About PGS

Company Profile Corporate Governance Core Values Code of Conduct Audit Committee Charter Remuneration and Corporate Governance Committee Charter Rules of Procedure Nomination Committee Mandate and Charter Board of Directors Senior Management

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Corporate Governance

Petroleum Geo-Services (PGS) is committed to maintaining high standards of corporate governance. We believe that effective corporate governance is essential to the well being of the company and establishes the framework by which we conduct ourselves in delivering services to our customers and value to our shareholders.

PGS is registered in Norway as a public limited company and the company’s governance model is built on Norwegian corporate law. PGS adheres to requirements applicable in countries where its shares are publicly traded, including applicable stock exchange listing standards, and otherwise implements corporate governance guidelines beneficial to its business.

Through the Shareholders’ Meeting, the Shareholders exercise ultimate authority in the Company and elect the members of the Board of Directors and the Nomination Committee.
The Nomination Committee is responsible for evaluating and recommending candidates for members of the Board of Directors as well as proposing remuneration for members of the Board of Directors.
The Board of Directors is responsible for the administration, development and supervision of the business activities of the Company.
The Board of Directors has established an Audit Committee and a Remuneration and Corporate Governance Committee to assist in organizing and carrying out its responsibilities.
The Board of Directors appoints the Chief Executive Officer (CEO).
The CEO is responsible for the day-to-day management of the company’s activities.
The CEO has organized an Executive Management team and a Disclosure Committee to further assist in discharging the CEO’s responsibilities.
The Board of Directors along with the CEO is committed to operating the Company in an effective and ethical manner in order to create value for the shareholders. PGS’ Code of Conduct requires PGS management to maintain an awareness of the risks to the Company in carrying out its business strategies and not to put personal interests ahead of or in conflict with the interests of the Company.
The CEO and CFO, under the oversight and guidance of the Board of Directors and its Audit Committee, is responsible for ensuring that the financial statements of the Company fairly present in all material respects its financial condition and results of operations and that the Company makes timely disclosures needed to assess the financial and business soundness and risks of the Company.

GOVERNANCE STRUCTURE AND GUIDELINES

Shareholders’ Meeting

The annual Shareholders’ Meeting is normally held in June and notice of the meeting is generally given at least four weeks in advance to the shareholders or their depositary bank. To vote at the meeting, in person or by proxy, a shareholder must be registered with the Norwegian Registry of Securities. Holders of American Depositary Shares (ADS) may vote the shares underlying the ADSs by: (a) having the underlying shares transferred to an account with the Norwegian Registry of Securities in the name of the holder, (b) attending the meeting as a shareholder, providing their name and address, and a confirmation from Citibank, depositary for the ADS, to the effect that they are the beneficial owner of the underlying shares, or (c) authorizing Citibank to vote the ADS on their behalf. At the annual shareholders’ meeting, the shareholders approve the financial statements and any proposed dividend payment. Further, the shareholders consider and vote on the appointment of the independent auditor based on the proposal from the Audit Committee, and approve the auditor’s remuneration. The shareholders also consider and vote on the election of directors to the Board of Directors and fix the directors’ compensation, each based on the proposal from the Nomination Committee.

Board of Directors

The Board of Directors currently consists of seven shareholder representatives.

Neither the CEO nor any other member of the executive management is a director of the Board. In accordance with Norwegian corporate law, the Board of Directors has overall responsibility for management of the Company, while the CEO is responsible for day-to-day management. The Board supervises the CEO’s day-to-day management and the activities of the Company in general. It is also responsible for ensuring that appropriate steering and control systems are in place.

The Board of Directors has adopted internal rules of procedures that establish in more detail its role and responsibilities in relation to the management and supervision of the Company, including:

Directors’ qualifications
Qualification of a majority of the Board of Directors and the Remuneration and Corporate Governance Committee and all of the members of the Audit Committee as “independent directors”
Annual review and determination of the independence of each Director
Directors’ access to the management of the Company and right to consult and retain independent legal and other advisors
Directors’ orientation program to familiarize new representatives with the Company, its management structure and operations, its industries, key legal, financial, and operational issues facing the Company, its compliance programs, its Code of Conduct, its internal and independent auditors, the structure and procedures of the Board, and the committees on which the Directors will serve
Establishment of policies and procedures for CEO selection and succession, and review of CEO performance with respect to established goals and objectives.
An annual self-evaluation, under the oversight of the Remuneration and Corporate Governance Committee, to determine whether the Board and its committees are functioning effectively.

Board Committees

Under Norwegian law, decision-making authority may not be delegated by the Board of Directors to its committees or subcommittees. The Board may, however, establish committees to assist it in discharging its responsibilities. PGS’ Board of Directors has appointed two such committees:

The Audit Committee has three members elected by and among the members of the Board. Its function is to assist the Directors in their oversight of the integrity of the financial statements of the Company; the independent auditor’s qualifications, independence, and performance; the performance of the Company’s internal audit function; and compliance with legal and regulatory requirements. The Audit Committee is composed of members that satisfy the SEC’s independence requirements.

The U.S. Securities Exchange Act of 1934 and the listing standards of the New York Stock Exchange require the audit committee of a listed company in the United States, such as PGS, to be directly responsible for the appointment, compensation, retention and oversight of the work of that company’s independent auditors. Because under Norwegian law the power to appoint, retain and compensate the auditors is held by the shareholders, the audit committee is directly responsible only for the oversight of the work of the auditors and the audit committee and the full Board recommend the appointment, retention and compensation of the auditors to its shareholders for approval. In addition, as a foreign private issuer in the United States, PGS is not required to publish the audit committee report required by applicable regulations of the U.S. Securities and Exchange Commission for U.S. domestic issuers.

The Remuneration and Corporate Governance Committee consists of three members who are elected by and among the members of the Board. The functions of the Committee are to assist with the matters relating to the compensation, benefits and perquisites of the Company’s CEO and other Senior Executives and to the Company’s corporate governance policies and procedures. As a foreign private issuer in the United States, PGS is not required to publish the compensation committee report required by applicable regulations of the U.S. Securities and Exchange Commission for U.S. domestic issuers.

The listing standards of the New York Stock Exchange require the corporate governance committee of NYSE listed companies to oversee the evaluation of the board and management. While our Remuneration and Corporate Governance Committee assists with the evaluation of our Board and management, the PGS Board of Directors, which is composed entirely of non-management directors, is ultimately responsible for conducting the evaluation, as required by Norwegian law and in accordance with Norwegian customary practice.

Nomination Committee

The Nomination Committee consists of three members, elected by the Company’s shareholders in accordance with Norwegian corporate governance best practices. The members of the Nomination Committee are not members of the Board of Directors. The Nomination Committee is responsible for making recommendations for consideration by the shareholders relating to:

individuals who are nominated to serve as members of the Board of Directors and as the Chairperson of the Board of Directors;
individuals who are nominated to serve as members of the Nomination Committee and as the Chairperson of the Nomination Committee;
the remuneration of the members of the Board of Directors and the Nomination Committee; and
any amendments to the Nomination Committee Mandate and Charter.

Annually, the Nomination Committee produces a written report containing its nominations and proposals, which is distributed in advance of each Shareholders’ Meeting. In accordance with Norwegian law and practice, the majority of the members of the Nomination Committee satisfy the independence requirements of the SEC and the NYSE. As a foreign private issuer in the United States, PGS’ Nomination Committee is not required to be composed entirely of independent members.

Chief Executive Officer

The CEO is responsible for the day-to-day management of the Company’s activities and is subject to the guidelines and decisions issued by the Board of Directors.

The PGS management model is based on giving extensive responsibility to its business units, while at the same time retaining a common approach in areas of key importance for PGS as a whole. The business units are responsible for developing their businesses, organizations and competencies within principles of leadership and standards of governance applicable to all PGS’ activities worldwide.

In accordance with rules of procedure established by the Board of Directors, the CEO has organized the following committees to further assist in discharging the CEO’s responsibilities:

Executive Management (EM) currently consists of five members of senior management: CEO, CFO, Group President Marine, Group President Data Processing and Technology and President of Onshore. Members of the EM have a collective duty to promote PGS’ strategic, financial and other objectives, as well as to safeguard the Company’s assets, organization and reputation.
The Disclosure Committee, chaired by the CFO, considers the materiality of information, determines disclosure requirements, identifies disclosure issues and coordinates the development of an appropriate infrastructure to ensure that information required to be disclosed by the Company in the reports that it files or submits under applicable law is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Code of Conduct

PGS has adopted a Code of Conduct that reflects our commitment to our shareholders, customers and employees to conduct our business with the utmost integrity. Our Code of Conduct is an integration of our Values, Principles and Business Practices. Our Values are the foundation of how we conduct business. Principles of Conduct regulate how we maintain and implement our values and we apply these principles to our Business Practices.

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