The board of directors must provide a report on the company’s corporate governance in the annual report. The report must cover every section of the Code of Practice. If the company does not fully comply with this Code of Practice, this must be explained in the report.
The board of directors should define the company’s basic corporate values and formulate ethical guidelines and guidelines for corporate social responsibility in accordance with these values.
Commentary:
The requirement for reporting corporate governance is based on the “comply or explain” principle as explained in the introduction.
Publishing an overview of all aspects of corporate governance will make it easier for shareholders and other interested parties to evaluate the extent to which the company follows the principles of good corporate governance. However, the overview may refer to more detailed information elsewhere in the annual report or on the company’s web site.
Corporate values represent an important foundation for corporate governance. A company’s corporate values, together with its ethical guidelines and guidelines for corporate social responsibility, may play a significant role in the way the company is perceived.
At the core of the concept of corporate social responsibility is the company’s responsibility for the manner in which its activities affect people, society and the environment, and it typically addresses human rights, prevention of corruption, employee rights, health and safety and the working environment, and discrimination, as well as environmental issues.
| This Code of Practice for corporate governance applies in addition to any other guidelines for the company’s activities, cf. inter alia the Public Limited Liability Companies Act (Allmennaksjeloven – hereinafter “Asal.” or the “Public Companies Act”) § 6-12 and any formal instructions for executive management, cf. Asal. § 6-13.
Companies listed on Oslo Børs must publish a comprehensive report on the company’s corporate governance, cf. ‘Continuing obligations of stock exchange listed companies’, Section 7. The rules also require that companies must provide an explanation of any matters where they do not comply with the Norwegian Code of Practice for Corporate Governance. Companies that apply for listing on Oslo Børs must as part of the application confirm that the company complies with the Norwegian Code of Practice for Corporate Governance or explain any deviation therefrom (or the equivalent code for foreign companies that comply with a code of practice in the state in which they are registered or the code of practice that applies to the primary market for their shares), cf. Listing rules for shares, Section 3.4, third paragraph, Item 30, Section 9.1, second paragraph, Item 3 and Section 9.2, second paragraph, Item 5, in respect of listing on Oslo Børs. These rules also apply to companies listed on, or subject to an application for admission to listing on, Oslo Axess. An EEA prospectus for an offer for subscription or purchase or for admission to listing on a regulated market must include a statement as to whether or not the issuer complies with the national code of practice for corporate governance in its country of incorporation, cf. Securities Trading Act Regulations § 7-13, equivalent to Commission Regulation (EU) No. 809/2004, Annex 1, Item 16.4. The same provision requires that if the issuer does not comply with the relevant code of practice, a statement to that effect must be included together with an explanation of why the issuer does not comply with the code. The Accounting Act (Regnskapsloven) § 3-3b stipulates that companies must provide a report on their policies and practices for corporate governance either in the annual report or in a document referred to in the annual report, and this must include a justification for any deviation from the code of practice or rules for corporate governance to which the company is subject. |