Corporate governance principles

This document is adopted to secure that B2 Impact ASA (“B2 Impact” or the “Company”, and together with its consolidated subsidiaries the “Group”) complies with applicable regulations regarding the Company’s business.

The corporate governance principles (the “Corporate Governance Principles”) included herein are subject to the annual review by the Board of B2 Impact.
This document is solely for the internal use of the Group, and no one other than B2 Impact can invoke breach of the content. Breaches of the content can however lead to sanctions from public authorities if the action also is a breach of any public regulations.

1. Governance principles

B2 Impact considers good corporate governance to be a prerequisite for value creation and trustworthiness and for access to capital.

In order to secure strong and sustainable corporate governance, it is important that B2 Impact ensures good and healthy business practices, reliable financial reporting and an environment of compliance with legislation and regulations across the Group.

B2 Impact has governance documents setting out principles for how business should be conducted. These apply to all B2 Impact subsidiaries and units. References to certain more specific policies are included in this corporate governance principle where relevant. The B2 Impact governance regime is approved by the board of directors in B2 Impact (the “Board”).

2. Applicable rules and regulations

B2 Impact is incorporated and registered in Norway and is subject to Norwegian law. The B2 Impact shares are listed on Oslo Børs under the ticker "B2H". As an issuer of shares, the Company must comply with rules regarding Oslo Børs and rules regarding public limited companies.

The Company endorses the Norwegian Code of Practice for Corporate Governance (Norwegian: “Norsk anbefaling for eierstyring og selskapsledelse”), issued by the Norwegian Corporate Governance Board, most recently revised on 17 October 2018 (the “Code”).

The Code is based on “the comply or explain principle” whereby listed companies must comply with the Code or explain why they have chosen an alternative approach. B2 Impact will follow the Code, and any deviation from the Code will be included in a statement of policy on corporate governance included in the annual report. A description of the most important corporate governance principles of the Company shall also be made available for external interest groups on the Company’s website in accordance with the Company’s IR-policy.

3. Main objectives for Corporate Governance in B2 Impact 

B2 Impact’s Corporate Governance Principles are based on the Code, and as such is designed to establish a basis for good corporate governance, to support achievement of the Company’s core objectives on behalf of its shareholders, including the achievement of sustainable profitability for the shareholders of B2 Impact. The manner in which B2 Impact is governed is vital to the development of its value over time.

B2 Impact believes good corporate governance involves openness and trustful cooperation between all parties involved in the Group: the owners, the Board and executive management (the “Management”), employees, customers, debtors, vendors, public authorities, other stakeholders and society in general.

By pursuing the Corporate Governance Principles, approved by the Board of B2 Impact, the Board and Management shall contribute to achieving the following objectives:

• Openness
  Communication with the stakeholders and other interest groups of B2 Impact shall be based on openness in issues relevant to the evaluation of the development and position of the Company.
• Independence
  The relationship between the Board, the Management and the owners shall be based on independence. Independence shall ensure that decisions are made on an unbiased and neutral basis.
• Equal treatment
  One of B2 Impact’s prime objectives is equal treatment and equal rights for all shareholders.
• Control and management
  Good control and corporate governance mechanisms shall contribute to achieving predictability and reducing the level of risks for owners and other interest groups.

The development of, and improvements in, the Company’s Corporate Governance Principles are an on-going and important process that the Board intends to focus on.

4. Business

The operations of the Company and its subsidiaries shall be in compliance with the licenses required in relevant jurisdictions and from the Norwegian Financial Supervisory Authority (the “NFSA”) if applicable and the Company's business objective set forth in its Articles of Association (the “Articles of Association), which shall be stated in the Company’s annual report together with the Group’s primary objectives and strategies.

The Company’s business objective in the Article of Association reads as follows: “The Company’s business operation is investment, participation and administration of other companies within the business of investment in, administration of and collection of receivables and other thereto related business.”

5. Equity and dividends

5.1 Capital adequacy

The Board is responsible for ensuring that the Group is adequately capitalised relative to the risk and scope of operations in the various jurisdictions and that the capital requirements set forth in laws and regulations and licenses are met.
The Board shall continuously monitor the Group’s capital situation and shall immediately take adequate steps should it be apparent at any time that the Company’s equity or liquidity is less than adequate.

5.2 Dividend policy

The Company shall, at all times, have a clear and predictable dividend policy established by the Board. The dividend policy forms the basis for the board of directors’ proposals on dividend payments to the Company’s general meeting and shall be disclosed.

5.3 Authorisations to the board of directors

Any authorisations granted to the Board to increase the Company’s share capital shall be restricted to defined purposes. When the general meeting is to pass resolutions on authorisations to the Board for the increase of share capital for different purposes, each such authorisation shall be considered and resolved separately by the general meeting. Authorisations granted to the Board to increase the share capital or purchase treasury shares shall be limited in time, and shall in no event last longer than until the Company’s next annual general meeting.

6. Equal treatment of shareholders and transactions with close associates

6.1 Basic principles

The Company has only one class of shares. Each share in the Company carries one vote, and all shares carry equal rights, including the right to participate in general meetings. All shareholders shall be treated on an equal basis, unless there is just cause for treating them differently.

6.1.1 Share issues without pre-emption rights for existing shareholders

In the event of an increase in share capital through the issue of new shares, a decision to waive the existing shareholders’ pre-emptive rights to subscribe for shares shall be justified. Where the Board resolves to issue shares and waive the pre-emptive rights of existing shareholders pursuant to an authorisation granted to the Board by the general meeting, the justification will be publicly disclosed in a stock exchange announcement issued in connection with the shares issuance.

6.1.2 Transactions in treasury shares

Any transactions carried out by the Company in its treasury shares shall be carried out through Oslo Børs, and in any case to prevailing stock exchange prices. In the event that there is limited liquidity in the Company’s shares, the Company will consider other ways to cater for equal treatment of shareholders.

6.2 Approval of agreements with shareholders and other close associates

In the event of transactions that are considered to be not immaterial between the Company and its shareholders, a shareholder’s parent Company, members of the Board, executive personnel or close associates to any such party, the Board shall arrange for an independent third-party valuation. This will, however, not apply for transactions that are subject to the approval of the general meeting pursuant to the provisions in the Norwegian Public Limited Companies Act. Independent valuations shall also be procured for transactions between companies within the Group if any of the companies involved have minority shareholders.

Members of the Board and executive personnel must notify the Board when such members have any significant, direct or indirect, interest in a transaction carried out by the Company.

7. Freely negotiable shares

The shares of the Company are freely negotiable.

8. General meetings

8.1 General meetings

8.1.1 Exercising rights

The Board shall ensure that as many of the Company’s shareholders as possible are able to exercise their voting rights in the Company’s general meetings, and that the general meetings are an effective forum for shareholders and the Board, which shall be facilitated through the following:

• the notice to the general meeting and any supporting documents, including the recommendation by the nomination committee, as well as information on the resolutions to be considered in the general meeting shall be available on the Company’s website no later than 21 days prior to the date of the general meeting;
• the resolutions and any supporting documentation shall be sufficiently detailed and comprehensive allowing shareholders to understand and form a view on all matters to be considered at the general meeting;
• deadlines for shareholders to give notice of their attendance at the general meeting shall be set as close to the date of the general meeting as practically possible;
• the Board and the chairperson of the general meeting shall ensure that the shareholders are able to vote separately on each candidate nominated for election to B2 Impact’s Board and other corporate bodies (if applicable);
• representatives of the Board shall be present at general meetings, while representatives of the nomination committee, the remuneration committee and the audit committee, as well as the auditor should be present at general meetings where matters of relevance for such committees/persons are on the agenda; and
• the Board shall make arrangements to ensure an independent chairperson for the general meeting.

8.1.2 Participation without being present

Shareholders who are unable to be present at the general meeting must be given the opportunity to vote by proxy. The Company shall in this respect:

• provide information on the procedure for attending by proxy;
• nominate a person who will be available to vote on behalf of shareholders as their proxy; and
• prepare a proxy form, which shall, insofar as this is possible, be set up so that it is possible to vote on each of the items on the agenda and candidates that are nominated for election.

9. Nomination committee

9.1 Composition

The Company shall have a nomination committee, cf. also the Company’s Articles of Association section 7. The Company’s general meeting elects the members and the chairman of the nomination committee and determines their remuneration.

A majority of the nomination committee shall be independent of the Company’s Board and Management. No more than one member of the nomination committee may also be a member of the Board, in which case such member shall not be re-elected to the Board. The Company's Chief Executive Officer (the “CEO”) and other members of the Management shall not be members of the nomination committee.

The objectives, responsibilities and functions of the committee shall be in compliance with rules and standards applicable to the Group and are described in the Company’s “Instructions for the Nomination Committee”. The general meeting shall adopt the instructions for the nomination committee. The Company shall provide information regarding the members of the nomination committee and deadlines for submitting proposals to the nomination committee.

9.2 Tasks

The nomination committee shall recommend candidates for the election of members and chairman of the Board, candidates for the election of members and chairman of the nomination committee, and remuneration of the Board and the nomination committee.

The nomination committee’s recommendation of candidates to the nomination committee shall ensure that they represent a broad cross-section of the Company's shareholders. The nomination committee’s recommendation of candidates to the Board shall ensure that the Board is composed to comply with legal requirements, the Code and these Corporate Governance Principles (cf. clause 10 below).

The proposals from the nomination committee shall include a reasoning for its proposal.

10. Board: Composition and independence

The composition of the Board should consider expertise, capacity and diversity appropriate to attend to the Company’s goals, main challenges and the common interests of all shareholders. Further, individuals of the Board should be willing and able to work as a team, resulting in the Board working effectively as a collegiate body.

The Board should be composed so that it can act independently of any special interests. A majority of the shareholder-elected members of the Board should be independent of the Management and material business connections of the Group. Further, at least two of the members of the Board should be independent of the Company’s major shareholder(s). For the purposes of these Corporate Governance Principles, a major shareholder shall mean a shareholder that owns or controls 10% or more of the Company’s shares or votes, and independence shall entail that there are no circumstances or relations that may be expected to be able to influence independent assessments of the person in question.

No member of the Company’s Management should be a member of the Board. The chairman of the Board is elected by the general meeting.

The term of office for members of the Board shall not be longer than two years at a time. Members of the Board may be re-elected.

The Company’s annual report will provide information regarding the expertise of the members of the Board, as well as information on their history of attendance at board meetings. Further, the annual report will identify the members of the Board that are considered to be independent.

Members of the Board are encouraged to own shares in the Company.

11. The work of the Board 

11.1 General

The Board will produce an annual schedule for its work, with particular focus on objectives, strategy and implementation. The Board will implement instructions for the Board and the CEO, focusing on determining allocation of internal responsibilities and duties. The objectives, responsibilities and functions of the Board and the CEO shall be in compliance with rules and standards applicable to the Group and are described in the Company’s “Rules of Procedure for the Board” and “Instructions for the CEO”.

The Board shall provide details of the appointment of board committees in the Company’s annual report.

11.2 Audit Committee

The Board shall have an audit committee. The duties and composition of the audit committee shall be in compliance with the Norwegian Public Limited Companies Act.

The committee is a working committee for the Board, preparing matters and acting in an advisory capacity.

The members of the audit committee are elected by and amongst the members of the Board for a term of up to two years. The committee members must have the overall competence required to fulfil their duties based on the organisation and operations of the Group. The entire Board shall not act as the Company’s audit committee. At least one member of the audit committee should be competent in respect of finance and audit and be independent of the Company.

The objectives, responsibilities and functions of the committee shall be in compliance with rules and standards applicable to the Group and are described in the Company’s “Instructions for the audit committee”.

11.3 Remuneration committee
The Board shall have a remuneration committee as a preparatory and advisory committee for the Board in questions relating to the Company’s remuneration of the Management. The purpose of the remuneration committee is to ensure thorough and independent preparation of matters relating to remuneration paid to the Management. The remuneration committee puts forth a recommendation for the Board’s guidelines for remuneration to senior executives in accordance with Section 6-16a of the Public Limited Companies Act.

The members of the remuneration committee are elected by and amongst the members of the Board for a term of up to two years and shall be independent of the Company’s Management.

See the Company’s “Instructions for the remuneration committee”.

11.3.1 Annual evaluations

The Board shall annually evaluate its performance and expertise in the previous year.

12. Investment Committee

The Company shall have an investment committee organised by the CEO which shall make certain investment decisions and act as a preparatory and advisory committee for the Board in questions relating to the Group’s investment strategy and key investment decisions. The purpose of the Investment Committee is to ensure thorough preparation of matters relating to the Group's potential investments and the performance of the Group's investments.

The Investment Committee shall consist of at least five members as further resolved by the CEO. The members of the Investment Committee shall comprise of members of the executive management like the Group’s Chief Executive Officer, the Group's Chief Investment Officer and key members of the executive management nominated by the Chief Executive Officer.

The objectives, responsibilities and functions of the committee shall be in compliance with rules and standards applicable to the Group and are described in the Company’s “Instructions for the Investment Committee”.

13. Risk management and internal control 

13.1 General

It is ultimately the responsibility of the Board to ensure that the Company has sound and appropriate internal control systems and risk management systems reflecting the extent and nature of the Company’s activities. Sound risk management is an important tool to create trust and enhance value generation. Internal control should ensure effective operations and prudent management of significant risks that could prevent the Group from attaining its targets. Internal controls and systems should also cover the Company’s corporate values, ethical guidelines and principles of corporate social responsibility.

As a part of B2 Impact’s risk management, the Board has developed and adopted a risk profile as further set out in the Company’s internal policies. The Group must not be associated with operations that could harm its reputation.

B2 Impact shall comply with all laws and regulations that apply to the Group’s business activities. The Group’s compliance policy describes the main principles for compliance and how the compliance function is organised.

13.2 Policies

The Company shall have a comprehensive set of relevant corporate manuals and procedures, which provides detailed descriptions of procedures covering all aspects of managing the operational business. The procedures and manuals shall be continuously revised to reflect best practice derived from experience or adopted through regulations.

B2 Impact has and will approve policies and guidelines in the following areas to support its objective in respect of internal control and risk management:

• Ethics, code of conduct;
• Corporate social responsibility;
• Risk management;
• Compliance;
• Communication;
• Financial management, including guidelines for quality assurance of financial reporting;
• People and organisation, including guidelines for variable remuneration; and
• Shareholder relations. 

13.3 Annual review and risk management in the annual report

The Board shall conduct an annual review of the Company’s most important areas of exposure to risk and such areas’ internal control arrangements.

The Board will describe the main features of the Company’s internal control and risk management systems connected to the Company’s financial reporting in the Company’s annual report. This covers the culture of control, risk assessment, controlling activities and culture information, communication and follow-up. The Board is obligated to ensure that it is updated on the Company’s financial situation, and continuously evaluate whether the Company’s equity and liquidity are adequate in terms of the risk from, and scope of, the Company’s activities, and shall immediately take the necessary action if it is demonstrated at any time that the Company’s capital or liquidity is inadequate. The Company shall focus on frequent and relevant management reporting to the Board of both operational and financial matters with the purpose of ensuring that the Board has sufficient information for decision-making and is able to respond quickly to changing conditions. Board meetings shall be held frequently and at least once a month. Financial performance shall be reported on a quarterly basis.

14. Remuneration of the Board

The remuneration of the Board is determined by the shareholders at the annual general meeting of the Company based on the proposal from the nomination committee. The level of remuneration of the Board should reflect the Board’ responsibility, expertise, the complexity of the Company, as well as time spent and the level of activity in both the Board and any board committees.

The remuneration of the Board shall not be linked to the Company’s performance and share options shall not be granted to members of the Board.

Board members, or companies associated with Board members, shall not engage in specific assignments for the Company in addition to their appointments as members of the Board. If they, nonetheless, do take on such assignments the entire Board must be informed and the consideration for such additional duties is subject to approval by the Board.

Any consideration paid to members of the Board in addition to their board remuneration shall be specifically identified in the annual report.

15. Remuneration of the Management

The Company’s guidelines for determining remunerations to the CEO and other members of the Company’s Management team should, at all times, support prevailing strategy and values. The total remuneration to the CEO and other senior executives may consist of basic salary (main element), share options, benefits in kind, discretionary bonus, pension and insurance schemes.

Performance-related remuneration of the Management in the form of share options, bonus programmes or similar shall be linked to value creation for shareholders or the Company’s profit over time. Such arrangements, including share option arrangements, shall incentivise performance and be based on quantifiable factors that the employee may influence. A cap should be set on performance-related remuneration.

The Board prepares guidelines for the remuneration of the Management. Such guidelines shall include the main principles for the Company’s remuneration policy and should contribute to aligning the interests of shareholders and Management. These guidelines shall be communicated to the annual general meeting.

16. Information and communications

16.1 General information

The Company shall continuously provide its shareholders, Oslo Børs and the financial markets in general (through Oslo Børs’ information system) with timely and precise information about the Company and its operations. Relevant information will be given in the form of annual reports, quarterly reports, press releases, notices to the stock exchange and investor presentations in accordance with what is deemed appropriate from time to time. The Company should clarify its long-term potential, including strategies, value drivers and risk factors. The Company shall maintain an open and proactive policy for investor relations, a website designed to incorporate “sound practices”, and shall give regular presentations in connection with annual and provisional results.

The Company shall publish an annual, electronic financial calendar with an overview of dates for important events, such as the annual general meeting, interim financial reports, public presentations and payment of dividends, if applicable.

Unless exceptions apply and are invoked, B2 Impact shall promptly disclose all inside information (as defined by the Norwegian Securities Trading Act). In all circumstances, B2 Impact will provide information about certain events, e.g. by the Board and general meeting concerning dividends, amalgamations, mergers/demergers or changes to the share capital, the issuing of subscription rights, convertible loans and all agreements of major importance that are entered into by B2 Impact and related parties.

Separate guidelines have been drawn up for handling of inside information, see “Instructions for handling of inside information” and “Rules for primary insiders”.

16.2 Information to shareholders

In addition to the Board’ dialogue with the Company’s shareholders in the general meetings, the Board should make suitable arrangements for shareholders to communicate with the Company at other times to enable the Board to develop a understand which matters affecting the Company from time to time are of particular concern to its shareholders. Communications with the shareholders should always be in compliance with the provisions of applicable laws and regulations and in consideration of the principle of equal treatment of the Company’s shareholders.

Information to B2 Impact’s shareholders will be published on its website simultaneously with being sent to the shareholders.

17. Take-overs

17.1 General

The Board shall have set out the main principles for its actions in the event of a take-over offer.

In a take-over process, the Board and Management each have an individual responsibility to ensure that the Company’s shareholders are treated equally and that there are no unnecessary interruptions to the Company’s business activities. The Board has a particular responsibility to ensure that the shareholders have sufficient information and time to assess the offer.

17.2 Main principles for action in the event of a take-over bid

In the event of a take-over process, the Board shall abide by the principles of the Code, and also ensure that the following take place:

• the Board will not seek to hinder or obstruct any takeover bid for the Company’s operations or shares unless there are particular reasons for doing so;
• the Board shall not undertake any actions intended to give shareholders or others an unreasonable advantage at the expense of other shareholders or the Company;
• the Board shall not institute measures with the intention of protecting the personal interests of its members at the expense of the interests of the shareholders; and
• the Board must be aware of the particular duty it has for ensuring that the values and interests of the shareholders are protected. 

In the event of a take-over bid, the Board will, in addition to complying with relevant legislation and regulations, seek to comply with the recommendations in the Code. This includes obtaining a valuation from an independent expert. On this basis, the Board will make a recommendation as to whether or not the shareholders should accept the bid.

There are no other written guidelines for procedures to be followed in the event of a takeover bid. The Group has not found it appropriate to draw up any explicit basic principles for B2 Impact’s conduct in the event of a takeover bid, other than the actions described above. The Board otherwise concurs with what is stated in the Code regarding this issue.

18. Statutory auditor

The Company’s auditor shall annually present the main features of the plan for work with the audit of the Company to the Board or the audit committee.

The auditor shall participate in meeting(s) of the Board where any of the following is on the agenda: the annual accounts, accounting principles, assessment of any important accounting estimates and matters of importance on which there has been disagreement between the auditor and the Company’s Management and/or the audit committee.

The auditor shall at least once a year present to the Board or the audit committee a review of the Company’s internal control procedures, including identification of weaknesses and proposals for improvement.

The audit committee shall hold a meeting with the auditor at least once a year at which no representative of the Management is present.

The Board shall specify the Management's right to use the auditor for other purposes than auditing taxes, VAT and internal transfer pricing across the Group.

The Board must report the remuneration paid to the auditor to the shareholders at the annual general meeting, including a break-down of the fee paid for audit work and fees paid for other specific assignments, if any.