Corporate governance

The primary intention of Kitron’s corporate governance principles is to increase predictability and transparency, thereby reducing uncertainties associated with the business.

 

The shares are freely negotiable. The Articles of Association include no restrictions on negotiability. All shares have equal voting rights and there is only a single class of shares.
Kitron has issued an insider trading compliance manual with guidelines and control procedures.

 

According to the company’s ethical guidelines, board members and senior management must notify the board if they have any direct or indirect material interest in any transaction contemplated or entered into by the company.

Kitron has a long-term supplier relationship with Kongsberg Gruppen ASA, which is also a significant shareholder in Kitron. All business activities are based on arm’s length terms. In the event of transactions with insiders or close associates, such transactions are carried out in accordance with the relevant recommendations in the Norwegian code of practice for Corporate Governance (the Code).

 

Shareholders exercise the ultimate authority in Kitron through the annual general meeting. All shareholders are entitled to attend the general meeting, where representatives of the board, the nomination committee, and the auditor will be present.

It is Kitron’s intention that the notice of the meeting, the agenda and detailed and comprehensive supporting information, including the nomination committee’s recommendations and related reasoning, shall be issued and made available on Kitron’s website at least 21 days before a general meeting takes place. The same material shall be distributed to all shareholders no later than two weeks before a general meeting takes place.
For administrative purposes, shareholders must give at least two working days’ notice of their attendance at the meeting.

 

 

Shareholders who are unable to attend the meeting in person may vote by proxy. Voting instructions may be given for each item on the agenda.

 

The form of Kitron’s nomination committee is stated in the Articles of Association. The committee shall have three members, including the chair of the committee. Regarding the composition of the nomination committee, the interests of the shareholders shall be taken into account, as well as the members’ independence of the board and of the executive management.

 
The general meeting shall elect the chair and the members of the nomination committee and determine its remuneration. The general meeting has adopted a mandate for the nomination committee which is compliant with the Code. The members of the nomination committee shall be elected for a period of two years. For the sake of continuity, one or two members shall stand for election each year.

 
The nomination committee shall make proposals and presentations to the general meeting regarding: candidates for election to the board; the remuneration of the board; and candidates for election to the nomination committee.

 

Board of directors: Composition and independence

According to the Articles of Association, the board shall consist of seven to eleven members, as resolved by the general meeting. Pursuant to the rules for employee representation, the board shall thus consist of five shareholder-elected members and three members elected by, and from among, the employees. Board members are elected for a period of two years. There is no corporate assembly in Kitron and the board elects its own chair.

 

The work of the board of directors

The board has an overall responsibility for safeguarding the interests of all shareholders and other stakeholders. Furthermore, it is the board’s duty and responsibility to exercise overall control of the company and to supervise senior management and the company’s operations. The demarcation between the roles of board and management is specified in Kitron’s rules of procedure for the board. Kitron’s board shall act as a constructive and qualified partner for discussions with senior management. One of the board’s key duties is to establish appropriate strategies for the group. It is important in this context that the board, in cooperation with management, shall ensure that such strategies are implemented, the results measured and evaluated and that strategies are developed in the most appropriate way. Kitron has defined strategic performance parameters and is thus in a position to assess its strategic performance. Annual evaluations of senior managers and their performance are conducted by the board.

 

The Board’s Audit Committee

As of 1 January 2009, the board established an Audit Committee. The Audit Committee has responsibilities relating to the supervision of financial reporting, the independent auditor and risk management. The committee consists of two shareholder-elected board members and one employee-elected board member. The independent auditor usually attends the committee’s meetings. The CEO is entitled to attend if he so desires.

 

Risk management and internal control

Kitron is organized as a group of distinct manufacturing sites, each fully accountable for its own revenues, profitability and level of capital employed.
To balance the financial risk and shareholders’ interests, the equity ratio should be in the range of 25 to 40 per cent.

 

Remuneration of senior executives

Kitron reports all forms of remuneration received by the chief executive and each of the other members of senior management. For one or more executives, such remuneration may include performance-related cash bonuses or cash bonuses related to share price development. Details of the remuneration of senior management are provided in the notes to the annual financial statements.

 

Takeovers

There are no authorizations or other measures in place that are intended to prevent possible takeovers. In the event of a takeover bid, the fundamental principle governing the actions of the board of Kitron will be the equal treatment of all shareholders.