Hydro Annual Report 2011b

Topic Comments References
8 Corporate assembly and board
of directors: Composition and
independence
9 The work of the board of
directors
CORPORATE GOVERNANCE
Further on the Norwegian code of practice for corporate governance 135
The general meeting of shareholders has established guidelines for the
nomination committee (May 5, 2011). The general meeting also
determines the remuneration of the committee. All shareholders may
submit proposals to the nomination committee of candidates to the corpo
at any time. In order to be considered at the next ordinary election,
proposals must be submitted by the end of January in the election year.
The recommendations of the nomination committee include details on the
candidates' background and independence.
All members of the nomination committee are independent of Hydro's
board of directors, Chief Executive Officer and other executive
management.
As the largest shareholder, the Norwegian state is represented on the
nomination committee by Mette I. Wikborg, Director General of the
Ownership Department, on behalf of the Ministry of Trade and Industry.
All board directors, members of the board committees and members of
the corporate assembly are independent of the company's executive
management and material business relationships. Lars Tronsgård, a
member of the corporate assembly, is an employee of the Government
Pension Fund Norway. Tito Botelho Martins Jr., who is Chief Financial
Officer in Vale S.A., sits on Hydro's board of directors.
Two thirds of the corporate assembly and its deputies are elected by the
general meeting of shareholders. The nomination committee nominates
candidates with a view to broad representation by the company's
shareholders and other relevant stakeholders with competence in, for
example, technology, finance, and corporate social responsibility.
The corporate assembly elects the board directors, including its
chairperson and deputy chairperson.
In compliance with Hydro's articles of association, the board consists of
between 9 and 11 members. These are elected for a period of two years.
The upper age limit for members of the board of directors and the
corporate assembly is 70.
The nomination committee aims to achieve a board composition whereby
the members complement each other professionally and the board of
directors is able to function as a corporate body.
As from 28 February 2011, Vale is represented on Hydro's board of
directors. This decision was approved by Hydro's general meeting of
shareholders and corporate assembly. On the same date, Tito Martins Jr.
was appointed as a 10th member of Hydro's board of directors.
As of 31 December 2011, seven of the board's directors own a total of
118,715 shares. Hydro has no share purchase program for members of
the board of directors, with the exception of employee representatives,
who are entitled to buy shares through the employee share purchase
scheme. All share purchase transactions are conducted in compliance
with the Securities Trading Act. Vale owns 447,834,465 shares in Hydro.
The board of directors has established procedures for its own work and
for the executive management, with particular emphasis on clear internal
division of responsibilities whereby the board has responsibility for
supervising and administrating the company and the executive
management has responsibility for the general operation of the Group.
An overview of the members of the
corporate assembly, can be found at
page 130.
Vale S.A. and the Government
Pension Fund Norway are significant
shareholders in Hydro; see page 117.
See page 126 for the current
composition of the board of dirctors
See Hydro's Articles of Association at
www.hydro.com/governance
See page 130 for the current
composition of the board of dirctors
The board of directors' mandate is
available at
www.hydro.com/governance
See also page 130-131