendations on reporting of IR information, in which, among other things, requirements are set out relating to the information which must be made available on companies’ websites. The need for further improvement of these pages is assessed on a continuous basis.

The company’s Investor Relations department is in regular contact with shareholders, investors, analysts and the financial market in general.

Shareholders, investors, brokers, analysts and other parties with an interest in Hiddn Solutions are encouraged to contact the company’s IR department by e-mail tvr@hiddn.no or by phone +47 911 08 693. Contact information is also easily accessible on the company’s website.

  1. Corporate takeover

In the event of any takeover bids, the board and management of Hiddn Solutions ASA have an independent responsibility to ensure that the shareholders in the company are treated equally. The board has particular responsibility for ensuring that shareholders have sufficient information to be able to consider the offer. The board endorses the code of practice’s condition that the board cannot try to prevent or impede an offer regarding the company’s business or shares, and will adhere to this. No significant share issuance authorisations exist beyond that which is accounted for here, or other possible measures that can be used to impede or prevent any offer on the company’s shares. In the event of an offer for the company’s shares, the board will provide a statement with an assessment of the offer and a recommendation to the company’s shareholders. If the board is not able to make a recommendation, the reason for this will be given.

In the event of a takeover situation, the board will assess whether to obtain a valuation from an independent expert.

Transactions that, in effect, constitute a sale of the company, will where possible be presented at the general meeting for a final decision.

  1. Auditor

The external auditor submits a plan to the board annually, in which the main features of the planned audit are described. The external auditor participates in the board meeting that deals with annual accounts, as well as other board meetings or audit committee meetings at which significant decisions in relation to accounting or internal control are to be made, along with any other meetings in accordance with the board’s wishes. The external auditor shall, on an annual basis, explain the work carried out in the previous financial year including particular circumstances that have been subject to attention or discussion with management. The external auditor can meet with the audit committee and the board without the general management being present.

The external auditor is engaged on the basis of the ordinary conditions for each company in the group. The external auditor carries out limited tasks for the group beyond auditing and assistance with the preparation and reporting of tax accounts. Fees for auditing and consultancy services are explained in the notes to the annual accounts and are also stated in the documentation for the general meeting.