Corporate governance

NHST Media Group strives to follow the recommendations of the Oslo Stock Exchange with regard to good corporate governance and company management. An account of central factors and any departures follows.

Every business depends on good relations if it is to succeed. A good reputation and good financial development are prerequisites for building and maintaining confidence among important stakeholder groups such as shareholders, customers, employees, suppliers, partners and public authorities. This requires that the company be managed using good control and management mechanisms. Open, honest communication and equal treatment of the company’s shareholders are also important when it comes to increasing shareholder value and inspiring confidence. The company has annual rolling four-year strategic plans, an annual budget and comprehensive rules for journalism activities, as well as providing supplementary information in the annual report on other matters relating to corporate governance and company management. In addition, the company has rules for the Board of Directors and the CEO. See also the rest of the account.

Operations
The object of the company is set out in the Articles of Association, while its goals and strategies are described in the annual report.

Equity
NHST Media Group AS has share capital of NOK 12,879,250. Equity stood at NOK 115.0 million as at 31 December 2010, i.e. an equity ratio of 24 %. The equity ratio for the group was 28 %.

Dividend
NHST endeavours to be financed through equity and aims to offer a competitive return on its shares in the form of price rises and dividends. When assessing the size of the dividend, the Board of Directors attaches importance to the company’s dividend capacity, the requirement for adequate equity and the need to have sufficient financial resources for future development. A dividend of NOK 10 million, equivalent to NOK 7.76 per share, is being proposed to the General Meeting for 2010.

Share issues
There were no share issues in 2010 and no further share issues are proposed.

Treasury shares
Holdings of treasury shares were unchanged in 2010. Holdings consist of 44,752 treasury shares.

Equal treatment of share-holders and transactions with related parties
The company’s General Meeting is open to all approved shareholders and all approved shares carry equal voting rights. All shareholders may attend in person or by proxy. It is not possible to attend and/or vote via the Internet. There are no known shareholders’ agreements. The General Meeting is convened with the statutory minimum notice.

Negotiability
There is just one class of shares and each share carries one vote at the General Meeting. The shares are freely negotiable, though the Board of Directors may refuse to allow a share transfer on reasonable grounds. The right to refuse consent for the acquisition of shares is based on the need for editorial and commercial independence.

General Meeting
The documents for the General Meeting, including the recommendations of the election committee, are sent to share-holders no less than two weeks before the General Meeting is held. Importance is attached to the documents containing the information necessary for the shareholders to be able to decide on the business on the agenda. According to the Articles of Association, the Chairman of the Board of Directors chairs the General Meeting.

Committees
The nomination committee was elected by and from among the members of the Board of Directors for reasons of expediency. The group has a compensation committee consisting of three Board Members.

Corporate Assembly and Board of Directors – composition and independence

NHST Media Group AS does not have a corporate assembly.

NHST Media Group aims to balance the composition of its Board of Directors so that it takes account of expertise, experience and background relevant to the company’s activities and represents the composition of shareholders. The company’s management is not represented on the Board of Directors. There are no family ties with the General Manager or other senior employees. Performance-related directors’ fees are not used. The Board of Directors normally consists of five representatives elected by shareholders. All representatives are elected for two years at a time on a rotating basis. In 2010 three of the Board Members elected by shareholders had direct or indirect shareholdings in the company (see note 16). None of the Board Members has significant business relations with the company.

Work of the Board of Directors
The Board of Directors regularly receives a group reporting package containing financial information on the group and the individual group companies. The Board also regularly receives management’s comments on developments during the year. The company’s strategy is discussed on a broad basis at an extended Board Meeting every year. There is also a rotating review of subsidiaries at individual Board Meetings. The work of the Board of Directors is evaluated annually.

Risk management and internal control
The group is exposed to various types of financial risk linked to ordinary operations. In the short term this involves unpredictable advertising markets in particular, but also technical business interruptions and distribution. The group therefore has comprehensive systems in place for monitoring and dealing with such situations. The group is exposed to risks associated with operations in several foreign currencies. This risk is assessed continuously, in addition to which the group has a set policy of hedging approximately 50-70 % of its net anticipated surplus liquidity in the most important currencies for 12 months ahead every November/December. Hedging as at 31 December is described in detail in the notes to the accounts. The group has a relatively wide-spread customer portfolio, on which it runs a credit risk, but it also has credit insurance for some large customers. During 2010 the group continued to focus on outstanding receivables and the Board of Directors judges the risk of significant losses to be relatively small.

Board remuneration
The General Meeting fixes remuneration for the Board of Directors every year. In 2010 the total remuneration paid to the Board of Directors was NOK 945,000. In May 2010 the General Meeting fixed directors’ remuneration at NOK 175,000 for the Chairman of the Board of Directors and NOK 110,000 for each of the other Board Members (reduced in proportion to attendance at Board Meetings).

Remuneration of senior employees
NHST Media Group attaches importance to being an attractive employer. The company wants to attract skilled employees with relevant experience. The company therefore aims to have a competitive remuneration system.

Information and communication
NHST Media Group endeavours to provide good, correct information externally every quarter, with information being given to shareholders on an equal basis. Reports and announcements are also available on NHST’s website at www.nhst.no.

The company does not make specific assumptions about future revenue and profits. NHST’s shares are listed in the OTC list in Oslo (stockbrokers’ list of unlisted shares) and the share price is listed daily under “Børs og marked” in Dagens Næringsliv. At the turn of the year the share price was NOK 395.

Company takeover
The company has no defence mechanisms against possible takeover bids in its Articles of Association. Nor has it prepared guidelines for how the company would act in the event of a possible takeover bid.

Auditor
The company uses the same firm of accountants for all its subsidiaries on all the markets where it is active with the exception of Sweden and Finland. The overall auditing quote is discussed and approved by the Board of Directors and CEO. The auditor is not used as a consultant for strategic matters. The CFO approves any consultancy assignments.

The auditor attends the Board Meeting at which the financial statements are discussed. The auditor’s remuneration is reported at the General Meeting and described in the notes to the accounts.