Corporate Governance
Flytoget is governed in accordance with the ‘Norwegian Code of Practice for Corporate Governance’ in order to ensure a high standard of interaction between the company’s owner and its management. The company has a Corporate Governance Policy.
Flytoget’s three core values are enthusiasm, innovation and efficiency. Flytoget must be recognised by these values, which in combination with our vision and business idea form the basis for our overall objectives and strategies. The core values are actively used for the purpose of decision-making.
Transparency, responsibility and equal opportunities must be the hallmarks of the company’s corporate culture, underpinning the sense of trust in the company, internally as well as externally. Through their work, Flytoget’s employees come into contact with customers, suppliers and colleagues. In order to ensure consistent, honest and professional conduct, a set of ethical guidelines have been drawn up and made applicable to all staff and Board members. The ethical guidelines have been approved by the Board of Directors and are available on the company’s intranet and web pages.
Flytoget’s key financial figures are presented in a separate sustainability report.
Activity
Flytoget’s social benefit objective is to ensure a level of profitability for its owner, the Norwegian Ministry of Trade, Industry and Fisheries, and to provide an increased public transport share for travel to and from Oslo Airport, thereby helping to meet the traffic challenge and to reduce the environmental and climatic impact. When Flytoget was established, the company’s target was to provide a 50 per cent public transport share to Oslo Airport. This target was reached a long time ago, and has now been raised to a 75 per cent public transport share by 2020.
Profitability and accessibility considerations must at all times be balanced against the provision of service. Flytoget’s objects clause reads: “The company’s object is to operate a train service to and from Oslo Airport, to make associated long and short-term investments, and to provide associated services”.
Flytoget runs its business in accordance with its objects clause. The company sets annual targets and strategies for its various activities.
In order to ensure profitability and an increased public transport share, customer satisfaction and loyalty are Flytoget’s key drivers of value. Flytoget will always prioritise work that ensures safety, punctuality and a high level of service.
Shareholder's funds and dividend
In accordance with their instructions, Flytoget’s Board of Directors carry a special responsibility to ensure that the shareholder’s funds are kept at a reasonable level, and to notify the AGM if this is not the case. At the end of 2014, the company has a robust balance sheet with strong capital adequacy. This will enable Flytoget to invest in new trains for their Airport Express service and in product improvements.
Flytoget’s Board of Directors conduct an on-going dialogue with the company’s owner about the corporate dividend policy based on profit-earning potential. For the 2014 financial year the company will pay out a dividend of NOK 129 million, which amounts to 70 per cent of the annual profit after tax.
As a public corporation, Flytoget is subject to special regulations which allow the AGM to set aside the Board’s proposal for payment of dividend. Furthermore, the state’s ownership interest in the company is closely scrutinised by the Office of the Auditor General.
Equal treatment of shareholders and related party transactions
Flytoget is a public corporation wholly owned by the Norwegian Ministry of Trade, Industry and Fisheries. Guidelines for Related Party transactions are incorporated within the company’s instructions to the Board and are embedded in the corporate ethical guidelines.
Annual general meeting
Flytoget’s Annual General Meeting is held in accordance with chapter 20 of the Norwegian Companies Act. The Minister of Trade, Industry and Fisheries represents the company’s sole shareholder.
Nomination committee
Flytoget has no nomination committee as the Board of Directors are elected by its shareholder and staff respectively.
Corporate assembly and board - makeup and independence
It has been agreed with the relevant trade unions (the Norwegian Union of Locomotive Engineers and the Norwegian Railway Workers Union) that the company will not have a Corporate Assembly. Instead, three staff representatives sit on the Board of Directors, each elected for a two-year term. In addition, the Board has five external members elected by the general meeting. The Board members elected by the general meeting also serve for a period of two year, and they are all independent of the company’s executive management. A Vice-Chairman to the Board is appointed.
The Board of Directors shall at all times possess the competence, capacity and diversity required for their work to be satisfactorily conducted. Further details about the members of the Board are provided in a dedicated presentation on Flytoget’s website. Flytoget helps ensure that the competencies of the Board are continuously being developed with particular attention being paid to topical subjects.
The work and responsibilities of the board
Norwegian company legislation and the recommendations issued by the Norwegian Corporate Governance Board stipulate that the overall administration and control of the company form part of the tasks of the Board of Directors.
The Board of Directors are responsible for ensuring that Flytoget draws up and approves a corporate governance policy with instructions for the Board and the CEO.
The Board of Directors shall ensure that the corporate governance policy and the instructions issued for the Board and its CEO, are reviewed at least every second year with a view to identifying requirements for updates or amendments. Towards the end of every year, the Board shall adopt a schedule for board meetings to be held in the year ahead, specifying the principal topics for discussion at each meeting.
The administration's responsibility
Flytoget’s Corporate Governance Policy incorporates a stipulation that the CEO is the owner of the “Flytoget Handbook” and that the Board carry ultimate responsibility for ensuring its implementation. The CEO shall ensure that the Corporate Governance Policy is systematically updated.
Heads of departments are responsible for identifying relevant requirements and for documenting compliance within their own areas of responsibility. Heads of departments are responsible for communicating all relevant sections of the “Flytoget Handbook” to their staff and must ensure that its stipulations are fully understood and complied with.
Risk management and internal control
Flytoget’s Corporate Governance Policy is intended to ensure good corporate governance by providing:
- Continuity of work methods that safeguard the chosen path and ensure compliance with regulations.
- Flexibility to make appropriate adjustments to accommodate changes to requirements and framework conditions, and to make use of new knowledge and new experience to ensure continual improvement.
In addition, the “Flytoget Handbook” must provide an overall description of the line of governance adopted. The corporate governance policy, the ethical guidelines, the authorisation procedure and the corporate governance procedure provide the premise for all other policies and procedures.
Flytoget’s risk management shall contribute to the company’s optimisation of value creation and growth. It is an objective that risk assessments capture an overall picture of the risks associated with changes to the external framework as well as to internal operations and the development of corporate activities.
The company’s financial strategy aims to ensure that all risks associated with exchange rates, interest rates, liquidity and credit are known at all times, to ensure that the company remains unaffected, to the greatest degree possible, by non-controllable fluctuations in the interest and currency markets. The financial strategy is approved on an annual basis by the Board. Operational risks are incorporated within the company’s traffic safety plan and security plan. The company makes use of risk analyses and audits as instruments designed to uncover and control the company’s risks in various areas. The company has a Business Continuity Plan (BCP) which is a contingency plan providing useful information, advice and guidelines to be implemented in the event of an unforeseen incident. The BCP will help ensure that Flytoget, as an organisation, will resume normal operations as soon as possible following an incident.
The officer in charge of corporate governance conducts internal audits associated with relevant areas of corporate activity.
Remuneration of board members
The level of remuneration payable to members of the Board is decided by the company’s owner at the annual general meeting. Remuneration of the Board is not linked to the company’s profit and no options have been issued to any members of the Board. The total amount paid out in remuneration of Board members in 2014 is presented in note no. 2 to the accounts.
Remuneration of senior executives
Salaries paid to senior executives have been declared in note no. 2 to the accounts, with the remuneration paid to the Board of Directors and the CEO. The Board of Directors decide the terms and conditions of employment for the CEO on an annual basis. The company’s policy with respect to remuneration payable to senior executives complies with the guidelines issued by the Norwegian Ministry of Trade, Industry and Fisheries.
The company’s Remuneration Committee comprises two Board Members elected by the shareholder and one Board Member elected by the company’s employees. The Director of Human Resources is Secretary to the Remuneration Committee. The Remuneration Committee’s remit is to ensure that the Board of Directors meet the owner’s expectations with respect to executive salaries and to consider the administration’s proposed bonus programme for managers and staff for the year ahead. The Remuneration Committee’s recommendations are submitted to the Board of Directors for adoption.
Information and communication
The administration holds quarterly meetings with the owner during which financial results are presented, accompanied by other relevant information.
Flytoget also works to fulfil the demand for information from other stakeholders such as customers, collaborative partners, legislators and society in general through sustainability reporting and structured stakeholder dialogue.
Auditor
The company’s auditor attends all board meetings that deal with the presentation of annual accounts; the audit report will be reviewed by the same meeting. In the course of this meeting the Board will also conduct an interview with the auditor without any members of the administration present. The auditor attends the Annual General Meeting. The total remuneration paid to the auditor is declared in note no. 2 to the accounts. This amount constitutes payment for auditing as well as other services. The company is aware that the auditor provides services other than auditing.