8. The Corporate Assembly and the Board of Directors, composition and independence
Under the Public Limited Companies Act and Article 10 of Orkla’s Articles of Association, it is the task of the Corporate Assembly to exercise control and oversight of the company and the Board of Directors, and to elect the Board of Directors and the Board Chair.
It also elects the Deputy Chair of the Board of Directors. On 30 April 2012, the Deputy Chair of the Board of Directors was appointed as acting general manager and CEO, and consequently had to resign from the Board of Directors. Since then, the Board of Directors has had no deputy chair. As prescribed by law, the Corporate Assembly elects its Chair and has a permanent Deputy Chair. The Corporate Assembly normally convenes three times a year, and its composition is intended to ensure that it represents a broad cross-section of the company’s shareholders. As from 2008, the General Meeting determined that shareholderelected members and deputy members are to serve a term of one year, based on the rationale that an annual assessment of the overall composition of the Corporate Assembly will ensure greater flexibility. A proposal will be submitted to the 2013 General Meeting to discontinue the Corporate Assembly in accordance with the agreement concluded with the employee organisations, and to amend the provisions of the Articles of Association regarding the Corporate Assembly. It is proposed that the Corporate Assembly be discontinued immediately after it has elected shareholder-elected members to the Board of Directors and Board Chair.
The composition of the Board of Directors is intended to serve the interests of all the shareholders and meet the company’s need for competence, capacity and diversity. The Board’s composition meets the requirements of the Norwegian Code of Practice for Corporate Governance as regards Board members’ independence of the company’s executive management, main shareholders and material business relationships. Three of the Board members are defined as non-independent of the company’s main shareholders. All the Board members are defined as independent of the company’s executive management or material business relationships. There are few instances in which Board members are disqualified from considering Board matters. Representatives of the executive management are not members of the company’s Board of Directors.
Under Article 4 of Orkla’s Articles of Association, the Chair, the Deputy Chair and the other shareholder-elected members of the Board may be elected for a term of up to two years. Since 2007, the Nomination Committee has practised a term of one year for shareholder- elected members and deputy members, on the grounds that an annual assessment of the overall composition of the Board will ensure greater flexibility. There are no other provisions in the Articles of Association governing the appointment and replacement of Board members, except for Article 10, which prescribes further rules for appointing a new Board member or a substitute if a Board member is prevented from serving for a long period of time or dies.
Further pursuant to Article 4 of Orkla’s Articles of Association, the shareholderelected members of the Board of Directors are required to own shares in the company with a view to strengthening the shared financial interests of shareholders and Board members. A more detailed description of the number of Orkla shares owned by each member of the Board, their background, qualifications, term of service and independence, how long they have been an Orkla Board member and any material functions in other companies and organisations is provided in the PDF "The Board of Directors of Orkla ASA" below. Information regarding each Board member’s attendance at Board meetings is also provided there.
Under Norwegian law and in accordance with Orkla’s current system of corporate democracy, Group employees have the right to elect seven of the 21 members of the Corporate Assembly of Orkla ASA. Similarly, Group employees have the right to elect three members of the Board of Directors of Orkla ASA, and two observers. If the agreement to discontinue the Corporate Assembly comes into effect, one of the observers will change status and become a Board member. A description of the composition of the company’s governing bodies is provided in the PDF below.