Annual Report 2011 - Kongsberg Maritime - Kongsberg Gruppen

describing how the requirements for internal control establish
a framework for the units’ responsibilities.
Management prepares monthly financial reports that are
sent to and reviewed by the directors. In addition, quarterly
financial reports are prepared. When the Group’s quarterly
financial reports are to be presented, the Audit Committee
reviews the reports prior to the Board meeting. The auditor
takes part in the Audit Committee’s meetings and meets
with the entire Board in connection with the presentation of
the interim annual financial statements, and when required.
The Board’s annual review and reporting
Annual review of the strategic plans of the Board is the
basis for the Board’s discussions and decisions through the
year. Review of the Group’s risks is part of this annual
review. In addition, it is conducted a quarterly review of the
operative risks. Health and safety matters are reviewed
quarterly by the Board. The Board conducts an annual
review of key policy documents in the Group to ensure that
these are updated and cover the relevant topics.
Status of the Group’s work on social responsibility is
reported annually to the Board.
The Group’s financial position and risks are described in
a thorough manner in the annual report.
Compliance with our values, ethics and social responsibility
In 2011, our revised values was introduced together with
the revision of KONGSBERG’s ethical guidelines. Sustainable
value creation requires a high ethical standard. In
KONGSBERG, we emphasize that our values and ethical
guidelines shall be an integrated part of business. We expect
our employees and partners to demonstrate high ethical
standards and compliance with applicable regulations.
In 2011 we have been focusing on developing our anti-
corruption program for use by third-parties, and procedures
for monitoring compliance with social responsibility in the
supply chain.
The Group has compliance functions at Group level and
in business areas. In the same way as for financial reporting,
internal control has been established in accordance with a
decentralized management model. KONGSBERG’s compliance
program is coordinated and monitored from the
Group level. The status of compliance and corporate
responsibility is reported annually to the Board.
KONGSBERG has established procedures for notification
and follow-up on any alleged misconduct.
The Group has an ethics committee whose purpose is to
promote high ethical standards, good behavior and to
ensure that KONGSBERG maintains a good reputation.
11. Directors’ fees
The Annual General Meeting approves the Board’s
compensation each year. The proposal for compensation is
made by the chair of the Nominating Committee. In 2011,
total remuneration to the Board came to NOK 1 697 336
(NOK 1 619 666). The remuneration breaks down as
follows: Chairman of the Board of Directors NOK 372 667
(NOK 359 333), deputy chair NOK 198 667
(NOK 195 333), other directors NOK 186 667
(NOK 177 500). In addition, the members of the Audit
Committee receive NOK 8 400 (NOK 8 150) per meeting,
and a maximum NOK 42 000 (NOK 40 750) per year. The
committee’s chair receives NOK 9 600 (NOK 9 300) per
meeting, and a maximum of NOK 48 000 (NOK 46 500)
per year. The members of the Compensation Committee
receive NOK 6 000 (NOK 5 800) per meeting, and a
maximum of NOK 30 000 (NOK 29 000) per year. The
committee’s chair receives NOK 7 200 (NOK 6 950) per
meeting, and a maximum of NOK 36 000 (NOK 34 750)
per year.
The directors’ fees are not related to financial performance,
option programs or the like. None of the Board’s
shareholder-elected directors work for the company
outside of their directorships, and no one has any agreement
regarding a pension plan or severance pay from the
company.
12. Remuneration of Executive Management
Guidelines
The Board has prepared special guidelines for the stipulation
of salaries and other remuneration to executive
management. The CEO’s terms of employment are set by
the Board. Each year, the Board undertakes a thorough
review of salary and other remuneration to the CEO. The
evaluation is based on market surveys of corresponding
positions.
The structure of the incentive system for the other
members of corporate management is determined by the
Board and presented to the Annual General Meeting for
information purposes. The terms are stipulated by the CEO
in consultation with the Chairman of the Board.
The Board’s attitude to executive management’s salaries
is that they shall be competitive and provide incentive, but
not be at the very top end of the scale.
The incentive system consists of basic wages, bonus,
pension and severance schemes, and other benefits.
Performance-based compensation
In 2006, the Board introduced a new bonus system for
executive management. Performance-based compensation
is linked to the performance trend, profit margin and
non-financial goals. For a more detailed description of the
system, see Note 27 in the 2011 financial statements.
Altogether, the Group has 92 (90) managers who are
covered by an incentive plan that includes an element of
individual performance.
Conditions
Remuneration to executive management and the Board is
described in Note 27 in the 2011 financial statement.
2 INTRODUCTION
7 DIRECTORS’ REPORT AND
18 FINANCIAL STATEMENTS
64 CORPORATE GOVERNANCE
76 FINANCIAL CALENDAR AND ADDRESSES
KONGSBERG Annual Report 2011 73