Good corporate governance is vital to the success of StrongPoint ASA. Thus, corporate governance is a key concern for StrongPoint’s Board and employees, and in StrongPoint ASA’s relations with its subsidiaries. The Board has reviewed and updated the company’s corporate governance practice. It is in line with the Accounting Act, section 3-3b and the Norwegian Code of Practice for Corporate Governance, except where deviations from the Code are noted. The presentation adheres to the same order of topics as the fifteen items in the Code. Deviations from Code recommendations are discussed under the item in question.
Implementation and reporting on corporate governance
StrongPoint ASA’s corporate governance principles are determined by the Board of Directors and are set forth in the company’s management documents. The Board’s role is based on the principle of independence from the executive management and the principle of equality and responsibility towards the company’s shareholders. The company’s shares are freely tradable and the Board/executive management considers it a priority to focus on activities that strengthen the liquidity of its shares. The company’s shareholder policy is based on the principle of one share – one vote. Related to potential acquisitions and restructuring situations, the Board will exercise particular concern so that all shareholders’ investments and interests are considered closely. One of the Board’s main tasks is to ensure that the company is based on an optimized capital structure. Equity transactions, including authorizations for share capital increases, are to be justified in terms of extent, form and timing. The Board and executive management must ensure that the company’s information policies ensure that information regarding the company is published correctly, comprehensively and timely, contributing to a correct valuation of the company’s shares. Further, the information policy should give shareholders the best possible foundation for decisions related to investments and voting at general meetings.
Values, ethical guidelines and guidelines for corporate social responsibility
The group’s operations shall be conducted in accordance with the company’s values, ethical guidelines and guidelines for social responsibility determined by the Board and Executive Management. In addition we shall through our activities contribute to a responsible business conduct. StrongPoint ASA’s guidelines are presented on the company’s website.
The company’s business objective is described in the company’s articles of association. StrongPoint is a retail technology company that provides solutions to make shops smarter, shopping experiences better and online grocery shopping more efficient. The business objective ensures that shareholders have control of the business and its risk profile, without limiting the Board or management’s ability to carry out strategic and commercially appropriate decisions within the defined purpose. The articles of association of StrongPoint ASA are presented on the group’s website: strongpoint.com. The company’s objectives and main strategies are presented in the annual report.
Equity and dividends
The group’s equity as of 31 December 2021 amounted to 498.2 MNOK corresponding to an equity ratio of 58.9 per cent.
The company’s share capital is NOK 27 513 145, divided into 44 376 040 shares with a nominal value of NOK 0.62.
StrongPoint’s shareholders should over time get a competitive return on their investment through a combination of cash dividends and increased value of their shares.
When deciding the annual dividend level, the Board of directors will take into consideration expected cash flows, investments in organic growth, plans for growth through mergers and acquisitions, and needs for appropriate financial flexibility. In addition to cash dividends, StrongPoint ASA may buy back shares as part of its total distribution of capital to the shareholders.
The Board’s proposals for future Board authorizations accord with the recommendations with two exceptions. The first concerns the Board’s authorization to increase share capital by up to 9 000 000 shares, which is not limited to a defined purpose.
Secondly, the Board has an authorization to acquire treasury shares at par value of up to NOK 2 728 000 and an overall capital increase of up to 4 400 000 shares. The authorization is not limited to a defined purpose.
The Board has asked the General Meeting for these authorizations to increase the group’s maneuverability.
Both authorizations are valid until the next general meeting or 30 June 2022, whichever comes first.
Equal treatment of shareholders and transactions with close associates
The company has a single class of shares, and all shares carry the same rights related to the company. Equal treatment of all shareholders is crucial. Transactions involving the company’s own shares are executed on the Oslo Stock Exchange, except for the repurchase of minor shareholdings from shareholders with 500 or fewer shares. In the event of material transactions between the company and a shareholder, Board member, member of executive management, or a party closely related to any of the beforementioned, the Board will ensure that independent valuations are made available.
Board members and members of executive management shall report to the Chairman of the Board and the group CEO if they directly or indirectly have significant interests in agreements entered into by StrongPoint ASA or companies in which StrongPoint ASA has significant interests. Additional information on transactions with related parties appears in note 18 in the consolidated accounts. Existing shareholders shall have pre-emptive rights to subscribe for shares in the event of share capital increases, unless otherwise indicated by special circumstances. If the pre-emptive rights of existing shareholders are waived in a share capital increase, the reasons for this waiver shall be explained by the Board of directors and be published through the Oslo Stock Exchange distribution system and on the company website.
Freely negotiable shares
StrongPoint ASA’s shares are freely negotiable. There are no restrictions on transferability in the company’s articles of association.
Meeting notification, registration, and participation
The company encourages all shareholders to participate at general meetings. Notices of general meetings and comprehensive accompanying information are made available to shareholders on the company’s website and sent to shareholders within the deadlines stated in the Norwegian Public Limited Liability Companies Act. The deadline for shareholders to register to attend a general meeting is set as close to the date of the meeting as possible, normally two or three days prior to the meeting. The company is of the opinion that no adequate systems for handling electronic participation at general meetings are currently available. Thus, the Board has decided not to allow such participation at StrongPoint ASA’s general meetings. From 2020, the articles of association allows for digital execution of general meetings, and regulates that votes in advance can be registered. This allows for improved shareholder engagement cross borders.
Proxy and votes in advance
When the general meeting is held digitally, the shareholders can send in votes in advance. Shareholders who are unable to attend a meeting may vote by proxy.
The company has prepared forms that enable shareholders to vote on individual issues. Procedures for using such forms are available on the company’s website. The company does not appoint an independent proxy to vote on behalf of shareholders. The company considers that shareholders’ interests are adequately safeguarded by the option to participate through an appointed proxy or voiting in advance. Procedures for attendance registration and granting proxy are presented in the notice, on the attendance and proxy form and on the company website.
Meeting chair, voting, etc.
Board members, the chairman of the nomination committee, and the company’s auditor are encouraged to attend general meetings. The general meeting is led by the Chairman of the Board or someone elected by the general meeting.
The nomination committee focuses on composing a board that works as a team, that meets legally established regulations as to equal gender representation on boards of directors, and whose members’ experience and qualifications complement each other. Minutes of general meetings are published as soon as practical via the Oslo Stock Exchange distribution system and on the company website.
The company has a nomination committee, as stated in the articles of associations, which consists of: Svein Jacobsen (Chairman), Oskar Bakkevig and Inger Johanne Solhaug. The nomination committee consists of no fewer than three members. Each member is normally elected for a two-year period. The composition of the nomination committee should ensure the interests of shareholders and independence from the Board and executive management.
Nomination committee members and its chairman are elected by the company’s general meeting, which also determines remuneration payable to committee members.
In accordance with StrongPoint ASA’s articles of association, the nomination committee recommends candidates for election to the Board of Directors. In addition, the nomination committee recommends a candidate for Chairman. The nomination committee also makes recommendations on remuneration of Board members. The nomination committee is to justify its recommendations, how it takes care of the shareholders’ and the company’s need for expertise, capacity and diversity. Care should be taken that the Board functions effectively as a cooperative body. Proposals for Board candidates are to be submitted in reasonable time before the general meeting. The annual general meeting will, in accordance with the Code of Practice, be presented with the guidelines governing the duties of the nomination committee for approval. The duties of the nomination committee are found on the company website.
Corporate assembly and Board of Directors, composition and independence
In accordance with the company’s articles of association, the Board comprises between 5 and 11 members. Board members are elected for a period of one year. The Board members are independent of the company’s executive management and its significant business associates. No member of the company’s executive management is a Board member. CEO Jacob Tveraabak has ownership interests in StrongPoint ASA privately and trough his family owned company Juce Holding AS. The current composition of the Board is presented on the company website. The Board members’ expertise is also presented. In 2021, the Board of Directors had 12 meetings.
Board members’ shareholdings are presented in note 9 to the consolidated accounts. Board members are encouraged to invest in the company’s shares, and also receive shares as part of the remuneration. The Board members represent a combination of expertise and experience from finance, industry and organizations. The nomination committee’s reasoned proposal for candidates will be presented on the company website.
The work of the Board of Directors
The Board of StrongPoint ASA annually adopts a plan for its work, emphasizing goals, strategies, and implementation. Also, the Board has adopted board instructions that regulate areas of responsibility, tasks and division of roles of the Board, the Chairman of the Board and the Chief Executive Officer. The Board instructions also feature rules governing Board schedules, notice and chairing of Board meetings, decision-making, the Chief Executive Officer’s duty and right to disclose information to the Board, professional secrecy, impartiality and other issues. The Board evaluates its own performance and expertise once a year through a survey. The Board has an audit committee, which consists of Chairman of the Board Morthen Johannessen and the Board member Klaus de Vibe. The Board evaluates the competence of the audit committee members to be sufficient. The audit committee sets the agenda according to the tasks set in Allmennaksjelovens §6-43.
Risk management and internal control
The Board of Directors of StrongPoint ASA is ultimately responsible for the group’s business operations and is to ensure that the company maintains solid in-house control practices and appropriate risk management systems tailored to the company’s business activities.
StrongPoint ASA is exposed to currency and interest risk, market risk, credit risk and operational risk at its underlying companies. Management of operational risk primarily takes place at each underlying operating company.
Nevertheless, StrongPoint takes an active role on Boards of Directors in subsidiaries. As a rule, all companies have established effective risk management procedures. Management of financial market exposure, including currency, interest and counterparty risk, is presented in greater detail in note 17 to the parent company accounts. StrongPoint has adopted a series of policies to support this, including:
– Financial reporting, financial and risk management. – Ethics and social responsibility. – Authorization conditions, including instructions for the Board and CEO, as well as certification authority. – Audit committee. – Accounting manual regulating group accounting policies, risk accruals and internal control.
The Audit committee and the Board annually reviews the company’s most important risk areas and internal control systems and procedures, and the main elements of these assessments are presented in the Board of Directors’ report. The audit committee also serves as a preparatory group in connection with the quarterly report and reviews the major events, the directors’ report, balance sheet, income statement items and notes to the interim financial statements together with the administration before the report is presented to the Board.
Remuneration of the Board
Board remuneration reflects the Board’s responsibility, expertise, time spent and the complexity of the business. Remuneration does not depend on StrongPoint’s financial performance. There are no option programs for any Board members. 20% of gross remuneration to the Board shall be used for share purchases until the value of the shares corresponds to a minimum of one year’s gross remuneration. The annual general meeting determines Board remuneration following recommendations by the company’s nomination committee.
Board members are elected because of their expertise and knowledge. Directors or their related companies should not undertake special assignments for the company in addition to their Board appointments. However, if they do, the whole Board should be informed. Fees for such assignments must be approved by the Board. All remunerations are specified in the financial statement. Additional information on remuneration paid to Board members for 2021 is presented in note 9 to the consolidated accounts.
Remuneration of executive personnel
The Board has adopted guidelines for remuneration of executive management in accordance with section 6-16a of the Norwegian Public Limited Liability Companies Act. The Board of Directors determines the remuneration of the CEO. StrongPoint ASA implemented a Long Term Incentive Program in 2020 represented as a Stock Option program. The program has ambition to both motivate and retain executive management and key personnel to achieve the overall strategic ambitions. The company’s guidelines and further information on remuneration for 2021 for members of StrongPoint’s executive management is presented in note 9 to the consolidated accounts. Additional information will be also be shared in a remuneration report to be presented to the General meeting in 2022. Some members of StrongPoint’s executive management maintain the company’s interests as board members of other StrongPoint companies. They do not personally receive board remuneration for this. StrongPoint has a worldwide Directors’ and Officer’s liability insurance with a limit of approx. 5% of revenue.
Information and communications
The company has prepared a policy for investor relations (IR), which determines guidelines for contact with shareholders apart from the general meeting. The company’s reporting of financial and other information is based on transparency and equal treatment of interested parties.
The long-term purpose of StrongPoint’s IR activities is to ensure access to capital at competitive terms for the company and correct pricing of shares for shareholders. These goals are to be accomplished through accurate and timely distribution of information that can affect the company’s share price; the company is also to comply with current rules, regulations, and market practices, including the requirement of equal treatment.
All stock exchange notices and press releases are published on the company’s website. Stock exchange notices are also available at: newsweb.oslobors.no. All information that is distributed to shareholders is published through the Oslo Stock Exchange distribution system and on the company website.
The company intends to host public presentations of its financial reporting and these meetings are webcasted simultaneously. The company’s financial calendar is found on the company website.
In a bid situation, StrongPoint’s Board of Directors and management have an independent responsibility to help ensure that shareholders are treated equally, and that the company’s business activities are not disrupted unnecessarily. The Board has a particular responsibility to ensure that shareholders are given sufficient information and time to form a view of the offer. The Board of Directors will not seek to hinder or obstruct take-over bids for the company’s activities or shares unless there are particular reasons for this. An agreement with the bidder to limit the company’s ability to obtain other offerings on the company’s shares will only be entered into when it clearly can be attributed to the company and shareholders’ common interest. The same applies to an agreement to compensate the bidder if the offer is not completed. Any compensation shall be limited to the cost the bidder has incurred in making the bid.
Agreements between the company and provider of importance for the market’s assessment of the offer should be made public no later than the alert that the offer is made. In the event of a take-over bid for the company’s shares, the company’s Board of Directors will not exercise mandates or pass any resolutions with the intention of obstructing the take-over bid unless this is approved by the general meeting following announcement of the bid. If an offer is made for the company’s shares, the company’s Board of Directors will issue a statement making a recommendation as to whether shareholders should or should not accept the offer. The Board’s statement on the offer will make it clear whether the views expressed are unanimous, and if this is not the case it should explain the basis on which specific members of the board have excluded themselves from the Board’s statement. The Board will arrange a valuation from an independent expert. The valuation will include an explanation, and will be made public no later than at the time of the public disclosure of the Board’s statement.
The auditor participates in the Board meeting that decides the annual accounts. The auditor audit material changes in the company’s accounting principles and assessments of material accounting estimates with the Board.
Further, the auditor has provided the Board with written confirmation that the requirement of independence is met. The Board and the audit committee meet with the auditor without the presence of representatives of executive management. The audit committee determines guidelines for executive management’s access to use the auditor for services other than auditing and receives an overview of services rendered by the auditor to the company.
Remuneration for auditing and other services are presented in note 5 to the StrongPoint ASA accounts. Such details are presented to the annual general meeting.