Page 75 - Kitron Annual Report 2011

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Corporate governance
All the shareholder-elected board members are inde-
pendent of the executive management. Further infor-
mation about the board members is presented in the
annual report and on the company’s website.
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 super-
vise the management and the company’s operations.
The division of roles between board and management
is specified in Kitron’s rules of procedure for the board.
The board has approved an annual meeting plan for its
work, which includes meetings with a special focus on
strategy and budgeting. The board conducted a self-
evaluation in February 2011.
Kitron’s board shall also serve as a constructive and
qualified discussion partner for the executive manage-
ment. One of the board’s key duties is to establish ap-
propriate strategies for the group. It is important in this
context that the board, in cooperation with the manage-
ment, ensures that the strategies are implemented, the
results are measured and evaluated and that the strate-
gies are developed in the most appropriate way. Kitron
has defined performance parameters for the strategies
and can thus measure its performance.
The board receives financial reports on a monthly
basis from the administration. The underlying data for
these reports are prepared at each reporting unit. The
information is checked, consolidated, and processed
by the group’s corporate financial staff to produce
the consolidated reports that are submitted to the
board. The reports also include relevant operational
matters. The group does not have a separate internal
audit function. Account controls are exercised through
segregation of duties, guidelines and approval pro-
cedures. The corporate financial staff is responsible
for establishing guidelines and principles. The cor-
porate financial staff handles the group’s financial
transactions. Each profit centre is responsible for the
commercial benefit of manufacturing contracts. Re-
sponsibility for the commercial content of significant
procurement contracts rests with the corporate sourc-
ing organisation.
The board conducts annual evaluations of the ex-
ecutive managers and their performance. These
evaluations also cover an assessment of cooperation
between the board and the management. The results
of these evaluations represent an important element
in the remuneration and incentive programmes, which
are described in the notes to the financial statements.
The board’s audit committee
The boards audit committee is appointed by Kitron
ASA’s board of directors and is a sub-committee of
the board. The audit committee will on behalf of the
board supervise the financial reporting process to
ensure the integrity of the financial statements. The
audit committee will also go through: the company’s
internal supervisory/control routines and risk manage-
ment system, the external audit process including a
recommendation in the choice of an external auditor,
the company’s routines regarding compliance with
laws and regulations affecting the financial reporting
and the company’s code of conduct.
The role of the audit committee is to prepare matters
for consideration by the Board, to support the Board
in its supervisory responsibilities and to ensure that
the requirements made of the company in connection
with its listing on the stock exchange are complied
with.
The committee consists of two shareholder elected
board members and one employee-elected board
member. The independent auditor usually attends the
meetings. During 2011 there were six audit commit-
tee meetings.
The board’s remuneration committee
The Remuneration Committee is appointed by Kitron
ASA’s board of directors and is a sub committee of
the Board. The committee consists of three members
elected among the members of the board.
The remuneration committee will on behalf of the
board supervise remuneration and incentive schemes,
mainly related to the CEO and the Corporate Man-
agement Team (CMT).