Birdstep Technology believes that the principles of corporate governance are important in securing shareholder values, a positive and robust corporate culture and a good reputation with the company's stakeholders.
Birdstep Technology's principles for corporate governance are primarily based on Norwegian law, regulations by the Oslo stock exchange and the Norwegian Code of Practice for corporate governance published on December 7, 2004. The Board of Directors will provide a report on the company's corporate governance in the annual report.
Business
Birdstep Technology articles of association in combination with the company's vision, mission and strategic objective define the scope and description of the business.
Equal treatment of shareholders
All shareholders of Birdstep Technology have equal rights and status. The company has one class of share. All shares are freely traded and transferable. Birdstep Technology strictly adheres to the principle of equal treatment of all shareholders.
Annual General Meeting
The Annual General Meeting (AGM) is the company's highest body and the shareholders exert their authority in the company through the AGM. Birdstep encourages all shareholders to participate and exercise their rights in the AGM.
The AGM elects the Board of Directors. The Board of Directors has 3-8 members elected by the shareholders for a period of two years. Birdstep Technology's CEO is not a member of the Board. The Board shall be made up to ensure a broad representation of Birdstep Technology's shareholders. When appointing, emphasis is also placed on meeting the company's needs for expertise, capacity and balanced decisions.
The Board is independent of the company's management and the members do not receive extra remuneration from the company beyond the fees for Board members or fees for participation in sub-committees. The Board members have not been employed by the company in recent years. The company does not provide loans to Board members or Group Management.
The members of the Board receive received NOK 125,000 and the chairman NOK 300,000 in annual compensation.
When electing board members, emphasis is placed on the relevant candidate not having cross-relations with other board members or the CEO, close family ties to the CEO or having or representing substantial business relations with the company. Furthermore, it is also the intention when selecting shareholder-elected members that these members must, in all material respects, be independent of the company's main shareholder.
Should vested interests or associated interest situations arise, the company's provisions for vested interests and conflict of interests shall be applied.
An Election Committee works based on a mandate and authority of the company's shareholders makes preparations and recommends candidates for the General Meeting's election of the Board of Directors. The Election Committee consists of three members who are shareholders or who represent the shareholders. The Chairman of the Board is a member of and chairs the Election Committee. Two members are elected by the AGM. Members are elected for a two-year period. The Election Committee works in accordance with instructions put forward by the Board and is responsible for submitting to the AGM recommendations for the election of board members.
This Election Committee currently comprises:
• Terje Thon, Chairman of the Board
• Knut Erik Lindseth
• Knut Brundtland
Subject to the decision and election by the AGM in 2006, the Election Committee will be laid down in the company's articles of association and no more than one member of the Election Committee will be a member of the Board.
The Board of Directors
In accordance with Norwegian law, the Board holds the responsibility for monitoring and supervising the management of the company and the operation. In addition to statutory requirements, the Board works in accordance with a set of board instructions. The instructions and procedures that apply to the Board include regulations for the preparation of agendas, privacy and confidentiality, competence, responsibility to establish a management system that ensures that activities are run in accordance with the company's core values, ethical guidelines and generally accepted principles of corporate governance, information on the use of committees and evaluation of the Board's activity and competence.
In accordance with the said guidelines and procedures, the Board is responsible, to the degree necessary, for determining strategies, business plans and budgets for the company. The Board is also responsible for ensuring that the company has a competent management with clear internal distribution of responsibility and work.
Due to the limited size of the company, the Board has chosen not to establish subcommittees in order to process specific issues. The Board as a whole acts as Remuneration Committee. In this respect, the Board evaluates the total remuneration to the CEO and the policy for remuneration to managers. Furthermore, the Board acts as the Audit Committee for the purpose of identifying, understanding and evaluating operational and financial risks. This shall include a thorough evaluation of the company's financial reporting, auditing, and established procedures for advance approval of the auditor's remuneration, and also the handling of complaints from the employees in respect of accounts, control and audits. The Board holds biannual meetings with the company's appointed Auditor, one in the fall to discuss the preparations for the annual accounts and company audit, and one in the spring to discuss the final accounts and other findings.
The CEO
The CEO is in charge of the day-to-day management of operations in Birdstep Technology. The CEO is responsible for ensuring that the company is organized, run and developed in accordance with current legislation, regulations and resolutions in addition to guidelines and procedures passed by the Board and the AGM.
Guidelines on the exercise of authority in Birdstep Technology have been drawn up pursuant to the guidelines and procedures for the CEO.
As a part of the day-to-day management and running of the company, the CEO will be an owner representative in subsidiaries, provided that the issues in question do not require that they are handled by the Board, Corporate Assembly or the AGM.
Management
The management of Birdstep Technology represents key positions in terms of organizational units and functions. Positions are appointed by the CEO. Management meetings are held monthly to discuss and decide important strategic, financial or fundamental matters to the company. Birdstep Technology has established a management model whereby goals are set, and results followed up in a systematic way. This applies to financial targets and a number of non-financial matters relating to Birdstep Technology's position in the market, technology, delivery, quality and customer satisfaction as well as its capacity for innovation, internal routines and responsibilities as an employer. The targets are reviewed in the management Business Review, at Board meetings and through the company's incentive system.
Auditing
Ernst & Young is elected by the AGM to act as Technology's auditor to confirm to the General Meeting that Birdstep Technology's annual accounts have been prepared and presented in accordance with current laws and regulations (financial audit).
The auditor shall be independent of the company. As a consequence, Birdstep Technology will not use the elected auditor for tasks other than the financial audit required by law. Nevertheless, the auditor is used for tasks that are naturally related to the audit, such as technical assistance with tax returns, annual accounts, understanding of accounting and tax rules and confirmation of financial information in various contexts.