Board of Directors' Report

From left to right: Billy Fredagsvik, Sten Roar Martinsen, Bente Rathe, Grete Faremo, Inge K. Hansen, Terje Vareberg, Heidi M. Petersen, Finn Jebsen and Jørn B. Lilleby.
Hydro acted decisively in response to the unprecedented drop in aluminium markets toward the end of 2008 and will continue to take further proactive measures to meet the demanding market conditions and secure its financial position. We are in the process of closing, temporarily or permanently, those parts of our primary aluminium and alumina production with the highest cost levels. We have also shut down a considerable volume of the production at our remelters. Together with production adjustments in our downstream activities, and the notified workforce reductions within our staff and support organization, this will affect about 3,500 of our employees; many of them will have to leave the company. We are continually considering further reductions in the form of temporary closures or production shutdowns in high-cost, upstream production plants, as well as at production plants within the Aluminium Products business area.

Having of late profited from share price increases and ever higher dividends, our shareholders have also now felt the impact of the worldwide financial setback. Given the company’s dramatically weaker earnings since the end of last year, and the uncertainty with respect to 2009, the Board of Directors proposes that no dividend be paid for the accounting year 2008.

An important objective in 2009 will be to boost Hydro’s competitive position, and the completion of Qatalum according to schedule is one of our most important objectives. The coming on stream of Qatalum, along with the closure of high-cost production capacity, reduce the average production costs in Hydro’s smelter system, and help the company stand more firmly should the crisis last and emerge more strongly when it finally ends.

The cost situation in 2009 will be impacted by falling prices for the raw materials used in our upstream activities. Cost-saving measures have already been implemented, or are currently being prepared, throughout the company. Addressing the cost challenges facing our business is important in meeting the challenges ahead.

Going forward, we will still evaluate growth opportunities within alumina and primary metal, focusing on business opportunities that will further enhance our competitive position in an industry with sound long-term fundamentals. We will continue to develop our downstream operations, targeting selective growth within our high-performing sectors. Our energy operations will play a leading role in ensuring competitive power for our aluminium operations.

In January 2009 the Board announced that Eivind Reiten wished to step down after more than 20 years in the company’s service. The Board regrets this, but respects his decision. Throughout the last eight years Reiten has steered the company through the most extensive restructuring in the company’s 103-year-long history, from being an industrial conglomerate to become a focused aluminium and energy company. At the same time the Board is pleased to announce that Reiten will be succeeded by Svein Richard Brandtzæg with effect from March 30. Brandtzæg has wide-ranging and solid experience from various parts of Hydro’s metal activities, including leading positions outside Norway.

About Hydro's Board of Directors

Terje Vareberg (Chairperson)
Terje Vareberg

• Position: Managing director of Sparebank 1 SR-Bank
• Education: Master of Science in business, 
  Norwegian School of Economics and Business Administration (NHH)
• Current directorships: Vice-chair of "Christiania;" board member of the Norwegian Savings Bank Association; Sparebank 1 Gruppen

• No. of Hydro shares: 10,000

Grete Faremo (Deputy chairperson)
Grete Faremo

• Position: Independent businesswoman
• Education: Master’s degree in law, University of Oslo
• Current directorships: Chair of the board of Abelia; deputy chairperson of the Norwegian Defence Research Establishment; Oslo Philharmonic Orchestra; Cowi AS

• No. of Hydro shares: 0

Finn Jebsen
Finn Jebsen

• Position: Independent businessman.
• Education: Master of Science in business from the Norwegian School of Economics and Business Administration (NHH); MBA from the University of California, Los Angeles.
• Current directorships: Chairperson of Kongsberg Gruppen ASA and Kavli Holding AS; deputy chair of KLP Forsikring; board member of A. Wilhelmsen Management AS, Berner Group AS and Fateburet AS.

• No. of Hydro shares: 32,545

See CV

Jørn B. Lilleby (Employee representative)
Jørn B. Lilleby

Position: Maintenance supervisor / full-time union official representing the Central Cooperative Council (Sentralt Samarbeidsråd).
• Education: Master of Science in mechanical engineering, Norwegian Institute of Technology.
• Current directorships: Chairperson of the board of the community of interest ENGN Grimsmoen airfield, Ottem Transport and Ottem Resirk. 

• No. of Hydro shares: 938.

Heidi M. Petersen
Heidi M. Petersen

• Position: Independent businesswoman 
• Education: Master of Science, University of Trondheim. 
• Current directorships: Chair of the board of Sandefjord Airport; Aker Solutions ASA; Glamox ASA; Nordea AB; Noreco ASA.
• No. of Hydro shares: 10,000

Sten Roar Martinsen (Employee representative)
Sten Roar Martinsen

• Position: Process operator / full-time union official representing the Norwegian Confederation of Trade Unions (LO)
• Education: Certificate of apprenticeship in electrochemistry.
  Work supervisor training.
• Current directorships: None

• No. of Hydro shares: 1,402

See CV

Billy Fredagsvik (Employee representative)
Billy Fredagsvik

• Position: Process operator / full-time union official. Represents the Norwegian Confederation of Trade Unions (LO)
• Education: Trade school (mechanics)
• Current directorships: None

• No. of Hydro shares: 592

See CV

Inge K. Hansen
Inge K. Hansen

• Position: Advisor 
• Education: Master of Science in business, Norwegian School of Economics and Business Administration (NHH) 
• Current directorships: Chair of the board of Avinor; chair of the board of the Norwegian School of Management (BI); chair of the board of Gjensidige Forsikring BA; chair of the board of Norwind AS; Jiffy International AS
• No. of Hydro shares: 0

Bente Rathe
Bente Rathe

• Position: Independent businesswoman.
• Education: Master of Science in business, Norwegian School of Economics and Business Administration (NHH). MBA from the University of Denver. 
• Current directorships: Chair of Powel ASA; Kongsberg Automotive AS; Svenska Handelsbanken AB. 

• No. of Hydro shares: 0

Updated: October 11, 2016