1. Role of the Board and Management
The Board of Directors is elected by the shareholders to oversee the management and to assure that the long-term interests of the share-holders and other stakeholders are being served.
2. Functions of the Board
Areas of responsibility: In addition to its general oversight of management, the Board also performs a number of specific functions, including:
- reviewing, approving and monitoring fundamental business and financial strategies and major corporate actions;
- selecting, hiring and determining the compensation of the CEO, setting his/her goals and ensuring his/her development;
- reviewing control routines within among other; the accounting, controlling, IT and budgeting functions;
- assessing major risks facing the Company and reviewing mitigating options;
- providing counsel on the selection, evaluation and development of senior management; and
- ensuring processes are in place for maintaining the integrity of the Company.
Evaluation of TOMRA personnel and management: In order to meet the Company’s goals, every employee including top management, completes an annual Performance Evaluation with their manager. Job Discussions between managers and their subordinates are held in order to define goals to be reached in the coming year. On a regular basis, the Board completes a systematic review of top management, including an annual evaluation of the CEO. Through these processes, the Board seeks to ensure that all employees and management are focused on developing the Company in a coordinated way.
Board meetings: The Board holds 6-8 regular meetings per year. At least one of these meetings should be held at TOMRA subsidiaries abroad and are tied to specific, strategic market opportunities. Given the extensive time required for TOMRA Board activities, TOMRA Board members are encouraged to restrict themselves to a maximum of five major board memberships.
3. Board Committees
The Board will at all times have an Audit Committee, a Compensation and Organizational Development Committee, a Nomination Committee, a Corporate Responsibility Committee and any other committees the Board deems appropriate. Each Committee will perform its duties as assigned by the Board and in compliance with the Committee's charter.
Audit Committee: The Audit Committee, which must consists of two external, non-executive Directors, is appointed by the Board to assist it in fulfilling its responsibilities to oversee the Company’s internal accounting and audit processes, in monitoring the annual and interim financial reporting and assessing the independence of the external auditors. The Committee also provides guidance in identifying, understanding and assessing the Company’s operational and financial risk.
Compensation and Organizational Development Committee: This committee, which consists of minimum two external, non-executive Directors, assists the Board in fulfilling its responsibilities to determine the compensation policy of TOMRA, the compensation of the CEO of TOMRA, any share option programs and pension programs for TOMRA management, and any bonus system and pension programs for TOMRA employees. The Committee also monitors the implementation of the TOMRA compensation policy. In addition to compensation planning, the Committee monitors sustainable leadership planning and development.
Nomination Committee: The Committee, which consists of two to four external and independent representatives, is appointed by the Annual General Assembly to evaluate and nominate new candidates for the Board, for election by the Annual General Assembly. For further information see also TOMRA's Nomination Committee Charter.
Corporate Responsibility Committee: The Corporate Responsibility Committee, which must consists of two external non-executive Directors, is appointed by the Board to assist the Board in fulfilling its responsibility to review the Group's environmental, social and ethical practices and determine its policy as well as assess possible risks in these areas.
4. Size and Selection of Board
The Board believes six to eight members is an appropriate size based on the Company’s present activity and business complexity. TOMRA’s Board of Directors is currently made up of five non-executive members and two members elected from and among TOMRA employees in Norway in compliance with Norwegian regulations. External Board members, including the Board Chair, are directly elected by the Company’s shareholders.
5. Independence of Board of Directors
All external Directors will be independent. To be defined as independent, an external Director:
- must not have been employed by the Company in the previous three years;
- must not have any common interests with other Board members or the CEO; and
- must not have, or represent, significant business relationships with the Company.
6. Compensation of the Board of Directors
The Nominating Committee annually reviews and recommends the form and amount of Board member compensation, to be agreed by the Annual General Assembly.
In recent years it has been TOMRA practice to pay the external Directors a fixed monetary compensation. The employee members of the Board are paid a lower fixed amount, since it is assumed that Board work is undertaken during work hours paid by TOMRA. Remuneration for both external and internal Directors may also incorporate stock options and other forms of compensation.
7. Self–Evaluation of Board of Directors
The Board and each of its committees conduct an annual self-performance evaluation to determine whether the Board and each of its committees are functioning effectively. The review is discussed in the full Board once a year.
8. Ethics and Conflicts of Interest
The Board expects TOMRA Directors, as well as officers and employees, to act ethically at all times and to acknowledge their adherence to Tomra Group Code of Conduct and the Company’s Core Values. If an actual or a potential conflict of interest arises for a Director, the Director shall promptly inform the Board Chair or the CEO. If a significant conflict exists and cannot be resolved, the Director should resign.
9. Reporting of Concerns to Non-Employee Directors
Anyone who is concerned about TOMRA’s conduct in any field, including accounting, internal accounting controls or auditing matters, may communicate the concern directly to any non-employee Director or to members of the Audit Committee. Such communication may be confidential or anonymous. Any such communication should be submitted in writing, marked “Personal and Confidential,” and sent to TOMRA’s headquarters marked “Tomra Audit Committee” or with the name of any non-employee Director marked “Personal & Confidential.”