Rules of procedure

(Laid down by the Board of Directors on 4 August 2010)

Pursuant to Section 6-23 of the Public Limited Companies Act, the Board of Directors has approved the following rules of procedure:

1. Purpose

These rules of procedure provide detailed rules for the work and procedure of the Board, including what business is to be considered by the Board and rules for calling meetings and considering business at meetings. Through separate rules of procedure, which are attached to these rules of procedure, the managing director’s job tasks and obligations to the Board are described in greater detail than that which is specified in the present rules of procedure.

 

 

2. The Board’s administrative and supervisory responsibility

The administration of the Company comes under authority of the Board. Through the managing director, the Board shall ensure the proper organisation of its business.

The Board shall lay down strategy, plans and budgets for the Company’s operations.

The Board specifies guidelines for the business in accordance with laws, regulations or other rules unless it comes under the managing director’s general or delegated authority.

The Board shall keep itself informed about the Company’s financial position and is obligated to ensure that its operations, accounts and the management of its assets are subject to adequate control.

The Board shall ensure that the Company has equity and asset management that are proper on the basis of the risk related to and the scope of operations in the Company, and it shall ensure that the statutory requirements are complied with.

The Board shall initiate the investigations it deems necessary to discharge its duties. The Board shall initiate such investigations if so requested by one or more Board members.

The Board shall oversee day-to-day management and the Company’s operations in other respects.

Agreements between the Company and another group company or the Gjensidige Foundation shall be in writing and be submitted to the Board for consideration if the agreements are of material financial importance for the Company.

3. Business to be considered by the Board

The Chairman of the Board shall ensure consideration of relevant business that comes under the authority of the Board. 

The Board shall:
a) issue rules of procedure for the work of the Board;
b) adopt a strategic plan for the Company;
c) hire the managing director, issue rules of procedure for the managing director and his/her remuneration and issue guidelines for remuneration for senior executives. The rules of procedure that have been laid down for the position of managing director are a part of these rules of procedure;
d) manage the Company’s funds;
e) submit an annual report and approve the annual accounts, including the application of the profit for the year or coverage of the loss for the year;
f) determine the general content of the strategic cooperative agreements with mutual fire insurers and marine insurance associations;
g) make decisions in matters not ascribed to other bodies by law or the Articles of Association;
h) consider matters that requires Board consideration pursuant to law or the Articles of Association, including business that according to company circumstances is of great importance or an unusual nature;
i) grant the right to sign for the Company and the power of procuration;
j) determine the Board’s annual plan;
k) conduct an annual self-evaluation of the Board’s work;
l) review the main features of an external auditor’s plan for implementing audit work;
m) review letters and reports from an external auditor concerning the Company’s routines and internal control.

4. Calling Board meetings and preparing business

Board meetings are called by the managing director as agreed with the Chairman of the Board or by the Chairman of the Board himself.  The Board is to be given notice of a meeting in an appropriate manner within the necessary time limit. The Board is to meet as often as necessary to consider relevant business.

If a Board member is unable to attend, a deputy member shall be notified.

A Board member and the managing director may request that the Board be convened and that the Board consider particular items of business.

In consultation with the Chairman of the Board, the managing director shall prepare items of business to be considered by the Board. Items of business are to be prepared and presented in a manner that gives the Board a satisfactory basis for considering them. Written documentation related to an item of business shall normally be made available to Board members and the chairman of the supervisory board one week prior to the Board meeting.

Board meetings are to be held in the Company offices unless otherwise stipulated in the notice of the meeting.

5. The Board’s consideration of business

The Board shall consider business at meetings unless the Chairman of the Board finds that the matter can be presented in writing or considered in another proper manner. The annual accounts and annual report shall be considered at a meeting.

The chairman of the supervisory board shall be invited to attend Board meetings at which the Board prepares for a meeting of the supervisory board or a general meeting.

The Chairman of the Board shall ensure that Board members, to the extent possible, participate in a group consideration of business that is considered without holding a meeting. A Board member or the managing director may request consideration at a meeting.

Board consideration of business is presided over by the Chairman of the Board. If the Chairman of the Board is not in attendance, the Board shall elect a chairman for the consideration of Board business.

The external auditor shall participate in Board meetings that discuss the annual accounts. At these meetings the auditor shall review any material changes in accounting principles and other material factors that the Board should be aware of.

The Board and auditor should have at least one meeting per year at which the managing director or other members of the management are not present.

6. Working committees

The Board shall appoint an audit committee and may establish other working committees that shall help improve the Board’s preparations for its meetings. It is the Board as a whole that is responsible for the decisions it makes. Thus, the working committees have not been delegated decision-making authority to the Board, but are working committees that prepare items of business for the Board. Thus, all necessary and material information shall be submitted to the Board as a whole for consideration of the business prepared by the working committee.

The working committee shall record its meetings, and the minutes shall be submitted to the Board at its next subsequent meeting.

The Board annually selects the members of the working committee from among Board members. The working committee shall submit proposals for guidelines and an annual plan for its work, which are to be approved by the Board. The Board shall annually evaluate the working committees’ work as part of its evaluation of its own work.

The working committee is free to draw on resources, advice and recommendations from sources outside the Group. The working committee can also draw on resources in the Group.

The Board has set up the following working committees:

a) Remuneration committee

The duties of the remuneration committee

The remuneration committee shall prepare:

  • the annual evaluation of, and business relating to, pay and other remuneration for the managing director;
  • guidelines for, and business relating to, pay and other remuneration for senior executives;
  • a statement on determining pay and other remuneration for senior executives (cf. Section 6-16a of the Public Limited Companies Act), including
    • guidelines for determining pay and other remuneration for the coming financial year;
    • an account of the executive pay policy that was followed during the previous financial year, including the ways in which the guidelines for determining executive pay were implemented;
    • an account of the effects for the Company and its owners of the implementation of and/or changes in incentive schemes related to shares
  • other important personnel-related matters concerning senior executives.

The composition of the remuneration committee

The remuneration committee consists of the Chairman of the Board and two Board members who are independent of company management. The committee may make use of external assistance with regard to practical arrangements and professional advice.

b) Audit committee

The duties of the audit committee

The audit committee is a preparatory and advisory working committee for the Board.

The audit committee shall:
a) prepare the Board’s follow-up of the financial reporting process
b) monitor the systems for internal control and risk management as well as the Company’s internal audits,
c) be in regular contact with the Company’s elected auditor regarding the auditing of the annual accounts,
d) assess and monitor the auditor’s independence, cf. Chapter 4 of the Audit and Auditors Act, especially including the extent to which services other than auditing that are performed by an auditor or the accounting firm constitute a threat to that independence.

The composition of the audit committee

The audit committee shall have a minimum of three members. The audit committee’s members are appointed by and from among the Board’s members. Board members who are management employees in the Company cannot be appointed as members of the audit committee.

The audit committee as a whole shall have the qualifications necessary to perform its duties given the Company’s organisation and activities. At least one of the members of the audit committee shall be independent of the business and have qualifications in accounting or auditing.

Board members who are affiliated with the Gjensidige Foundation may not be appointed to the audit committee unless they are given dispensation by the Financial Supervisory Authority of Norway.

7. Quorum for Board meetings

The Board is quorate when more than half of its members are present or take part in Board deliberations. Even so, the Board may not make a decision without giving all members a chance, insofar as it is possible, to participate in the consideration of a matter.

For a decision to be valid, at least half of the Board members are required to have voted for it. Unless otherwise provided for by law or in the Articles of Association, decisions of the Board will be made with a simple majority of members in attendance. In the event of a tie vote, the Chairman casts the deciding vote.

For elections or hiring, the person who receives the most votes is considered to be elected or hired. The Board may decide in advance that a new vote shall be held if no one receives a majority of the votes cast. If there is tie vote for electing a meeting chairman, the election is to be decided by drawing lots. In other instances of tie votes, the chairman of the meeting casts the deciding vote.

8. Board meeting minutes

Minutes shall be kept of Board deliberations. At a minimum, these minutes shall state the time and place, those in attendance, the manner of considering business and the Board’s decisions. The minutes shall state whether the consideration of business met the requirements for a quorum, cf. Section 7.

If the Board’s decision is not unanimous, the minutes must state who voted for and who voted against. A Board member or managing director who disagrees with a decision may request to have their opinion entered into the minutes.

The minutes shall be signed by all members who have participated in Board deliberations.
Board members are obligated to familiarise themselves with decisions made in their absence and shall sign the minutes to certify that they have read them.

9. Agreements with parties closely related to the Company

The Board shall ensure that the Company complies with Sections 3-8 and 3-9 of the Public Limited Companies Act in agreements between the Company and parties mentioned therein.

When non-immaterial agreements are entered into between the Company and shareholders, Board members or members of the management or parties closely related to these bodies, the Board shall obtain the assessment of an independent third party. The same applies to agreements with companies in the Group that have minority shareholders.

Every Board member and member of the management shall immediately notify the Board in writing if he or she directly or indirectly has an interest in a transaction or agreement that has been entered into or is being considered to be entered into by the Company. This applies even if the Board member is regarded as disqualified to consider the matter.

10. Internal control

The Board shall ensure that the Company has proper internal control routines and systems. The internal control routines shall be adequate for protecting the Company’s core values and ethical rules.

Each year the Board shall evaluate the Company’s most at-risk areas and internal control measures suitable for addressing them.

On the basis of instructions from the Board, the managing director shall evaluate and propose internal control measures suited to addressing the Company’s needs. These recommendations are to be presented to the Board, and the Board shall decide whether they are sufficient.

The managing director shall perform internal control in accordance with the guidelines adopted by the Board and present the results to the Board each year.

11. Board attendance at the general meeting

The Board should attend the Company’s general meeting. The Chairman of the Board and managing director shall be present at the general meeting. In the event of a valid reason for absence, a person designated by the Board will attend the meeting. Board members have the right to speak at the general meeting.

12. Board attendance at meetings of the supervisory board

The Board should attend meetings of the supervisory board. The Chairman of the Board and managing director are obligated to be present at the meetings of the supervisory board unless this is obviously unnecessary or they have a valid excuse. In the latter case, a substitute shall be designated. Board members have the right to speak at meetings of the supervisory board.

13. Disqualification owing to conflict of interest

A Board member may not participate in the consideration or decision of issues of such special importance to him-/herself or to any closely related party that the member would have to be regarded as having a direct or indirect personal or financial interest in the matter. The same applies to the managing director. A person is also disqualified if there are other special circumstances that are likely to weaken confidence in his or her motives for participating in the decision of a matter.

Individuals are obligated to ensure that they are not disqualified to consider a matter for reasons of such conflicts of interest. In case of doubt, the matter shall be submitted to the Chairman of the Board. The Chairman of the Board submits questions involving doubts about his/her own impartiality to the whole Board.

Agreements between the Company and a Board member or the managing director are subject to Board approval. Agreements between the Company and third parties where a Board member or the managing director must be regarded as having a special interest are also subject to Board approval.

14. Duty of confidentiality

The Board members have a duty of confidentiality regarding what they in their activities become aware of about other parties’ circumstances unless otherwise specified in laws or in regulations issued pursuant to law. The Board members are obligated to sign a specific declaration of non-disclosure.

15. Amendments to these rules of procedure

Any amendments to these rules of procedure shall be approved by a simple majority of the Board.

Appended to these rules of procedure are the rules of procedure for the office of managing director, which are a complementary part of these rules of procedure, cf. Section 1.