RULES OF PROCEDURE FOR THE BOARD OF DIRECTORS, THE EXECUTIVE CHAIRMAN AND THE GENERAL MANAGER IN DOLPHIN GROUP ASA
ADOPTED BY THE BOARD OF DIRECTORS ON 27 APRIL 2015
1. THE BOARD OF DIRECTORS
The Board of Directors shall act as a collegiate body, and the board members shall not act as individual representatives for different shareholders or shareholder groups. The board members shall perform their duties faithfully according to the Company’s interests and to the best interest of all shareholders. The same applies to the General Manager.
The Board and the general manager shall follow the orders and guidelines given by the general meeting, but not comply with decisions that conflict with the law or the Company’s articles of association.
The Board has the overall responsibility for the management of the Company and supervision of the day-to-day management and Company activities. The Board shall:
(a) Employ and dismiss the general manager and determine the remuneration to him/her as well as determine guidelines for remuneration to senior executives,
(b) Ensure that the activities are soundly organised,
(c) Ensure that the business and the executive management have the right qualifications to execute the tasks adopted by the Board and imposed by the general meeting,
(d) Keep themselves informed of the Company’s financial position,
(e) Ensure that the Company’s activities, asset management, accounts and financial reporting are subject to adequate control,
(f) Make decisions that are not comprised by the day-to-day management,
(g) Lead the Company’s strategic planning and ensure the preparation of plans and budgets for the Company’s activities and strategy, hereunder produce an annual plan for its work with particular emphasis on objectives, strategy and implementation, (h) Ensure that the Company has an adequate internal control and risk management
system in relation to the scope and nature of its operations. The internal control and risk management system include the Company’s value and codes of ethics and corporate social responsibility,
(i) review the Company’s most essential areas of risk and the internal control on an annual basis and
(j) evaluate its work and its expertise on an annual basis.
2. THE REMUNERATION TO BOARD MEMBERS FOR SEPARATE TASKS FOR THE COMPANY
Unless required by particular reasons, the board members or affiliated companies shall not take on separate tasks for the Company in addition to their board appointment. If they still do so, the whole Board shall be notified. Remuneration for such tasks shall be approved by the Board.
3. BOARD COMMITTEE
The Board may resolve to appoint any other committee of board members to prepare certain board issues. The Board may delegate tasks to the committee to the extent permitted by law.
Significant information that becomes known to the committee shall be communicated to the Board. The board committee has the right to use the Company’s resources or collect advice and recommendations from outside the Company.
The Company shall, at all times, have two board committees, an audit committee, cf. section 6-41 of the Public Companies Act, and a compensation committee. The executive chairman shall not be a member of the audit committee or the compensation committee.
The audit committee shall consist of board members who fulfil the requirements of section 6-42 of the Public Companies Act. Moreover, the majority of the members should be independent of the Company’s operations. The audit committee shall:
(a) Prepare the Board’s follow up of the financial report process,
(b) Monitor the systems for internal control and risk management as well as the Company’s internal audit if such function is established,
(c) Maintain ongoing contact with the Company’s elected auditor regarding the audit of the annual financial statement, and
(d) Assess and monitor the auditor’s independence, cf. chapter 4 of the Auditors Act, hereunder particularly to which extent other services than auditing, provided by the auditor or the auditing Company, constitute a threat against the auditor’s independence.
The auditor should, at least once a year, review together with the audit committee, the Company’s internal control, hereunder identify weaknesses and provide suggestions for improvements.
The Compensation Committee shall consist of board members who are independent of senior executives. The Compensation Committee shall prepare:
(a) Guidelines and issues on remuneration for senior executives, (b) Other significant personnel related issues for senior executives, and
(c) A statement on salary and remuneration to senior executives as stated in section 6-16a as of the Public Companies Act.
4. EXECUTIVE CHAIRMAN
Tim Wells is a working chairman of the Board.
The executive chairman shall comply with the instructions given by the general meeting or the Board.
Except from matters which shall be explicitly carried out by the Board according to law, the Company’s articles of association or this Rule of Procedure, the executive chairman is authorised to adopt resolutions on any issue related to the Board’s responsibilities, operations and development of the Dolphin group.
However, the executive chairman has not been authorised to adopt resolutions in matters which are of extraordinary or of great importance in relation to the Company’s circumstances. The executive chairman may make decisions, though, when the Board’s decision may not be delayed without major disadvantage for the Company. In such case, the Board shall be informed about the decision made. In individual cases, the Board may resolve to grant a power of attorney to the chairman in order for him to make decisions which normally should have been made by the Board.
Further, only the Board may give the General Manager instructions on how the day-to-day management shall be performed.
The executive chairman or a person he nominates will be authorised to represent the Company on the general meetings of all subsidiaries in the Western Hemisphere and any other companies where the Company may have any direct or indirect shareholdings.
The executive chairman carries a particular responsibility for ensuring that the work of the Board is well organised and that it functions effectively. The executive chairman should encourage the Board to engage in open and constructive debate. The executive chairman should pay particular attention to the need for members of the Board to have appropriate up-to-date professional understanding in order to facilitate high quality work by the Board, and he should take whatever initiatives are necessary in this respect.
5. GENERAL MANAGEMENT
The General Manager is in charge of the day-to-day management of the business and shall follow the orders and guidelines given by the general meeting or the Board.
The General Manager shall see to that:
(a) The Company’s accounts are in accordance with laws and regulations, and that the asset management is executed in a satisfactory manner,
(b) The Company is organised in an appropriate manner,
(c) He or she is continuously informed about the Company’s financial position and performance, hereunder that the Company at all times has a satisfactory equity and liquidity pursuant to the risk and scope assessment of the Company’s operations,
(d) The Company is operated in accordance with applicable legislation, the Company’s articles of association and rules of procedures, as well as any resolutions adopted by the Board or the general meeting,
(e) Any agreements entered into are not in conflict with existing agreements or law, and (f) The Company fulfils its disclosure requirement pursuant to clause 9 below.
The General Manager has the overall responsibility for the Company’s personnel, hereunder the responsibility for employment and dismissals of the Company’s employees. Pay rises or bonus payments that exceed the budget approved by the Board must be approved by the Board.
The General Manager represents the Company externally in matters that constitute a part of the day-to-day management.
The executive chairman or a person he nominates is authorised to represent the Company on the general meetings of all subsidiaries outside the Western hemisphere and any other companies where the Company may have any direct or indirect shareholdings.
The Board may require that the General Manager and the CFO confirm to the Board that the proposed annual report, which the Board is to adopt, has been prepared in accordance with generally accepted accounting principles, that all information mirrors the actual situation of the Company, and that nothing of significance is omitted from the report.
Unless approved by the Board, the Company shall not use the auditor for other services than auditing if there is a reason to believe that the auditor’s accumulated remuneration for the task will exceed NOK 1.500.000.
6. MORE ON THE GENERAL MANAGER’S AUTHORISATION
The General Manager is in charge of the day-to-day management of the Company’s operations.
The daily management does not encompass matters, that according to the Company’s situation, are extraordinary or of great importance. The General Manager may make decisions, though, if authorised by the Board in certain matters or when the Board’s decision may not be delayed without major disadvantage for the Company. In such case, the Board shall be informed about the decision made. In individual cases, the Board may resolve to grant a power of attorney to the chairman in order for him to make decisions which normally should have been made by the Board.
7. RIGHT AND DUTY FOR THE GENERAL MANAGER, THE BOARD MEMBERS AND THE AUDITOR TO GIVE INFORMATION ETC.
The General Manager shall at least every quarter give the board members notice of the Company’s operations, position and performance. Such notice shall be given in writing or at a meeting.
The Board may, at all times, require the General Manager or other employees to give the Board a statement on certain issues. Such statement may also be required from a board member.
Information of importance to the Company given to a board member shall also be communicated to the other board members.
The Board may impose on the General Manager or itself to execute any inspection necessary.
The Board may require the auditor to provide information about the Company that has come to his knowledge during the auditing.
8. TRANSACTIONS WITH ASSOCIATES
If there are insignificant transactions between the Company and shareholders, board members, senior executives or associates, the Board shall ensure that a valuation from an independent third party is carried out. This does not apply when the general meeting shall deal with the matter pursuant to the provisions of the Public Companies Act. An independent evaluation shall also be provided upon transactions between companies within the same group where minority shareholders exist.
Board members and the General Manager shall notify the Board if they directly or indirectly have a significant interest in an agreement entered into by the Company. The General Manager shall also ensure that senior executives notify the Board if they are involved in such a transaction.
9. INFORMATION TO THE MARKET AND THE SHAREHOLDERS The General Manager shall procure that:
(a) The Company fulfils its disclosure requirement pursuant to the Securities Trading Act and the current liabilities of listed companies, and that the information provided to the market is significantly comprehensive, correct, complete and timely,
(b) The Company’s report on financial and other information is based on transparency and in respect of the non-discrimination requirement of the participants in the securities market,
(c) The Company each year publishes an overview of dates for important events such as general meetings, interim reports etc. Information to the shareholders of the Company is published on the Company’s website simultaneously with being submitted to the shareholders
10. THE RELATIONSHIP TO SUBSIDIARIES
The Board may require the subsidiaries to provide necessary information in order to facilitate an evaluation of the Group’s position and performance.
Prior to a resolution which may be of importance to a subsidiary, the Board shall notify the board of the subsidiary of the decision.
11. BOARD MEETINGS
The chairman of the Board shall procure that the Board deals with matters which are within the Board’s authority.
The General Manager shall notify the chairman if he becomes aware of any circumstances which shall be discussed by the Board.
Any board member or General Manager may require the Board to deal with specific matters.
12. NOTIFICATION AND PREPARATION OF A BOARD MEETING
The General Manager shall prepare matters to be discussed by the Board in consultation with the chairman in order for the Board to have a satisfactory basis for their discussions.
The notification for a board meeting with necessary board documents attached shall normally be received by the board member(s) in a timely manner prior to the meeting.
13. PARTICIPATION AT BOARD MEETINGS
Board members have an obligation to participate in the discussion of matters and to vote. The General Manager has the right and duty to participate in the Board’s consideration of matters and to express his opinion, unless otherwise is decided by the Board in each matter.
Board members and the General Manager may not participate in the preparation or discussion of matters where they are disqualified, cf. clause 17 and section 6-27 of the Public Companies Act. Moreover, they shall question their disqualification when in doubt.
In addition, the Board shall facilitate an annual meeting with the auditor without the General Manager or others from the executive management being present.
The auditor shall participate in board meetings which deal with the annual accounts and report.
In the meetings, the auditor should review any significant changes in the Company’s accounting principles, evaluation of significant accounting estimates and all significant matters in which the auditor and the administration disagree.
14. THE BOARD’S ADMINISTRATIVE PROCEDURES
The chairman of the Board decides on how the Board is to consider its matters and may decide that a resolution can be met in another satisfactory manner than in a physical meeting (inter alia in writing or by conference call). The annual accounts and the annual report shall always be discussed in a physical meeting. The same applies for determination of salary and other remuneration to the General Manager and other senior executives. The chairman shall ensure that the board members, to the extent possible, participate in a joint discussion of matters which are treated without a physical meeting.
The chairman directs the board meetings or the vice chairman will do so in the absence of the chairman. If the chairman or the vice chairman does not participate, the Board shall appoint another chairman.
To ensure more independent preparation of matters of significant nature in which the chairman is or has been actively engaged, another board member should lead the discussion.
15. WHEN DOES THE BOARD FORM A QUORUM?
The Board’s resolutions shall be made by general majority. In the event of a voting tie the chairman has the casting vote. Those who have voted for a proposal involving a change to the established situation of the Company, must nevertheless always amount to more than one third of all board members, cf. section 6-25 (1) last sentence of the Public Companies Act.
A resolution can only be made if more than half of the board members are present and all board members, to the extent possible, have been given the opportunity to take part in the discussion.
If a board member is not able to attend, a deputy board member is to be summoned. The same applies if a board member is disqualified.
16. MINUTES
Minutes shall be kept for all board meetings, indicating time and place, participants, procedure and passed resolutions.
If the Board’s resolution is not unanimous, the minutes shall indicate who voted for and against. If any board member or the General Manager does not agree to a resolution, they may demand that their opinion is to be incorporated into the minutes.
Draft minutes are to be sent to the board members as soon as possible after the board meeting.
Possible comments to the draft shall be sent directly to the General Manager or a person appointed by him.
The minutes shall normally be signed in the following board meeting by all the board members present during the discussion. The board members who did not participate shall confirm their knowledge of the minutes by signing the minutes.
17. CONFIDENTIALITY ETC.
Unless otherwise stated by law, the board members are pledged to secrecy regarding all matters that as a board member come to their knowledge. All board documents, hereunder accounts and discussions within the Board are confidential. It is the duty of a board member to provide a declaration of confidentiality. Decisions on exemption from secrecy are determined by a separate Board resolution.
The confidentiality pursuant to the above section does not prevent board members from consulting independent third parties when necessary for proper execution of their Board appointment, provided that the person consulted, has or undertakes the same duty of confidentiality regarding the information as the board members have. The Board or the chairman of the Board may in specific matters in need of confidentiality, adopt limitations to the consultation right according to this section, hereunder prohibit consultations.
Duty of confidentiality pursuant to the first section of this clause 17 shall not prevent the chairman, or another person appointed by the Board or the chairman in providing information to a third party as long as it is in the interest of the Company.
Board members are required to keep written material received in the capacity of a board member, in a sound way to prevent the material from becoming known to unauthorised persons.
The rules above on confidentiality for board members also apply to the General Manager.
Board members and the General Manager shall comply with current regulations on insider trading, investigation obligation, duty to report etc. pursuant to the Securities Trading Act and related regulations, disqualification etc. remuneration from others than the company. A board member or the General Manager must not participate in the discussion or decision of a matter in a situation of conflict of interest, that is of greater importance to him or his closer associated in which he has a major personal or financial interest. A board member or the General Manager
must not participate in a matter on loans or any other credit in favour of themselves or to provide securities for own liability.
A board member or the General Manager must not in connection with legal transactions on behalf of the Company accept remuneration from others than the Company, cf. section 6-17 (1) of the Public Companies Act. This also applies to remuneration as a contracting party or what his or hers representatives have required from the Company. Remuneration that board members and the General Manager cannot receive can neither be received by their associates.
An associate in this clause means an associate as defined in section 1-5 of the Public Companies Act.
18. TAKEOVER OF THE COMPANY
In a bid situation when an offer is considered compelling, the Board and the management have an independent responsibility to ensure that all shareholders are treated equally, and that operations are not disrupted unnecessarily. The Board has a separate responsibility to provide the shareholders with sufficient information and time to review the bid.
Unless required by particular reasons that will affect the Companies operation or going concern, the Board shall not seek to prevent or impede a takeover bid proposal on the Company’s operations or shares. If a bid is put forward on the Company shares, the Board shall not take advantage of emission proxies or take other measures with intention to prevent completion of the bid, without this being approved by the general meeting after the bid was presented.
If an offer is made on the shares of the Company, the Board shall provide a statement with recommendation to whether the shareholders should accept or not. The Board’s statement on the offer should be clear on whether the evaluation is unanimous, and if otherwise, state on which basis the individual board member has reserved themselves from the Board’s opinion.
The Board shall obtain a valuation from an independent expert. The valuation shall be reasoned for and published no later than simultaneously with the statement.
Transactions which in reality entail transfer of the business shall be resolved by the general meeting.
19. AMENDMENTS AND OTHER MATTERS
The Board may, at all times, make amendments to these Rules of Procedure, or depart from this, with unanimous approval from all board members.
The General Manager shall see to that all board members have a copy of the Rules of Procedure, and that new board members receive a review of it.
