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The Norwegian Corporate Governance Board - NUES (Norsk Utvalg for Eierstyring og Selskapsledelse) - awards a prize every autumn to the company listed on Oslo Børs that the Board wishes to recognise for the quality its report on corporate governance in the previous year’s annual report. The purpose of the prize is to create a greater awareness of corporate governance in general, and to promote the Norwegian Code of Practice for Corporate Governance in particular. NUES also hopes that the award of an annual prize will serve to inspire listed companies that are looking to improve their corporate governance reporting.
NUES is supported in its work on identifying candidates for the prize by the accounting firms Deloitte, Ernst & Young, KPMG, BDO Noraudit and PricewaterhouseCoopers, all of which put forward companies for consideration. On the basis of the input provided by these firms, NUES has evaluated which company should receive this year’s prize. The Board was assisted in its evaluation of this year’s candidates by Finn Berg Jacobsen of BA-HR, and Arthur Sletteberg of Ferd AS.
In awarding the prize, the Board has paid particular attention to the following factors:
- How well the board of directors has complied with the Norwegian Code of Practice for Corporate Governance which states at Section 1 that: “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 extent to which the overall presentation of the report helps shareholders and other parties to evaluate the company’s compliance with the principles of good corporate governance.
The winner of this year’s prize
In its work this year, NUES was pleased to review a number of good quality, systematic and readily accessible reports. Most of the reports it considered followed the structure of the Code of Practice, but there were also some good reports that chose a different structure. There is a clear increase in the number of companies producing very good reports. The best reports seen provide a comprehensive and precise account of the company’s corporate governance, with little reliance on references to other sources and an explanation of the progress the company is making from year to year. A number of companies provided a high standard of comprehensive information both in the annual report and on their websites, and this makes it easier for shareholders to evaluate how these companies address corporate governance issues.
In addition to the winner of this year’s prize, NUES would like to make honourable mention of two other companies. BWG Homes provided very good account of the expertise and independence of its board of directors in Section 8 on the work of the board. Moreover, the company produced the best overall report among the small and medium-sized companies listed on Oslo Børs. Kongsberg Gruppen again produced a report characterised by its consistent precision and quality. Section 12 of this company’s report on the remuneration of its executive management attained a standard to which other companies could aspire.
The winner of this year’s prize is DnB NOR ASA. The company has made progress in its corporate governance reporting every year, and it received honourable mention last year. Its report is thorough and precise. NUES found that several sections of the report were among the best in their area: Section 3 on the company’s equity, Section 4 on the equal treatment of shareholders and transactions with close associates, Section 9 on the work of the board and Section 10 on risk management attained what NUES considers to be very high and market leading standards. One deviation from the Code of Practice (Section 14 on take-overs) was properly explained.
NUES therefore awards this year’s prize for the best corporate governance report to DnB NOR ASA.
