The Norwegian Code of Practice for Corporate Governance - Statoil

1. Implementation and reporting on corporate governanceThe board of directors must ensure that the company implementssound corporate governance.The board of directors must provide a report on the company’scorporate governance in the directors' report or in a document thatis referred to in the directors' report. The report on the company'scorporate governance must cover every section of the Code ofPractice. If the company does not fully comply with this Code ofPractice, the company must provide an explanation of the reason forthe deviation and what solution it has selected.The board of directors should define the company’s basic corporatevalues and formulate ethical guidelines and guidelines for corporatesocial responsibility in accordance with these values.CommentaryThe requirement for reporting corporate governance is based on the“comply or explain” principle. The Accounting Act stipulates that issuerslisted on a regulated market in Norway must provide a report on theirpolicies and practices for corporate governance. In the event that acompany deviates from the requirements of the Code of Practice, the Actstipulates that the company must provide a justification for such deviation.The requirements of the Code of Practice are more comprehensive than thestatutory requirements: Firstly, the report must cover every section of theCode of Practice. This means that companies must provide information onthe sections with which they comply as well as on the sections from whichthey deviate. Secondly, a company that does not comply with the Codeof Practice must, in addition to providing the justification required by theAccounting Act, explain what alternative solution it has selected.Publishing an overview of all aspects of corporate governance will make iteasier for shareholders and other interested parties to evaluate the extent towhich the company follows the principles of good corporate governance.13 CORPORATE GOVERNANCE