PGS
is committed to maintaining high
standards of corporate governance.
We believe that effective corporate
governance is essential to the
well-being of our 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 liability company
and our governance model is based
on Norwegian corporate law and
the Norwegian Code of Practice
for Corporate Governance of 8
December 2005. We also adhere
to requirements applicable to
foreign registrants in the U.S.
where our American Depositary
Shares (ADS) are publicly traded,
including the New York Stock Exchange
listing standards and the requirements
of the SEC. In addition we implement
corporate governance guidelines
beneficial to our business.
Our corporate governance principles
are adopted by our Board of Directors.
Below is a summary of our principles.
Our articles of association, in
addition to full versions of our
corporate governance principles,
our rules of procedures for our
Board of Directors (Board), our
Audit Committee charter, our Remuneration
and Corporate Governance Committee
charter and our Nomination Committee
charter are available on our website
 .
Code
of Conduct and Core Values
We have 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 and Core Values
are available in full versions
on .
Business
Our business is defined in our
articles of association as:
“The business of the Company
is to provide services to and
participate and invest in energy
related businesses.”
The goals and strategies for our
business areas are presented on
page 32 and page 33 of this annual
review.
Equity
and dividends
Our dividend policy is described
on .
Equal
treatment of shareholders and
transactions with related parties
We have one class of shares. In
our general meetings each share
has one vote. Our Board is committed
to equal treatment of shareholders
in all respects. When applicable,
transactions in our shares should
be carried out through the stock
exchange.
An owner with shares registered
through a custodian has voting
rights equivalent to the number
of shares which are covered by
the custodian arrangement, provided
that the owner of the shares,
within two working days before
the General Meeting provides us
with his name and address together
with a confirmation from the custodian
to the effect that he is the beneficial
owner of the shares held in custody.
Transactions between us and related
parties shall be conducted at
market values. Material transactions
will be subject to independent
valuation by third parties. According
to our Code of Conduct, none of
our employees shall have any personal
or financial interest which might
conflict with ours, or influence
or appear to influence their judgment
or actions in carrying out their
responsibilities to PGS. According
to our Rules of Procedures, a
member of our Board may not participate
in the discussion or decision
of issues, where the director,
or any person closely related
to the director, has material
personal or financial interest
in the matter.
Freely transferable shares
Our shares are freely transferable.
General
Meetings
Through the General Meetings,
our shareholders exercise ultimate
authority and elect the members
of our Board and the chairperson.
Notice of the General Meeting
including all pre-material, is
generally given at least four
weeks in advance to the shareholders
or their depositary bank. For
ADS holders, a record date is
set approximately 5 weeks prior
to the Annual General Meeting.
The notice convening an Extraordinary
General Meeting shall be given
at least two weeks before the
meeting if the holding of the
meeting is demanded in writing
by the independent auditor or
shareholders representing at least
5% of the share capital. Shareowners
who wish to take part in a General
Meeting must give notice to PGS
by the date stated in the calling
notice, which date must be at
least two working days before
the General Meeting.
To vote at the General Meeting,
in person or by proxy, a shareholder
must be registered with the Norwegian
Registry of Securities. Holders
of ADS may vote the shares underlying
the ADS 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 by 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.
In accordance with our Articles
of Association, the Chairperson
of the Board of Directors chairs
the General Meeting.
Nomination
committee
According to our Articles of Association
we shall have a Nomination Committee
consisting of three members to
be elected by our shareholders
at the general meeting. The majority
of the members of the Committee
shall qualify as “independent”.
The term of service shall be two
years unless the General Meeting
determines that the period shall
be shorter. The Nomination Committee’s
main duties are to propose nominees
for election as members and chairperson
to the Board of Directors and
the Nomination Committee, and
to propose the fees to be paid
to the members of the Board and
the Nomination Committee. The
Nomination Committee shall provide
a report to our shareholders prior
to the general meeting.
The
current Nomination Committee
The current members of the Nomination
Committee consist of Roger O’Neil
(chairperson), Hanne Harlem and
C. Maury Devine. Shareholders
who wish to propose new board
members to PGS could do so by
sending an e-mail to Mr. O’Neil
at ir@pgs.com. None of the members
of our Nomination Committee are
employed by us or are members
of our Board. In 2006, our Nomination
Committee had six meetings. A
report regarding the work of our
Nomination Committee will be distributed
with the calling notice for our
Annual General meeting.
Board
of Directors – composition
and independence
According to our articles of association
our Board shall have from three
to eight directors. The Board
has adopted internal rules of
procedures that establish in more
detail its role and responsibilities,
including:
- directors’ qualifications;
- qualification of a majority
of the Board and all of the
members of the Audit and Remuneration
Committees as “independent
directors”; and
- annual review and determination
of the independence of each
director.
No member of our Board shall
be an executive of PGS. Directors
cannot perform paid consultancy
work for us. In addition, a majority
of the Board shall be “independent”
in accordance with the listing
standards of the New York Stock
Exchange. No director will qualify
as “independent” unless
our Board affirmatively determines
that the director has no material
relationship with us.
At its meeting held on February
23, 2007, our Board affirmatively
determined that Holly van Deursen,
Francis Gugen, Siri Beate Hatlen,
Wenche Kjølås and
Harald Norvik individually have
no material relationship with
us and that each is therefore
an “independent” director
under applicable NYSE listing
standards. A majority of the directors
are further independent of the
ten largest shareholders as of
December 31, 2006.
Shareholders and other interested
parties may communicate directly
with our independent directors
by sending a written letter in
an envelope addressed to Petroleum
Geo-Services “Board of Directors
(Independent Members)”,
General Counsel Rune Olav Pedersen,
P.O. Box 89, 1325 Lysaker, Norway.
The
current Board of Directors
As of December 31, 2006, the Board
consisted of seven shareholder
representatives. Anthony Tripodo
resigned from the Board with effect
from February 1, 2007, after being
appointed chief financial officer
of Tesco Corporation. Neither
the CEO nor any other member of
the executive management in PGS
is a director of the Board. The
current members of the Board are
presented on page 34 and 35 of
this annual report and on .
The
work of the Board of Directors
In accordance with Norwegian corporate
law, our Board has overall responsibility
for management of our Company,
while our CEO is responsible for
day-to-day management. Our Board
supervises our CEO’s day
to-day management and our activities
in general. It is also responsible
for ensuring that appropriate
steering and control systems are
in place. Our CEO shall, in agreement
with the chairperson of the Board,
annually present a meeting calendar
covering the next calendar year
to the Board for approval. In
2006 our Board had 18 meetings.
Our Board has adopted internal
rules of procedures, which establish
in more detail its role and responsibilities
in relation to the management
and supervision of the Company.
The rules emphasize, among other
things, our Board’s responsibility
to decide our financial targets
and determine our overriding strategy
in collaboration with our CEO
and our executive committees,
and to approve our business plans,
budgets and frameworks. In its
supervision of our business activities,
our Board will seek to ensure
that there exist satisfactory
routines for follow-up of principles
and guidelines required by our
Board in relation to ethical behaviour,
conformity to law, health, safety
and environment, and social responsibility.
The rules also require provision
for an annual self-evaluation
of our Board to determine whether
our Board and its committees are
functioning effectively. The tasks
and duties of our CEO vis-à-vis
our Board are outlined in the
rules, along with the tasks and
duties of the chairperson of our
Board. Our Board shall have a
vice-chairperson to chair our
Board in our chairperson’s
absence. The full version of the
rules of procedures for our Board
of Directors is available on .
Our governance structure is organized
as described below:
Our Board is responsible for the
development and supervision of
our business activities. Our Board
has established an Audit Committee
and a Remuneration and Corporate
Governance Committee to assist
in organizing and carrying out
its responsibilities.
- Our Board of Directors appoints
our CEO.
- Our CEO is responsible for
the day-today management of
our activities.
- Our CEO has organized our
Executive committees and our
Disclosure Committee to further
assist in discharging our CEO’s
responsibilities.
- Our Board, along with our
CEO, is committed to operating
PGS in an effective and ethical
manner in order to create value
for our shareholders. Our Code
of Conduct requires our management
to maintain an awareness of
the risks to PGS in carrying
out our business strategies
and not to put personal interests
ahead of or in conflict with
the interests of PGS.
- Our CEO, under the oversight
and guidance of our Board and
our Audit Committee, is responsible
for ensuring that our financial
statements fairly present in
all material respects our financial
condition and results of operations
and that we make timely disclosures
needed to assess our financial
and business soundness and risks.
Board
Committees
Our Audit Committee consists of
the board members Francis Gugen
(chairperson), Wenche Kjølås
and Harald Norvik. Norvik replaced
Anthony Tripodo as of February
1, 2007, when Tripodo resigned
from the Board. Its function is
to; assist our Board in its oversight
of the integrity of the financial
statements of PGS; the independent
auditor’s qualifications,
independence, and performance;
the performance of the internal
audit function; and compliance
with legal and regulatory requirements.
Our Audit Committee is composed
of members that satisfy the SEC’s
and the NYSE’s independence
requirements.
Our Remuneration and Corporate
Governance Committee consists
of the board members Harald Norvik
(chairperson), Holly van Deursen
and Siri Beate Hatlen. The function
of the Committee is to assist
with the matters relating to the
compensation, benefits and perquisites
of our CEO and other senior executives
and examine and maintain our guidelines
regarding good corporate governance.
Remuneration
of the Board of Directors and
the executive management
The remuneration of the members
of the Board is not linked to
performance, but is based on participation
in meetings, and is approved by
the General Meeting annually.
The Board Members shall not take
on specific assignments for us
in addition to their appointment
as a Member of the Board.
For details on compensation for
each member of the Board see
.
The remuneration to our Board
will be proposed by the Nomination
Committee according to its charter
at our Annual
General Meeting.
The compensation structure and
guidelines for executive managers
are subject to annual review by
the Remuneration and Corporate
Governance committee and are approved
by the Board. PGS currently has
a compensation structure for our
executive managers including base
salary, cash bonus, share bonus,
a retention bonus and a stock
option program. For further details
on our compensation structure
and total compensation to our
executive team see www.pgs.com.
Information
and communications
Our Board is committed to reporting
financial results and other relevant
information based on openness
and taking into account the requirement
for equal treatment of all participants
in the securities market. As a
listed company, we comply with
relevant regulations regarding
disclosure. Announcements are
released through Oslo Stock Exchange’s
Company Disclosure System and
through relevant channels in the
US market. In addition, all announcements
are available on the company’s
website .
Our shareholder policy is described
on .
Take-overs
Our Board will not seek to hinder
or obstruct any take-over bids
for our activities or shares,
or exercise mandates or pass any
resolutions that obstruct take
over bids that are put forward.
Auditor
Our Audit Committee shall support
the Board in the administration
and exercise of its responsibility
for supervisory oversight of the
work of the independent auditors,
which shall keep our Board informed
of all aspects of its work for
PGS. This includes submission
of an annual plan for the audit
of PGS. The auditor meets our
Audit Committee at least once
a year without management present.
Our internal procedures limit
the use of services from our auditors.
The independent auditor shall
meet our Audit Committee at least
once a year in connection with
the preparation of the annual
accounts, and at least once a
year present to our Audit Committee
a review of our internal control
procedures. The auditor will be
asked annually to confirm in writing
that the auditor satisfies the
requirements for independence.
The auditor shall also provide
our Audit Committee with a summary
of all services in addition to
audit work that have been undertaken
for us. The remuneration paid
to the auditor will be reported
in the Annual General Meeting
for approval. |
