The Norwegian Code of Practice for Corporate Governance - Statoil

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The board of directors and the executive management are expected to refrainfrom implementing any measures intended to protect their personal interests atthe expense of the interests of shareholders. The Code of Practice supplementsthe provisions in the Securities Trading Act on the limitation of the company’sfreedom of action once it is aware that an offer is to be made.6For the company, a take-over process gives rise to a particular duty of care todisclose information as required by Chapter 5 of the Securities Trading Act.7The company must strive to ensure that neither inside information aboutthe company, nor any other information about the company that must beassumed to be relevant for shareholders in a bidding process, remains unpublished.If the target company has planned in accordance with its financialcalendar to publish an interim report after an offer is expected to bemade, the company should use its best endeavours to publish the reportbefore the expiry of the acceptance period for the offer.87 Vphl § 5-2 requires that a company shall on its own initiative promptly publish inside informationwhich directly concerns the company. Vphl. § 5-3 permits a company to delay thepublication of such information on particular terms in order not to harm its own legitimatebusiness interests, subject to such delay not misleading the public and the informationbeing kept confidential.⁸ Section 4.5 of the Oslo Børs "Continuing obligations of stock exchange listed companies(Continuing obligations)" stipulates that listed companies must publish the plannedtimetable for publishing interim reports.9 Vphl. § 6-16 stipulates that the company's board of directors must issue a statementon an offer and that the statement shall include information on the board of directors’considered view of the implications of the offer in relation to the company’s interests,including what effect the offeror's strategic plans may have for the company's employeesand for the location of the company's activities, together with the view expressed by thecompany's employees, and other matters material to evaluating whether the offer shouldbe accepted by shareholders. If the board finds itself unable to give a recommendationto shareholders on whether or not to accept the offer, it should explain the backgroundfor not making such a recommendation. The statement must also provide information onthe view, if any, expressed on the offer by members of the board of directors and the chiefexecutive in their role as shareholders in the company. If the offer is made by anyone whois a member of the board of the company, or if the offer is made with the agreement ofthe company's board, the stock exchange shall decide who shall issue the statement. Theestablished practice of Oslo Børs is that the members of the board who are notdisqualified by conflict of interest, even if they do not represent a quorum for decisionsby the board, may normally issue such a statement. In the absence of such persons, and incertain cases where the current board is considered not be sufficiently independent, OsloBørs will require that the statement be issued by an independent expert.56 CORPORATE GOVERNANCE
Evaluation of a bid9Once a company has received an offer, the board of directors is required inthe situations stipulated in the Securities Trading Act to provide a statementon the offer prior to the expiry of the offer period. Such a statement shouldalso be provided in the bid situations covered by the Code of Practice. Shareholderswill find it particularly useful if the board uses its insight into thecompany’s future to produce estimates of the discounted current value ofthe company’s expected future earnings and compares this to the bid received.Such an evaluation should be the main item in the board’s statement.This Section of the Code of Practice imposes requirements that go beyondthe requirements of the Securities Trading Act by recommending that theboard should recommend whether shareholders should or should not acceptthe bid.The board’s statement on a bid should make it clear that the evaluationpresented is the unanimous view of the board, and where this is not the caseit should explain the basis on which specific members of the board haveexcluded themselves from the board’s statement. The board should alsoconsider whether there are any conflicts of interest between minority shareholdersand major shareholders. The board’s evaluation should be basedon generally recognized valuation principles. The statement should also followthe guidelines set out in the Securities Trading Act in all other relevantrespects.This Section of the Code of Practice imposes requirements that supplementthe requirements of the Securities Trading Act by recommending that theboard should obtain a valuation from an independent expert.In a situation where a competing bid is made and the bidder has no connectionto any members of the board of directors or executive personnel or amain shareholder, the board will normally not need to seek an independentvaluation. An independent competing bid will also normally provide sufficientbasis for the board’s evaluation in situations where members of theboard of directors or executive personnel or a main shareholder do have aparticular interest.An independent expert is understood to mean an individual or companythat has no personal interest in the bid such as a results-based fee payableby the bidder, the target company or any major shareholder. If such anindependent valuation is not included in full in the board’s statement or57 CORPORATE GOVERNANCE
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THE NORWEGIAN CODE OF PRACTICE FORC
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Published 23 October 2012Seventh ed
Page 6 and 7: TABLE OF CONTENTSThe Norwegian Corp
Page 8 and 9: Unlisted companies with broadly hel
Page 10 and 11: Changes to the Code of Practice sin
Page 12 and 13: Section 14 ‘Take-overs’The reco
Page 14 and 15: However, the overview may refer to
Page 16 and 17: 3. Equity and dividendsThe company
Page 18 and 19: 4. Equal treatment of shareholders
Page 20 and 21: etc. where the value exceeds 1/20th
Page 22 and 23: 5. Freely negotiable sharesThe comp
Page 24 and 25: CommentaryNotice calling the annual
Page 26 and 27: The Public Companies Act requires t
Page 28 and 29: CommentaryThe use of a nomination c
Page 30 and 31: If the recommendation includes cand
Page 32 and 33: CommentaryComposition of the corpor
Page 34 and 35: • does not have any cross-relatio
Page 36 and 37: company, and on any material appoin
Page 38 and 39: The board’s responsibility for th
Page 40 and 41: egulations for the entire board of
Page 42 and 43: The provisions on the duty of Norwe
Page 44 and 45: • contribute to ensuring that the
Page 46 and 47: 11. Remuneration of the board of di
Page 48 and 49: 12. Remuneration of executive perso
Page 50 and 51: The chief executive is appointed by
Page 52 and 53: When publishing annual and interim
Page 54 and 55: CommentaryFundamental consideration
Page 58 and 59: appended thereto, it must be referr
Page 60 and 61: The knowledge and experience of the
Page 62: The Code of Practice is published b
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The Norwegian Code of Practice for Corporate Governance - Statoil

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