Annual Report 2011 - Kongsberg Maritime - Kongsberg Gruppen

2 INTRODUCTION
7 DIRECTORS’ REPORT AND
18 FINANCIAL STATEMENTS
64 CORPORATE GOVERNANCE
76 FINANCIAL CALENDAR AND ADDRESSES
72
KONGSBERG Annual Report 2011
Ordinarily, there are eight meetings held each year.
Additional meetings are held when considered necessary. In
2011, there were 11 (9) board meetings. The Board meeting
had 97 (95) per cent attendance in 2011.
All directors receive regular information about the
Group’s operational and financial progress well in advance
of the scheduled board meetings. The directors also receive
monthly operations reports. The Group’s business plan,
strategy and risk are regularly reviewed and evaluated by
the Board. The directors are free to consult the Group’s
senior executives as needed. The Board prepares and
establishes an annual plan, including topics for the board
meetings. Ordinarily, the CEO proposes the agenda for
each board meeting. The final agenda is decided in consultation
between the CEO and the Chairman of the Board.
Besides the directors, board meetings are attended by
the CEO, CFO, EVP Public Affairs, and the General Counsel
(secretary of the Board). Other participants are called in as
needed.
The Board adopts decisions of particular importance to
the Group, including the approval of the annual and
quarterly accounts, strategies and strategic plans, the
approval of significant investments (usually those in excess
of MNOK 30), the approval of significant contracts and the
approval of substantial business acquisitions and disposals.
New directors are briefed on the Group’s current strategy
and historical factors related to the current situation.
Professional secrecy – communication between
the Board and shareholders
The Board’s proceedings and minutes are in principle
confidential unless the Board decides otherwise or there is
obviously no need for such treatment. This ensues from
the rules of procedure for the Board of Directors.
Expertise
The entire Board has completed a programme to gain
insight into the Group’s business activities. In that connection,
the Board makes excursions to different Group
locations. The purpose of the excursions is to improve the
Board’s insight into the commercial activities in the area.
Disqualification
The Board is bound by the rules regarding disqualification
as they appear in §6-27 of the Public Limited Companies
Act and in the Rules of Procedure for the Board. In 2011,
one Board member has renounced due to disqualification in
connection with two cases.
Use of Board Committees
The Board set up two subcommittees in 2005: An Audit
Committee and a Compensation Committee.
Both committees prepare items for consideration by the
Board. They are responsible only to the entire Board and
their authority is limited to making recommendations to the
Board.
The Board’s Audit Committee
The Audit Committee has responsibilities related to financial
reporting, the external auditor, internal audits and risk
management. In 2011, the Committee focused on the
Group’s risk management. The Committee consists of two
shareholder-elected directors and one employee-elected
director. The external auditor usually attends the meetings.
The CEO and the other directors are entitled to attend if
they so desire. Six (six) meetings were held in 2011.
Members: John Giverholt (Chair), Anne- Lise Aukner, Kai
Johansen. The mandate for the Audit Committee is on the
Group’s website at www.kongsberg.com.
The Board’s Compensation Committee
The Committee addresses tasks linked to the CEO’s terms
of employment, questions of principle related to wage
levels, the bonus system, pension schemes/terms, employment
contracts, etc. for executives, as well as other
matters related to compensation that the Committee
believes to be of special importance to the Group. The
Committee consists of the Chairman of the Board, one
shareholder-elected director and one employee-elected
director. The CEO is entitled to participate in the Committee’s
meetings if he so desires, except when his own
situation is under discussion. Four (three) meetings were
held in 2011.
Members: Finn Jebsen, Erik Must, Roar Marthiniussen.
The mandate for the Compensation Committee is made
available on the Group’s website at www.kongsberg.com.
The Board’s self-evaluation
The Board has one extended meeting each year to evaluate
the work done by the Board and the CEO. In this connection,
the Board also holds its own activities up for comparison
with the Norwegian Code of Practice for Corporate
Governance. Thus far, the Board has not found it necessary
to use external consultants for the Board’s self-evaluation.
The Board’s evaluation is made available to the Nominating
Committee. Individual performance interviews are
conducted each year between the Chairman of the Board
and the other directors.
10.Risk management and internal control
The Board’s responsibilities and objectives of internal
control
KONGSBERG’s internal control and risk management
system for financial reporting are based on the internationally
recognized framework COSO.
The Group has established a decentralized management
model featuring delegated responsibility for profits. As a
result, the control function parallels the Group’s management
model, and is the individual unit’s responsibility to
make sure that it has the capacity and expertise it requires
to carry out proper internal control.
A master management document has been adopted,