Petoro - a driving force on the Norwegian continental shelf

SDFI and Petoro annual report 2013

General meeting / Board of directors

General meeting

The Ministry of Petroleum and Energy, in the person of the minister, represents the government as sole owner and serves as the company’s general meeting and highest authority. Notice of general meetings is issued in accordance with the provisions of the Norwegian Limited Liability Companies Act relating to state-owned companies. The annual general meeting is held before the end of June each year. It considers matters prescribed by Norwegian law, including amendments to the articles of association and approval of the annual accounts. The Petroleum Act lays down guidelines for issues to be considered by the company’s general meeting. Owner decisions are taken and resolutions adopted at the general meeting, which also elects the board of directors – with the exception of the worker directors ­– and the company’s external auditor. The board of directors of Petoro AS serves as the general meeting of Petoro Iceland AS.


Election of directors

The company is wholly state-owned, and is therefore subject to the government’s procedures for selecting directors. Directors are elected by the general meeting, which also determines the remuneration of all the directors. Worker directors are elected for two years at a time by and from among the employees. A special nomination committee is appointed for the election of worker directors.

Composition and independence of the board

Petoro’s board comprises seven directors, of whom five are elected by the general meeting. Two are elected by and from among the company’s employees. Three of the directors are women. Directors are elected for two-year terms. They have no commercial agreements or other financial relations with the company apart from the directors’ fees established by the general meeting and contracts of employment for the worker directors. All shareholder-elected directors are independent of the owner.
The board considers its composition to be appropriate in terms of expertise, capacity and diversity for following up the company’s goals and assignments. Each director and the board as a collective body seek to strengthen their expertise in various ways on a continuous basis. This is done through dedicated study programmes for the board and through participation in courses and conferences.

Work of the board

The board has overall responsibility for the management of Petoro, including ensuring that appropriate management and control systems are in place, and for exercising supervision of the day-to-day conduct of the company’s business. The work of the board is based on rules of procedure which describe its responsibilities and mode of working. The board met 12 times in 2013.

As an appendix to the instructions for its work, the board has adopted supplementary provisions for matters to be considered by it. An annual schedule of meetings has been established for the work of the board, with the emphasis on considering topical commercial issues and following up strategies, budgets and interim results. The board utilises a balanced scorecard system as a key instrument for monitoring results. This embraces financial/operational, organisational and relational aspects. The performance management model also covers both short- and long-term goals, quantitative as well as qualitative, and is well adapted to the company’s challenges.

The board considers major investment decisions within the portfolio, follow-up and consideration of activities in the licences, and monitoring of gas sales – including an assessment of the overall risk picture. The board has chosen to organise its work related to compensation through a sub-committee comprising two of the shareholder-elected directors, one of whom is the deputy chair. No other subcommittees have been established. The board has not found it appropriate to establish a separate audit committee. In the event of conflicts of interest, the practice has been for the director concerned to abstain from consideration of the matter by the board. Conflicts of interest are a fixed item on the agenda for the board’s meetings and consideration of matters.
An annual self-assessment is conducted by the board, embracing an evaluation of its own work and mode of working and of its collaboration with the company’s management. The board reviewed the company’s CSR, business ethics guidelines and board instructions in 2013.