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Nordic Nanovector is committed to healthy corporate governance practices, strengthening and maintaining confidence in the company, and thereby contributing to long-term value creation for shareholders and other stakeholders. Strong and sustainable corporate governance practices include ethical business practices, reliable financial reporting and compliance with legislation and regulations. The objective of corporate governance is to regulate the division of roles between shareholders, the board and executive management more comprehensively than is required by legislation.
Nordic Nanovector’s principles for corporate governance are based on the following key elements:
1. Implementation and reporting on corporate governance
Nordic Nanovector ASA’s board actively adheres to good corporate governance standards, in line with Norwegian laws and regulations, as well as international best practice standards. A corporate governance policy was adopted by the board in January 2015 and latest updated in December 2021. The policy is, in all material aspects based on the Norwegian Code of Practice for Corporate Governance (the Code), to which the board has resolved that the company shall adhere.
Nordic Nanovector ASA is a Norwegian-registered public limited liability company with its shares listed on the Oslo Stock Exchange. The Norwegian Accounting Act Section 3-3b, which the company is subject to, sets out certain corporate governance related information, which is to be disclosed and reported on through the issuance of an annual reporting document. This report meets the requirements provided by the Accounting Act. The Accounting Act is available on www.lovdata.no.
Further, the continuing obligations of stock exchange listed companies issued by the Oslo Stock Exchange requires listed companies to publish an annual statement of their practice related to their policy on corporate governance (cf. Oslo Rule Book II, section 4.4). In addition to setting out certain minimum requirements for such reporting (equivalent to those under the Accounting Act), the continuing obligations require that the company reports on its compliance with the recommendations of the Code. Both the continuing obligations and the Code require that an explanation is provided where a company has chosen an alternative approach to specific recommendations in the Code (i.e., the “comply or explain” principle). Nordic Nanovector complies with the current Code, most recently revised on 14 October 2021. The company provides a report on its principles for corporate governance in its annual report and on its website. The continuing obligations are available on www.oslobors.no and the Code is available on www.nues.no.
The board of Nordic Nanovector has, in close cooperation with the company’s executive management, adopted several corporate governance guidelines:
The governance documents set out principles for how business should be conducted, and these also apply to Nordic Nanovector’s subsidiaries. The Code covers 15 topics and this statement covers each of these topics and states Nordic Nanovector’s adherence to the Code.
Deviations from the Code: None
2. Business
Nordic Nanovector‘s business is clearly defined in the company’s articles of association as follows: “The objective of the company is to develop, market and sell medical products and equipment and to run business related thereto or associated therewith.”
The board is responsible for defining the company’s strategies, primary objectives and risk profiles and to support the company’s value creation to shareholders in a sustainable manner. These are taking into account financial, social and environmental considerations, are evaluated yearly and described in the annual report.
Deviations from the Code: None
3. Equity and dividends
The board shall ensure that the company has a capital structure that is suitable for its objectives, strategy and risk profile. Total issued share capital at 31 December 2021 amounted to NOK 19 615 676, divided into 98 078 380 shares, each with a par value of NOK 0.20. The equity ratio at 31 December 2021 was 47.4 per cent.
The board has established a clear and predictable dividend policy: the financial resources of Nordic Nanovector are directed towards the clinical development of Betalutin®, both as a stand-alone product and in combination with other treatments, further investigations in the company’s product pipeline and preparing for product launch. The company does not anticipate paying any cash dividend until sustainable profitability is achieved. The mandate to the board to increase Nordic Nanovector’s share capital is tied to defined purposes and limited in time no later than the date of the next AGM.
The AGM held 28 April 2021 granted an authorisation to increase the share capital by an amount limited to 20 per cent of the share capital, to be used to strengthen the company’s equity, for general corporate purposes, including but not limited to financing of acquisitions of other companies, businesses or assets including issuance of consideration shares in connection with the abovementioned transactions. In February 2021, the company completed a private placement, raising approximately gross NOK 361 million, through the use of the authorisation granted by an EGM held 21 October 2020. An EGM was held on 22 March 2021 to authorise a repair offering which was completed in April 2021, raising approximately gross NOK 61 million.
The AGM held 28 April 2021 further granted an authorisation to increase the share capital by an amount limited to NOK 75 000 at a subscription price corresponding to the par value of the shares. The authorisation may only be used to issue shares to members of the company’s board, who have elected to receive all or part of their board remuneration in the form of restricted stock units (RSUs). The authorisation is valid until 28 April 2023. In 2021, the authorisation was used to issue 51 966 new shares to one former and two current board members that have exercised RSUs. The number of RSUs currently outstanding is 73 892.
The extraordinary general meeting (the “EGM”) held on 20 December 2017 approved the company’s new share based incentive programme. In 2021, the AGM authorised the board to grant up to 1 500 000 perfomance share units (PSUs) to the company’s employees. The AGM further resolved to issue up to 1 500 000 free-standing warrants to employees that were awarded PSUs. The sole purpose of the free-standing warrants is to ensure delivery of shares in the company upon exercise of the PSUs and the options. The free-standing warrants do not give the PSU holders or the option holders a right to subscribe for any additional shares in the company. See note 6.3 in the annual accounts of this annual report for information about the number of options, PSUs and free-standing warrants that are outstanding and their terms and conditions.
Deviations from the Code: None
4. Equal treatment of shareholders
It is the company’s policy to treat all shareholders equally. Nordic Nanovector 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. The nominal value of each share is NOK 0.20.
If the board resolves to carry out a share issue without pre-emption rights for existing shareholders, then the justification shall be publicly disclosed in a stock exchange announcement issued in connection with the share issue.
Deviations from the Code: None
5. Shares and negotiability
There are no restrictions related to owning, trading or voting for shares in Nordic Nanovector.
Deviations from the Code: None
6. General meetings
The board ensures that the company’s shareholders can participate in the company’s general meetings, and that the general meetings are an effective forum for the views of shareholders and the board. The chair of the board, the CEO and CFO are present at the AGMs, along with the chair of the nomination committee and the company auditor.
The board ensures that:
Shareholders who are unable to participate themselves may cast a vote on each agenda item electronically or vote by proxy.
The notice of the general meeting includes information regarding shareholders’ rights and guidelines for registering and voting at the general meeting. The company provides information on the procedure for representation at the general meeting through proxy, and a proxy form which allows separate voting instructions for each individual matter, including on each individual candidate nominated for election, is attached to the notice.
Deviations from the Code: With six out of seven board members located outside of Norway, not all board directors participate in the AGM following practical and cost related considerations.
7. Nomination committee
The nomination committee is laid down in the company’s articles of association and the general meeting has stipulated guidelines for the duties of the nomination committee.
The nomination committee consists of three members. The general meeting elects the members of the nomination committee, its chair and determines the committee’s remuneration. The majority of the members shall be independent of the board and the management. The nomination committee shall not include the any executive personnel or any member of the company’s board of directors.
All shareholders are invited to propose candidates for the board and the nomination committee. Information about the procedure is available at www.nordicnanovector.com/our-company/leadership/nomination-committee/nominations.
The AGM held 28 April 2021, re-elected Johan Christenson (chair), Egil Bodd and Pål Erik Robinson as members of the nomination committee for a period until the AGM in 2022.
The nomination committee’s duties include proposing candidates for election to the board and the nomination committee and proposing fees to be paid to such members.
Deviations from the Code: None
8. Composition and independence of the board
Article 5 of Nordic Nanovector’s articles of association states that the company’s board shall consist of three to nine members and that the members shall serve for a term that ends at the next AGM. All the board members are consequently up for election at the next AGM.
The composition of the board shall ensure that it can act independently of any special interests. The board consists of; Jan H. Egberts (chair), Jean-Pierre Bizzari, Joanna Horobin, Per Samuelsson, Karin Meyer, Solveig Hellebust and Rainer Boehm.
Jan H. Egberts (chair), Jean-Pierre Bizzari, Karin Meyer, Joanna Horobin, Solveig Hellebust and Rainer Boehm, are independent of the company’s executive personnel, material business contacts and the company’s major shareholder(s). Per Samuelsson is independent of the company’s executive personnel and material business contacts.
The biographies of the board members are presented on the company’s website and the board members’ shareholding in Nordic Nanovector ASA is disclosed in note 6.4 to the annual accounts. An overview of the board members’ attendance at board meetings is included in their respective biographies in the annual report.
Deviations from the Code: None
9. The work of the board
The board has issued instructions for its own work, as well as for the executive management with particular emphasis on clear internal allocation of responsibilities and duties. These instructions state how the board and executive management shall handle agreements with related parties, including whether an independent valuation must be obtained. The board shall also present any such agreements in their annual report. The board evaluates annually its performance and expertise based on work performed and experiences gained in the previous year.
Members of the board and executive management are obliged to notify the board if they have a significant, direct or indirect, interest in items to be considered by the board. An overview of any transactions with related parties will be included in the annual report.
The board has established an audit committee consisting of Karin Meyer (chair), Jan H. Egberts and Per Samuelsson for the thorough and independent handling of questions concerning accounting, audit and finance. The audit committee is also advisory and preparatory for the full board in questions related to accounting, audit and finance. The board has established a compensation committee consisting of Per Samuelsson (chair), Joanna Horobin, and Solveig Hellebust, which is a preparatory and advisory committee for the board in questions relating to the company’s compensation of the executive management. The board has also established a clinical committee consisting of Jean-Pierre Bizzari (chair), Rainer Boehm and Joanna Horobin. The board has also established instructions for the committees and the CEO.
Deviations from the Code: None
10. Risk management and internal control
The board ensures that the company has sound internal controls in place and systems for risk management that are appropriate in relation to the extent and nature of the company’s activities. In addition to the annual risk assessment, the management presents quarterly financial statements that will inform the board and shareholders on current business performance, including risks. These reports are reviewed by the board. Significant risks include strategic risks, financial risks, liquidity risks and operational risks including risks related to development of products. The company’s significant risks are assessed on an ongoing basis and at least once a year by the board.
The company’s finance function is responsible for the preparation of the financial statements and to ensure that these are prepared and reported according to applicable laws and regulations and in accordance with IFRS as adopted by EU. The audit committee performs reviews of the quarterly and annual financial statements with special focus on transaction types, which includes judgments, estimates or issues with major impact on the financial statement. Management controls are performed at a senior level in the company.
Deviations from the Code: None
11. Remuneration of the board
The remuneration of the board is proposed by the nomination committee and decided by the shareholders at the AGM of the company. The level of remuneration of the board reflects the responsibility of the board, its expertise and the level of activity in both the board and any board committees. The company has not granted share options to board members. The company has, however, granted restricted stock units (RSUs) to board members that have elected to receive all or part of their remuneration determined by the AGM in advance in the form of restricted stock units. The number of restricted stock units allocated to the board members is determined based on the volume weighted share price ten trading days prior to the AGM. The remuneration of the board is thus not linked to the company’s performance. If board members, or companies associated with board members, take on specific assignments for the company in addition to their appointments as board members, this will be reported to the board and the board will approve the remuneration for such additional duties.
Deviations from the Code: None
12. Salary and other remuneration of executive personnel
The board has established guidelines on the salary and other remuneration for executive personnel that are clear and easily understandable, and contribute to the company’s commercial strategy, long-term interests and financial viability. The performance-related remuneration of the executive personnel, such as equity incentives and bonus programmes, are linked to value creation for shareholders. The annual bonus element is subject to an absolute limit of 55 per cent for the company’s CEO and 45 per cent for other executives. These guidelines are included in the Remuneration Report for 2021.
Deviations from the Code: None
13. Information and communications
Nordic Nanovector is committed to treat all shareholders equally and will provide timely and precise information about the company and its operations to its shareholders, the Oslo Stock Exchange and the financial markets in general through the Oslo Stock Exchange’s information system. Such information will be given in the form of annual reports, quarterly reports, press releases, notices to the stock exchange, capital market days and investor presentations.
The board has established several guidelines related to the company’s disclosure of information to the financial markets and for the contact with shareholders, as mentioned in section 1 above.
The company publishes a financial calendar with an overview of the dates for important events, such as the AGMs and release of interim reports.
Deviations from the Code: None
14. Take-overs
The board has established guiding principles for how it will act in the event of a takeover offer. The board will not attempt to influence, hinder or complicate the submission of bids for the acquisition of the company’s operations or shares, or prevent the execution thereof. The board will help ensure that shareholders are treated equally. If a takeover offer is made, the board will obtain a valuation from an independent expert and issue a recommendation as to whether shareholders should accept the offer.
Deviations from the Code: None
15. Auditor
The board ensures that the company’s auditor on an annual basis presents to the audit committee the main features of the plan for the performance of the audit work. The auditor participates in meetings with the board that deals with the annual financial statements and, at least once a year, carries out a review of the company’s procedures for internal control in collaboration with the audit committee. In addition, the external auditor meets with the board, without management being present, at least once per year.
Deviations from the Code: None
Approved by the board of directors on 05 April 2022.
