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Implementation and reporting on Corporate Governance |
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Hydro follows the Norwegian Code of Practice for Corporate Governance of 2007 and complies with all recommendations. The Hydro Way represents our framework for leadership, organization and culture and is the foundation for our governance system. |
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Principles
The Hydro Way |
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2
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Hydro business |
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The objectives of the company are to engage in industry, commerce and transport, to utilize energy resources and raw materials, and to engage in other activities connected with these objectives. Activities may also proceed through participation in or in co-operation with other enterprises. |
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Articles of association
Hydro's strategy is described at page 6 in the Annual report 2007 |
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3
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Equity and dividends |
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Hydro's equity capital is appropriate to the company's objectives, strategy and risk profile.
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Page 134 in the Annual report 2007 |
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Hydro's dividend policy is to pay out on average payout 30 percent of net earnings.
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The Hydro share |
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Mandate for buyback of Hydro shares may be granted to the Board by the General Meeting. The mandate should be limited in time to no later than the date of the next annual general meeting.
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4
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Equal treatment of shareholders.
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Hydro has one share class.
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Page 134 in the Annual report 2007
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Transactions are generally carried out through stock exchanges. Buy-backs of own shares are carried out at market prices.
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The Hydro share |
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Shareholders registered in VPS, the Norwegian Registry of Securities, can vote in person or by proxy. Invitations are sent to shareholders or to the shareholder's security deposit bank.
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Transactions with close associates
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Employee share allocations are granted at a discount to market value.
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Note 11 to the consolidated financial statements 2007 |
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Hydro’s Code of Conduct includes guidelines for handling possible conflicts of interest. The Code is valid to all Board members and Hydro employees.
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Code of conduct |
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Regulation of share issues and pre-emptive rights are described in the Articles of Associations. The Company has not issued shares since 1999 in connection with the acquisition of Saga Petroleum, and the Board holds no current mandates for such at present.
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5
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Freely negotiable shares
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The Hydro shares are freely negotiable. The stock is among the five most traded stocks at Oslo Børs and subject to efficient pricing. The Norwegian state through Ministry of Trade and Industry and Folketrygdfondet owns 47.57 percent of the shares.
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Page 134 in the Annual report 2007
The Hydro share |
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6
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General meetings
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The notice of a general meeting is normally available at hydro.com minimum four weeks prior to the meeting and sent to the shareholders minimum two weeks before the meeting. |
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Page 151 in the Annual report 2007
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Our aim is that the resolutions and supporting information distributed are sufficiently detailed and comprehensive to allow shareholders to form a view on all matters to be considered at the meeting. |
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General meeting of shareholders |
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Deadline for shareholders to give notice of attendance in the meeting, is normally maximum two working days before the meeting. |
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Shareholders who cannot attend the meeting in person, can vote by proxy. |
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The board of directors, the nomination committee and the auditor are present at the general meeting. |
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The Annual General Meeting is presided over by the Chairperson of the Corporate Assembly or, in his or her absence, by the Deputy Chairperson. |
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The notice calling the general meeting provides information on the procedures
shareholders must observe in order to participate in and vote at the general meeting. This include:
- the procedure for representation at the meeting through a proxy, including a form to appoint a proxy
- the right for shareholders to propose resolutions in respect of matters to be dealt with by the general meeting
- the web pages where the notice calling the meeting and other supporting documents will be made available
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The following information is available at hydro.com:
- information on the right of shareholders to propose matters to be considered by the general meeting
- how to make proposals for resolutions to be considered by the general meeting, alternatively comments on matters where no resolution is proposed
- a form for appointing a proxy
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The Hydro share |
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The general meeting votes separately for each candidate nominated for election to the company’s corporate bodies. |
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7
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Nomination committee
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The Nomination Committee consists of four members who shall be shareholders or shareholders’ representatives. They are appointed by the General Meeting of Shareholders. Minimum two including the chairperson are appointed among the sharholder elected members of the Corporate Assembly. The committees compensation is determined by the Corporate Assembly. |
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Articles of association |
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Shareholders may nominate candidates for the board of directors and the corporate assembly. |
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Nominations for the Corporate Assembly and the Board of Directors |
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8
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Corporate assembly and board of directors: Composition and independence
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All board directors and members of the corporate assembly are independent of the executive management of Hydro and its main business connections. Lars Tronsgaard, who is a member of the corporate assembly, is representing Folketrygdfondet, owned by the Norwegian State. |
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Page 151 in the Annual report 2007
Note 45 to the consolidated financial statements 2007 |
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The Chair of the Board is elected by the Corporate Assembly. |
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Corporate assembly |
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Board members are elected for a period of two years. |
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Articles of association |
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Five board members own a totality of 36,208 shares as of December 31, 2007. Hydro has no program for board members to aquire shares. All share transactions are conducted according to the Norwegian Securities Trading Act. |
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9
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Board work and responsibilities
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The Board has an annual plan for its work with particular emphasis on objectives, strategy and implementation. |
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Page 151 in the Annual report 2007
Board of directors |
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The Board has developed rules of procedures for its own work as well as for the executive management with particular emphasis on clear internal allocation of responsibilities and duties. |
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The Board's mandate |
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The Corporate Assembly elects both a chairperson and a deputy chairperson of the board. |
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The Board's Audit Committee and Compensation Committee were both established in 2001. |
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The Board conducts annually a self-evaluation of its work, competence and cooperation with management. |
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In addition the Nomination Committee evaluates the Board's competence. |
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Nomination committee |
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10
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Risk management and internal control |
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The Board ensures sound internal control and systems for risk management through e.g. an annual Board review of most important risk factors and internal control. |
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Page 128 in the Annual report 2007 |
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11
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Remuneration of the Board of Directors |
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The shareholder elected members of the Board have no assignment for the company other than the board work. |
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Note 45 to the consolidated financial statements |
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The compensation is determined by the Corporate Assembly. |
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12
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Remuneration of the executive management |
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The board of directors has establish guidelines for the remuneration of the members of the executive management. These guidelines are communicated to the annual general meeting. |
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Articles of association
Note 11 to the consolidated financial statements 2007 |
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13
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Information and communication |
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Hydro has establish guidelines for the company’s reporting of financial and other information based on openness and taking into account the requirement for equal treatment of all participants in the securities market. This includes contact with shareholders other than through the shareholder meetings. |
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Page 134 in the Annual report 2007
The Hydro share |
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A financial calendar is available in this report and at hydro.com. |
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Financial calendar |
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Shareholder information is both published at hydro.com and sent directly to the shareholders. |
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14
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Take-overs
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The Board will handle any possible take-over in accordance with Norwegian corporate law. There are no defence mechanisms against take-over bids in our Articles of Association or in any underlying steering document. Neither have we implemented any measures to limit the opportunity to acquire shares in the company. The Norwegian state through Ministry of Trade and Industry and Folketrygdfondet owns 47.57 percent of the shares. |
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15
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Auditor
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The external auditor participates in relevant agenda items at all meetings in the Audit Committee. Minutes of these meetings are distributed to all Board members. This practice is in line with the EU Audit Directive. |
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Page 153 in the Annual report 2007
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The auditor presents the view on internal control procedures through the annual management letter. |
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Auditing |
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Hydro emphasizes independence and has clear guidelines for use of services performed by auditor. |
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The Audit Committee meets with the external auditor and the head of Internal Audit at least once a year without the presence of Corporate Management. |
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Remuneration to auditor is disclosed in the annual report and approved by the general meeting. |
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