Corporate governance

Corporate governance

Every business depends on good relations to succeed. A good reputation and good financial development are prerequisites for building and maintaining confidence among important target groups such as shareholders, customers, employees, suppliers, joint venture partners and public authorities.

This is conditional on a company being managed in accordance with 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’s assets and inspiring ­confidence.

The NHST Media Group seeks to follow the recommendations of the Oslo Stock Exchange with regard to good corporate governance and company management in order to safeguard such circumstances wherever possible.

An account of central factors and any non-conformance follows.

The company has annual rolling four-year strategic plans, an annual budget and comprehensive rules relating to journalistic activities, and also provides supplementary information in its annual report about other matters ­relating to corporate governance and company management. In addition, the company has rules for the Board of Directors and the CEO.

ACTIVITIES
NHST Media Group AS is a holding company for a number of media and media-related companies within the Group. NHST also runs the Nautical Charts business area which distributes charts and publications to the maritime industry.

This company’s objects clause states that NHST “is an independent media house tasked primarily with publishing trade publications and associated activities for the main purpose of promoting the interests of trade and industry.”

The Group’s other aims and strategies are presented in the Annual Report.

EQUITY AND DIVIDENDS
NHST Media Group AS has a share capital of NOK 12.879.250. Holdings consist of 44,752 own shares.

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 dividends, the Board of Directors attaches importance to the company’s dividend capacity, its requirements for adequate equity and the need to have sufficient financial resources for future developments. The company has defined its strategy to reflect the fact that over time ­dividends should represent 30 % of its normalised profits after tax.

The General Meeting has given the Board two proxies to increase share capital under specific circumstances. The proxies stand for a duration of one year lasting up until the next Ordinary General Meeting.

The Board of NHST Media Group AS has been authorised “on behalf of the company” to acquire the company’s own shares with a total face value of up to NOK 1.287.925, which is equivalent to 10 % of the company’s share capital.

The Board of NHST Media Group AS has been authorised to increase the company’s share capital by up to NOK 1.287.925.

EQUAL TREATMENT OF SHAREHOLDERS AND TRANSACTIONS WITH RELATED PARTIES
There is just one class of shares and each share carries one vote at the General Meeting.

When authorising capital expansion, the Board has granted an exception from the shareholders’ preferential rights to acquire new shares under ­Section 10-4 of the Act relating to ­(Private) Limited Companies (Norway).

No known shareholders’ agreements or business agreements exist with related parties.

FREE TRANSFERABILITY
The shares are freely negotiable, though the Board of Directors may refuse to allow a share transfer when such is warranted. The right to refuse consent for the acquisition of shares is based on the need for editorial and commercial independence.

GENERAL MEETING
The company’s General Meeting is open to all approved shareholders and all approved shares carry equal voting rights. All shareholders who are registered with the Norwegian ­Central Securities Depository (VPS) receive notice to attend meetings and they are entitled to submit proposals and to vote either directly or by proxy. It is not possible to attend and/or vote via the Internet.

Notice to attend the General Meeting shall take place in accordance with the minimum deadline stipulated in the Act relating to (Private) Limited Companies (Norway) and by no later than 8 days prior to the date of the General Meeting, in accordance with the company’s Articles of Association.

Documents for the General Meeting, including the Election Committee’s ­recommendations, shall be sent to the shareholders by no later than one week prior to the General Meeting. Importance is attached to the documents containing the information necessary for ensuring that the shareholders are able to make decisions about the business contained on the agenda.

According to the Articles of Association, the Chairman of the Board of Directors chairs the General Meeting.

NOMINATION COMMITTEE
The company’s Articles of Association do not contain any provisions about the Election Committee. For reasons of convenience, the Election Committee is elected by the members of the Board. It consists of Anette S. Olsen and Christian Must.

CORPORATE ASSEMBLY AND BOARD OF DIRECTORS COMPOSITION AND INDEPENDENCE
NHST Media Group AS does not have a corporate assembly.

The NHST Media Group aims to balance the composition of its Board of Directors so that it takes into account the expertise, experience and background of the company’s activities and represents the composition of its shareholders. The company’s management is not ­represented on the Board of Directors.

The Board of Directors normally consists of five representatives elected by the shareholders. All representatives are elected for two years at a time on a rotating basis. Two of the shareholder’s representatives on the Board are completely independent of the main shareholders.

The Board elects its chairman and deputy chairman. None of the Board members have significant business relations with the company apart from being shareholders. There are no family ties with the General Manager or other ­senior employees.

THE WORK OF THE BOARD
The company has normaly eight Board Meetings in a year and regularly receives a group reporting package containing financial information about the group and its individual 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 rolling review of subsidiaries at ­individual Board meetings.

The Board evaluates its work on an annual basis and Board instructions have been drawn up relating to the work of the Board.

The Board has two sub-committees. The Compensation Committee is chaired by Annette B. Olsen and the Revision Committee is chaired by Richard Aa.

RISK MANAGEMENT AND INTERNAL CONTROL
The Group is exposed to various different risks associated with its ordinary operations, but given the nature of the business run by the Group, the most important risks are primarily financial ones. The management prepares operating reports for the Board on a regular basis, and the Group’s general risk ­profile is discussed by the Board in ­connection with its annual meeting with the auditor.

In the short term the greatest risks involved are the unpredictable nature of the advertising market, technical operational disruptions 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. These risks are assessed ­regularly, and the Group also has a fixed policy designed to hedge certain aspects of its currency exposure by using currency futures based on anticipated cash flow 12 months in advance with effect from the turn of the year. Hedging as at 31 December is described in detail in the notes to the accounts.

The Group has a relatively broad ­customer portfolio and therefore runs a credit risk on these customers. In the Norwegian market the Group has hedged its largest individual customers by taking out credit insurance.

The majority of the Group’s activities are included under a common Group account scheme in respect of which cash flow management is a key aspect.

The Group’s profit/loss liabilities have been decentralised in line with its ­governance model and its 5 business areas. There is a central finance function, but several financial tasks have been decentralised and are handled down the line. Monthly profit/loss reports are prepared centrally and follow-up is received from the boards of group subsidiaries and external board members and as a result of in-house evaluation processes.

REMUNERATION OF THE BOARD OF DIRECTORS
The remuneration of Board members is determined annually for the next 12 months by the General Meeting.

Performance-related directors’ fees are not used.

REMUNERATION OF THE EXECUTIVE MANAGEMENT
The Group attaches importance to being an attractive employer. The ­company is keen to attract skilled employees with ­relevant ­experience. The company ­therefore aims to have a competitive remune­ration system. The company’s ­executives receive performance-based ­salaries.

The structure of the Group’s compen­sation model is discussed by the Board or the Compensation Committee on a regular basis.

INFORMATION AND COMMUNICATIONS
The NHST Media Group endeavours to provide good, correct information externally every quarter, with information being given to shareholders on an equal basis. Reports and messages are available on NHST’s website at www.nhst.no and in the OTC messaging system.

The company does not make any specific assumptions about future turnover and profits/losses. The shares of NHST are listed on the OTC lists (stockbrokers’ list of unlisted shares and share prices are listed daily under “Børs og marked” in Dagens Næringsliv, in financial ­publications and on the OTC.

The financial calendar on NHST’s ­website is updated on an annual basis.

COMPANY TAKEOVER
The company’s Articles of Association contain no defence mechanisms designed to protect it againstany potential take-over offers and nor have any guidelines been drawn up on how the company would respond to any take-over bids.

AUDITOR
The Group uses the same firm of accountants for all its subsidiaries in all the markets where it is active and where auditing is a statutory requirement, with the exception of Finland. The overall auditing quote is discussed and approved by the Board of Directors.

The auditor is not used as a consultant for strategic matters. The CFO approves any consultancy assignments.

The auditor attends Board meetings at which the annual accounts are ­discussed and has also attended a Board meeting which was not attended by the management.

The auditor’s fee is reported at the Annual General Meeting and is also explained in the notes to the accounts.