Corporate Governance

Governing principles

Rieber & Søn is managed according to objectives and governing principles that shall ensure openness, integrity and accountability.

Openness is assured through a flow of correct information between business units, the Management and the Board of Directors, and to the various interested parties. Integrity is achieved through the establishment of uniform norms and regulations and by following moral and ethical principles. In relation to accountability, we strive to have a correct division of responsibility between the various levels of the organisation.

The Board of Directors of Rieber & Søn ASA considers that the company’s principles of Corporate Governance are in line with the recommended Norwegian code of practice of 21. October 2009. The company’s value base is clearly defined and ethical guidelines have been prepared on this basis.

Rieber & Søn’s compliance with the various aspects of the recommendation may be summarised as follows:

Rieber & Søn’s set of values

•Our customers, employees, shareholders and the public at large can rely on us

•We are open and trustworthy as regards communication and attitudes to individuals and groups

•We are innovative and interested in finding better solutions and new ways of dealing with challenges

•Our products and ideas inspire the consumer to serve tasteful dishes in an easier way

Communications and equal treatment of shareholders

The company emphasises the importance of giving correct and detailed information about its financial and commercial position. This is done through quarterly and annual reports, investor presentations and regular contact with analysts and the press.

Rieber & Søn ASA has strict requirements concerning the presentation of information and the equal treatment of all shareholders. As a listed company, Rieber & Søn ASA observes the strict standard set by the Oslo Stock Exchange in this area. The company also has an Investor Relations function which attends to shareholder matters and the requirements of the market for information in a professional and appropriate manner.

Annual General Meeting (AGM)

The AGM exercises the highest authority in the company, and among its functions it elects the members and deputy members of the Board of Directors. The company has only one class of shares, and all shares carry the same shareholder rights. Where shareholders are prevented from attending the AGM, they may vote by proxy.

Nomination Committee

The company has a Nomination Committee which proposes candidates for election to the Board of Directors by the AGM. The Nomination Committee has three members who are elected by the AGM for a period of two years.

In proposing the composition of the Board of Directors, the Nomination Committee attaches importance to experience, competence and diversity, with representation from the food industry and consumer products, as well as finance and strategy, and incorporating geographical diversity. The Nomination Committee’s recommendation is attached to the Notice of Meeting convening the AGM and in addition to personal information it contains details of the candidates’ educational, professional experience and positions of trust held.

Remuneration to Rieber & Søn’s Board of Directors, Board-appointed committees and the Nomination Committee is adopted by the AGM based on a recommendation from the Nomination Committee. The same remuneration is paid to all Board members, apart from the remuneration to the Chairman and the Vice Chairman, and committee work is remunerated separately.

The Board of Directors

According to the Articles of Association, the Board shall have a minimum of seven and a maximum of ten members. The period of service is two years. The Chairman is elected by the Board itself. The present Board of Directors of Rieber & Søn ASA has eight members, three of whom are employee-elected members. The additional representation of an employee-elected Board member is due to the winding up of the Corporate Assembly in 2006. Details of the Board members appear in the Annual Report.

The Board has established board instructions and an annual plan. The Board also has three sub-groups - the Compensation Committee, the Audit Committee and the Strategy Committee.

Each year, a strategy process is carried out which results in a strategy plan for the coming periods. The Annual Report gives an account of the company’s strategy and areas of focus.

The Board of Directors of Rieber & Søn is very conscious of its responsibilities in relation to the management and supervision of the Company’s activities. The Board is responsible for the strategic development of the Group, and in this connection it has established internal procedures and controls to ensure that the business is run within the parameters and in accordance with the strategies approved by the Board. The Board ensures that it is fully informed about the financial position of the company at all times and is responsible for drawing up plans and budgets for the Company’s business activities.

The Board of Directors appoints the CEO and determines his/her remuneration and the systems of remuneration for the Management. Each year the Board makes an assessment of its work and of the Management. The Group Management also makes an overall assessment of the Board’s work and its co-operation with the Group Management.

Independence

Each year, the Board of Directors reviews matters related to dependence/independence. Except for employee representatives, there is no personal dependence and there are no economic, family or personal links between the members of the Board and the Group Management.

Remuneration to senior employees

The Board of Directors takes a positive view of ownership of shares in the company by Board members, the Management and other employees, and for several years it has been instrumental in selling the company’s shares to the employees.

The Board’s declaration on salaries and other remuneration to senior employees, as well as the notes to the accounts, contain information pertaining to specific remuneration to the Group Management and bonus schemes for other senior employees. The salary and other remuneration to the CEO are set by the Board.

Control functions

The company carries out control functions in all business units. It also has a central accounting and finance department with responsibility for drawing up internal control and reporting guidelines. The accounting and finance departments ensure that the company is in compliance with current laws and regulations, and that the parameters and strategies set by the Board are followed.

Good systems contribute to good controls and reporting, and an ERP system has been installed in order to strengthen work in this area.

Equity

The company’s equity is adapted to meet the company’s objectives, strategy and risk profile, and this is communicated to the market. At the same time there is a wish to limit the amount of capital employed. The company endeavours to pay back to the shareholders capital which is in excess of the amount needed to meet current strategic objectives. In this connection, reference is made to the extraordinary dividend that was paid in both 2003 and 2005, and to the extraordinary dividend that is proposed for 2010.

In exercising its authorisation given by the AGM to increase the share capital, the Board will be cautious in departing from the principle which gives existing shareholders a preferential right to subscribe for shares. Similarly, where the authorisation to buy back shares is exercised, the Board will be cautious in departing from the principle whereby the company buys back its own shares in the market at the market price. Any departure from this principle shall be on the grounds that it is in the best interests of the company and the shareholders.

Dividend

The Board of Directors has a clearly defined and predictable dividend policy which forms the basis of the dividend proposed to the AGM.

Auditing

On presentation of the auditor’s report, the Auditor submits a declaration of independence and objectivity to the Board. The auditor attends the Board meeting which adopts the annual accounts. In this connection, a separate meeting is held between the Board and the auditor which is not attended by the management. The auditor also attends the AGM. The auditor participates at meetings of the Board-appointed Audit Committee to present special problems and conclusions related to the audit.

The company has guidelines governing the role of the auditor as a company advisor. The notes to the accounts contain full disclosure of remuneration to the auditor, split between auditing and other additional services.