08 | Governance
Hafnia is committed to upholding the highest corporate governance standards, professionalism and business integrity across all activities. To achieve that, the development, implementation and maintenance of well-functioning governance policies and practices are critical.
Hafnia’s governance policies and practices are created to comply with applicable laws and ethical standards while being mindful to the Company’s long-term performance and financial soundness.
The policies abide to the overall principles of uprightness and fairness in accordance with leading market practices, while aligning with the interests of the Board of Directors and management, and balancing the reasonable expectations of shareholders, employees, customers, suppliers, other contracting parties and the public.
Hafnia’s corporate governance policies are based on the Norwegian Code of Practice for Corporate Governance dated 14 October 2021 issued by the Norwegian Corporate Governance Board (the “Code”). The Code is available at www.nues.no.
Board and Management presentation
Hafnia’s management team consists of seasoned executives who have extensive experience and vast networks of strong relationships with major oil and gas companies, shipyards, global financial institutions and other key shipping industry participants. They have demonstrated their ability to manage the commercial, technical and financial aspects of Hafnia’s business, backed by years of senior-level experience operating large and diverse fleets of energy transportation vessels, as well as other assets within the maritime sector.
The Board of Directors complements Hafnia’s manage- ment with extensive collective international experience in shipping, energy and capital markets – as well as a broad range of complementary functional competencies. This allows a good balance of knowledge, expertise and diversity appropriate to promote different perspectives and mitigate against groupthink.
The Board of Directors is responsible for the overall management of the Company and may exercise all of the powers of the Company not reserved to the Company’s shareholders by its bye-laws or under Bermuda law.
Andreas Sohmen-Pao is Chairman of BW Group and listed affiliates BW LPG, Hafnia, BW Epic Kosan, BW Off- shore, BW Energy and Cadeler. He is Chairman of the Global Centre for Maritime Decarbonisation, a director of Navigator Holdings and a trustee of the Lloyd’s Register Foundation. He has previously served as Chairman of the Singapore Maritime Foundation and as a non-executive director of The Hongkong and Shanghai Banking Corporation, the Maritime and Port Authority of Singapore, The London P&I Club, Sport Singapore, Singapore’s National Parks Board and The Esplanade amongst others. Prior to joining BW, Mr. Sohmen-Pao worked at Goldman Sachs International in London. He is a graduate of Oxford University and Harvard Business School. He resides in Singapore.
Erik Bartnes was co-founder of Pareto AS and senior partner from 1988 to 2010, and Chairman of Pareto AS until April 2013. Mr. Bartnes is one of the co-founders of the original Hafnia Tankers in 2010 and served as Executive Chairman until 2018. Currently, Mr. Bartnes serves as Chairman in Astrup Fearnley Holding AS, Astrup Fearnley AS, Fearnleys AS, Fearnley Securities ASA, Fearnley Offshore AS, Fearnley Offshore Supply AS, Eclipse Drilling AS, Revier Invest AS , and Svele AS . Mr. Bartnes is a board member of Pareto Asset Management AS, Pareto Invest AS, Premium Maritime Fund AS, Thor Dahl Shipping AS and Ulstein Group AS . Previously, Mr. Bartnes served as a board member and Chairman of Christiania Shipping A/S, Pareto Invest AS and as a board member of Eitzen Chemical ASA, Viking Cruises Ltd, Viking Investments (Cayman) Ltd., Jupiter Properties (USA) Ltd, Nordic Tankers AS, Nordic Shipholding AS, Siva Shipping AS and Ugland Shipping AS. Mr Bartnes holds a LizRerPol degree from University of Fribourg in Switzerland. Mr. Bartnes resides in Oslo.
Donald John Ridgway
Donald John Ridgway was CEO of BP Shipping from 2008 to 2015. Mr. Ridgway is a qualified Master Mariner, and has a master degree from the Judge Institute, Cambridge University. He is a Chartered Marine Technologist and a Fellow of the Institute of Marine Engineering, Science and Technology, and is currently a director of Tindall Riley Ltd. and Tindall Riley (Britannia) Ltd., a leading marine liability insurer. He was formerly Chairman of the Oil Companies International Marine Forum and the Marine Preservation Association LLC, President of the API Marine Committee, Director of a number of businesses and organisations including Britannia P&I Insurance Ltd., Alaska Tanker Company, ITOPF, and UK Chamber of Shipping and a member of the Executive Advisory Board to the UN IMO World Maritime University. Mr. Ridgway resides in London.
Thomas Andrew Jaggers
Mr. Thomas Andrew Jaggers is currently a managing director at Oaktree. Prior to joining Oaktree in 2010, Mr. Jaggers spent nine years at the law firm Linklaters LLP in London, most recently as a managing associate, where he specialised in private equity, corporate and company law, in particular mergers and acquisitions (both public and private). Mr. Jaggers currently serves on the Board of Directors of Cruise Yacht Upper Holdco Limited, the parent company of The Ritz-Carlton Yacht Collection. Mr. Jaggers holds a B.A. (Hons) Law from Jesus College, Cambridge. Mr. Jaggers resides in London.
Guillaume Philippe Gerry Bayol
Mr. Guillaume Philippe Gerry Bayol is currently a man- aging director at Oaktree. Additionally, Mr. Bayol serves as Co-Portfolio Manager of Fleetscape Capital, a leading alternative capital provider to the global maritime and transportation industries. Prior to joining Oaktree in 2008, Mr. Bayol spent two years as an analyst in the Investment Banking division at Merrill Lynch, gaining experience in corporate finance and restructuring. Mr. Bayol currently serves on the Board of Directors of OMH Optimum Maritime Holdings Limited and OSM Maritime Group Holdings Limited. Mr. Bayol holds a B.B.A. degree with a major in finance from ESSEC Busi- ness School in France. Mr. Bayol resides in London.
Ouma Sananikone is currently a non-executive director of Innergex (Canada), Ivanhoe Cambridge (Cana- da), Macquarie Infrastructure Corporation (U.S.) and Xebec (Canada, listed on the Toronto Stock Exchange). Ms. Sananikone was also chairman of, among others, Smarte Carte (U.S.) and of EvolutionMedia (Australia) and a non-executive director of the Caisse de Depot et Placement de Quebec (Canada). She also acted as an honorary Australian Financial Services fellow for the U.S. on behalf of the Australian government. Addition- ally, Ms. Sananikone has held various other senior positions, including CEO of Aberdeen Asset Management (Australia), CEO of the EquitiLink Group (Australia, New Zealand, USA, Canada and UK) as well as founding man- aging director of BNP Investment Management (Australia). Ms. Sananikone has always been committed to the community, serving as a board director of a number of arts, education and charitable organisations, among them the United Nations High Commission for Refugees. Ms. Sananikone holds a BA (Economics and Political Sciences) from the Australian National University and a Master of Commerce (Economics) from the University of New South Wales. She is a recipient of the Centenary Medal from the Australian Government for services to the Australian finance industry. Ms. Sananikone resides in New York.
Peter Graham Read
Peter Read is currently the Non-Executive Chairman of Welbeck Publishing Group Limited. He is also a Non-executive Director and Chairman of the Audit Committees of Napster Group PLC and the Professional Cricketers Association. Mr. Read is also a Member of the Board and Chairman of the Audit Committee of the Royal Automobile Club. In a career spanning 37 years at KPMG, Mr. Read was a partner and sector chairman. Mr. Read graduated from Southampton University with a degree in Commerce and Accountancy. He is also a Fellow of the Institute of Chartered Accountants in England and Wales. Mr. Read resides in London and Sussex, England.
|Andreas Sohmen-Pao||Erik Bartnes||Donald John Ridgway||Ouma Sananikone||Peter Graham Read||Thomas Andrew Jaggers||Guillaume Philippe Gerry Bayol|
|Served since||16 May 2014||16 January 2019||16 January 2019||8 November 2019||16 January 2019||27 January 2022||27 January 2022|
|Attendance 2021||4/4||4/4||4/4||4/4||4/4||Not applicable||Not applicable|
|Residency||Resides in Singapore||Resides in Oslo||Resides in London||Resides in New York||Resides in London||Resides in United Kingdom||Resides in United Kingdom|
Mikael Øpstun Skov
Mikael Øpstun Skov is Chief Executive Officer of Hafnia, a role he assumed in 2019 after the merger between Hafnia Tankers and BW Tankers. Mr. Skov was the co-founder and CEO of Hafnia Tankers and has more than 35 years in the shipping industry. Prior to establishing Hafnia Tankers, Mr. Skov held various positions over his 25-year career at Torm A/S, of which the last two years he served as CEO. Mr. Skov is a Board Member of BLS Invest and Clipper Group Ltd. Mr. Skov resides in Monaco.
Perry Wouter Van Echtelt
Perry Wouter Van Echtelt is Chief Financial Officer of Hafnia, a role he assumed in November 2017. Mr. Van Echtelt has more than 20 years of experience in invest- ment banking and ship finance. Prior to Hafnia, Mr. Van Echtelt was CFO of BW Tankers from 2017, a role he took after leaving ABN AMRO Bank as head of transportation and logistics Asia Pacific & Middle East. For 17 years, Mr. Van Echtelt held various positions in the corporate finance and capital markets group of ABN AMRO and its predecessors (MeesPierson and Fortis Bank), and at Gilde Investments from 1998 until 2000. Mr. Van Echtelt resides in the Netherlands.
In line with the recommendations set out in the Corpo- rate Governance Code, Hafnia has established an Audit Committee comprising two Members; Peter Graham Read (Chairman) and Erik Bartnes (Committee Member). Neither of them were previous partners or directors of the Company’s external auditor, KPMG, within the last 12 months or hold any financial interest in KPMG.
The members of the Audit Committee are independent of the Company. The Board of Directors considers Peter Graham Read, who has extensive accounting and auditing experience, well qualified to chair the Audit Committee. Together, the Audit Committee collectively have strong accounting and related financial management expertise. They will keep informed of relevant chang- es to accounting standards and matters aments. The Members of the Audit Committee will serve while they remain members of the Board of Directors, or until the Board of Directors decide otherwise or wish to retire from their appointment as Members of the Audit Committee.
The Audit Committee’s primary purpose is to act as a preparatory and advisory committee for the Board of Directors in discharging responsibilities relating to the integrity of financial statements, monitoring the Group’s system of internal control of risk management and in- dependence of the external auditor.
This includes but is not limited to:
- All critical accounting policies and practices
- Quality, integrity and control of the Group’s financial statements and reports
- Compliance with legal and regulatory requirements
- Qualifications and independence of the external auditors
- Performance of the internal audit function and external auditors
The Audit Committee reports and makes recommendations to the Board of Directors, but the Board of Directors retains responsibility for implementing such recommendations.
The internal audit department prepares and implements a robust audit plan, to assess the adequacy and effectiveness of Hafnia’s governance, risk management and internal controls. This includes the operational, financial, compliance and information technology controls. Without assuming management responsibility, internal audit also provides independent, objective assurance and consulting services designed to add value and improve Hafnia’s operations and ensure that the control environment works effectively.
This helps Hafnia accomplish its stated objectives and goals by bringing a systematic, disciplined approach to add value and improve governance, risk management and internal controls. The Audit Committee is responsible for approving the terms of reference of internal audit and reviews the internal audit function’s adequacy and effectiveness. The Audit Committee also ensures that processes are in place for recommendations raised in internal audit reports and dealt with within a timely manner.
The internal audit department is staffed with individuals with the relevant qualifications and experience. However, where appropriate, independent internal or external technical specialists will be engaged to supplement the core team, and quality assurance and improvement practices. Internal auditors are expected to apply the care and skill expected of a prudent and competent auditor and consider using technology-based audit and other data analysis techniques in their work.
Hafnia has established a clear and concise authorisation manual that sets out, describes and defines roles and responsibilities in all aspects of the Company’s business financials, including:
- Governance & Senior Appointments
- Budgeting & Expenditure
- Financing & Financial Risk Management
- Public Relations, Media & Communication
- Legal & Liability Management
- Sales & Purchase Of Vessels
- Bunkers & Agents
- The Pools
Hafnia’s Remuneration Committee comprises of two Members; Andreas Sohmen-Pao (Chairman) and Erik Bartnes (Committee Member). The Board of Directors considers that Andreas Sohmen-Pao, who has many years of experience in senior management positions and on various boards, is well qualified to chair the Remuneration Committee. Together, the Remuneration Committee collectively have strong management experience and expertise on remuneration issues.
The members of the Remuneration Committee shall serve while they remain part of the Board of Directors, or until the Board of Directors decide otherwise or wish to retire from their appointment as Members of the Remuneration Committee. Any remuneration to be paid to the Remuneration Committee members is to be decided at the annual general meeting.
The Remuneration Committee’s primary purpose is to assist the Board of Directors in discharging its duty relating to determining the management’s compensation.
This includes but is not limited to:
- Oversee the governance of Hafnia’s remuneration policy
- Oversee the remuneration of the Board of Director and management
- Oversee the remuneration of the Board of Directors and management
- Approves framework of remuneration for the entire organisation, including increment and incentives
The Remuneration Committee shall report and make recommendations to the Board of Directors, but the Board of Directors retains responsibility for implementing such recommendations.
As provided for in its by-laws, Hafnia established a Nomination Committee at the 2020 Annual General Meeting of the Company. The Nomination Committee comprises of three Members; Andreas Sohmen-Pao (Chairman), Bjarte Bøe (Committee Member) and Elaine Yew Wen Suen (Committee Member).
The members of the Nomination Committee shall serve until the Annual General Meeting determines or they wish to retire from their appointment as Members of the Nomination Committee.
The Nomination Committee’s primary purpose is to identify and nominate candidates for the appointment, reappointment or termination of Members and Chairman of the Board of Directors, and make recommendations for these persons’ remuneration. The Nomination Committee plays an essential role in emphasising transparency and meritocracy at Hafnia. It plans for board succession while ensuring only candidates with the suitable attributes and expertise capable of contributing to the Company’s success are appointed.
Risk is inherent in the business activities of Hafnia, and managing them is critical for ensuring long-term success. Hafnia’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on Hafnia’s financial performance, to create sustainable value for our customers, employees, shareholders and the community. Hafnia’s results are dependent on the market for worldwide transportation of refined oil products. With that, the Company is exposed to a variety of financial risks: market risk (including price risk and currency risk), interest rate risk, credit risk, liquidity risk and capital risk.
The most significant risks are set out in the 2022 prospectus issued in March 2022. That document and other information on risks are available on the Company’s website at www.hafniabw.com.
Hafnia and its activities are primarily governed by the Bermuda Companies Act, its Memorandum of Association and its by-laws.
Certain aspects of Hafnia’s activities are governed by Norwegian law pursuant. In particular, the Norwegian Securities Trading Act and the Norwegian Stock Exchange Regulations will generally apply.
Principal risks faced by Hafnia and their definition:
Corporate governance report
The following report provides an overview of Hafnia’s key corporate governance practices regarding the Code.
For the year 2021, unless stated otherwise, Hafnia has complied with all material aspects laid out in the Code sections. Below is a summary disclosure on our compliance with the Code.
Section 1 – Implementation and reporting on corporate governance
Hafnia Limited (“Hafnia” or the “Company”) is a Bermuda limited liability company listed in Oslo.
The Board of Directors (the “Board”) oversees the overall conduct of Hafnia, ensuring that the Company is accountable to its stakeholders by ensuring implementation of business policies and practices which comply with applicable legislation, regulations, ethical and corporate governance guidelines. These policies are also designed to be fair and in accordance with leading market practices on stakeholder relations. The Company assumes all dealings with customers, potential customers, and other third parties are in full public view and accommodates all stakeholders’ reasonable expectations.
Hafnia is primarily governed by the Bermuda Companies Act, its Memorandum of Association and its bye-laws. Certain aspects of Hafnia’s activities are governed by Norwegian law pursuant. The Norwegian Securities Trading Act, related regulations and the continued ob- ligations for listed companies will generally apply. Hafnia’s business activities are also subject to the laws of the countries in which it at any time operates, as well as international law and conventions.
Each individual section of the Code is discussed in the following, and any deviations from the Code are set out and explained.
The Company does not deviate from Section 1 of the Code.
|Section of the Code||Deviations|
|1. Implementation and reporting on corporate governance||None|
|2. Business||The Company’s objectives are broader and more extensive than recommended in the Code|
|3. Equity and dividends||The Board has wider powers to issue any authorised but unissued shares and preference shares than what is recommended in the Code|
|4. Equal treatment of shareholders||None|
|5. Shares and negotiability||The Board may decline to register the transfer of any share in the Company if the transfer results in the Company being deemed a “Controlled Foreign Company” in Norway|
|6. General meetings||The chairman of the Board, or the president of the Company if there is one appointed, will chair the Company’s general meetings unless otherwise resolved by majority vote|
|7. Nomination Committee||Andreas Sohmen-Pao is both the Chairman of the Nom- ination Committee and of the Board and any member of the Board who is also a member of the Nomination Committee may offer himself for re-election to the Board|
|8. Board of Directors: Composition and independence||None|
|9. The work of the Board of Directors||None|
|10. Risk management and internal control||None|
|11. Remuneration of the Board of Directors||None|
|12. Remuneration of executive personnel||Performance-related remuneration is not subject to an absolute limit|
|13. Information and communications||None|
Section 2 – Business
The Company’s Business and objectives are described in the Company’s Memorandum of Association. In accordance with common practice for Bermuda incorporated companies (including those listed on the Oslo Stock Exchange), the Company’s objectives set out are wider and more extensive than recommended in the Code.
This represents a deviation from Section 2 of the Code.
The Board sets the tone and direction for Hafnia, defining clear objectives, strategies and risk profile, ensuring consistency with the Company’s long-term strategic goals in a sustainable manner taking into account financial, social and environmental considerations. For further information, please visit here. The Board conducts an annual review of Hafnia’s objectives, strategies and risk profile, evaluating present and future opportunities, threats and risks in the external environment. The Company’s executive management implements the Board’s decisions through managing and developing the business of Hafnia, ensuring that the policies and processes that are in place are compliant with the Board’s instructions. The strategy, objectives and corporate governance regime developed act as a foundation in the Company’s policy to integrate considerations into its business execution to deliver long-term value to the shareholders in a sustainable manner.
Stakeholders may read more about Hafnia’s strategy, objectives and risk profile elsewhere in the annual report.
Section 3 – Equity and dividends
Given the Company’s business’s dynamic and cyclical nature, the Board regularly reviews and monitors the Company’s capital structure to ensure it is in line with the Company’s objective, strategy, and risk profile. This ensures that the business’ activities and growth are funded sensibly and prudently by achieving a more efficient capital structure that seeks to reduce the Company’s overall cost of capital.
The Board has established a clear and predictable dividend policy based on a targeted quarterly dividend with a pay-out ratio of 50% of annual net profit, adjusted for extraordinary items. The final amount of dividend is to be decided by the Board. In addition to cash dividends, the Company may also from time to time consider buying back shares as part of its total distribution to shareholders.
In deciding whether to declare a dividend and determining the dividend amount, the board will take into account the Group’s capital requirements, including capital expenditure commitments, financial condition, general business conditions, legal restrictions, and any restrictions under borrowing arrangements or other contractual arrangements in place at the time.
Pursuant to Bermuda law and in accordance with common practice for Bermuda incorporated companies, the Board has the authority to issue any authorised unissued shares in the Company on such terms and conditions as it may decide and may exercise all powers of the Company to purchase the Company’s own shares. The powers of the Board to issue and purchase shares are neither limited to specific purposes nor to a specified period as recommended in the Code.
This represents a deviation from Section 3 of the Code.
Section 4 – Equal treatment of shareholders
The Company has one class of shares, meaning all shares in the Company carry equal rights, including the right to participate and vote in general meetings. As such, all shareholders will be treated equally unless there is just cause for treating them differently.
As the Company is a Bermuda limited company, shareholders do not have the same preferential rights in a future offering of shares in Hafnia as shareholders in Norwegian limited liability companies normally have. This is common practice for Bermuda limited companies, including those listed on the Oslo Stock Exchange.
The Company does not deviate from Section 4 of the Code.
Section 5 – Shares and negotiability
The shares are generally freely negotiable. However, the Board may decline to register the transfer of any share, where such transfer would, in the opinion of the Board, likely result in 50% or more of the aggregate issued and outstanding share capital of the Company being held or owned directly (or indirectly) by individuals or legal persons resident for tax purposes in Norway, or alternatively, such shares being effectively connected to a Norwegian business activity, or the Company otherwise being deemed a “Controlled Foreign Company” as such term is defined pursuant to Norwegian tax legislation. The purpose of this provision is to avoid the Company being deemed a Controlled Foreign Company pursuant to Norwegian tax rules.
The Company’s bye-laws also provide the Board the authority to decline the registration of the transfer of “Default Securities” (as defined in the Company’s bye- laws), i.e. shares belonging to unidentified shareholders or any other person who, upon due notice from the Company, have failed to disclose his, her or its interest in company securities.
Both of the above restrictions are common practice for Bermuda limited companies listed on the Oslo Stock Exchange, but represent deviations from Section 5 of the Code.
Section 6 – General meetings
The Company encourages all shareholders to participate in and to vote at general meetings. In order to facilitate shareholder participation, the Board will ensure that:
- The resolutions and supporting documentation, if any, will be sufficiently detailed, comprehensive and specific to allow shareholders to understand and form a view on matters that are to be considered at the general meeting;
- The registration deadline, if any, for shareholders to participate at the general meeting will be set as closely to the date of the general meeting as practically possible and permissible under the provision in the Company’s bye-laws;
- The shareholders will have the opportunity to vote on each individual matter, including on each candidate nominated for election to the Company’s Board and committees (if applicable); and
- The board members, the chairman of the Nomination Committee and the auditor (where attendance is regarded as essential) will be present at the general meeting.
Shareholders who are not able to attend the general meeting will be given the opportunity to vote by proxy or to participate by using electronic means. The Company will in this respect:
- Provide information on the procedure for attending by proxy in the notice;
- Nominate a person who will be available to vote on behalf of shareholders as their proxy; and
- Prepare a proxy form which will, insofar as this is possible, be formulated in such a manner that the shareholder may vote on each item that is to be addressed and vote for each of the candidates that are nominated for election.
The Company secretaries will also prepare minutes from the general meetings. These minutes aim to capture the essence of the meeting, its comments and results from the resolutions.
Pursuant to common practice for Bermuda incorporated companies, the chairman of the Board, or the president of the Company if there is one appointed, will chair the Company’s general meetings unless otherwise resolved by majority vote.
This represents a deviation from Section 6 of the Code. However, there will be routines to ensure that an independent person is available to chair the general meeting or a particular agenda with regards to any matters related to the chairman.
Section 7 – Nomination committee
As provided for in its bye-laws, Hafnia established a Nomination Committee at the 2020 Annual General Meeting of the Company.
The Nomination Committee’s duties include proposing candidates for election to the Board and the Nomination Committee itself. As part of its work in proposing candidates for election to the Board, the Nomination Committee will provide reasoned recommendations for any candidate and seek to consult shareholders concerning proposals for candidates’ appointment.
Andreas Sohmen-Pao is both the Chairman of the Nomination Committee and of the Board. This represents a deviation from Section 7 of the Code. The intention is to replace Andreas Sohmen-Pao with a member that is not an executive personnel nor a member of the Board at the Annual General Meeting to be held in 2022.
Pursuant to the Nomination Committee guidelines, a member of the Board who is also a member of the Nomination Committee may offer him or herself for reelection to the Board.
This deviation from Section 7 of the Code. The intention is to adopt a set of amended guidelines at the Annual General Meeting to be held in 2022 to reflect that Nomination Committee cannot include any executive personnel nor any member of the Board.
Visit here for further information regarding the Nomination Committee and its responsibilities.
Section 8 – Board of Directors: Composition and independence
The Company believes that the composition of the Board ensures that the Board has a good balance of knowledge, expertise and diversity appropriate to promote different perspectives and mitigate the risk of groupthink. This helps the Board to attend to duties towards the Company and its stakeholders effectively. An introduction to the members of the Board and their expertise is included here.
The Board currently consists of seven board members but the number of directors of the Company may be increased to eight. The board members work together to exercise proper supervision of the Company’s business, compliance, performance and work done by the Company’s management. The chairperson of the Board is elected by the shareholders.
Three out of seven of the board members are independent of the Company, its main shareholders and material business contacts, and the Company’s executive management is not represented on the Board. The members of the Board serve for periods of two years at the time, after which they are reevaluated for potential reelection. The benefit of continuity in the Board’s composition will be balanced against the potential benefits of renewal and independence. The members of the Board are encouraged to own shares in the Company.
The Company does not deviate from Section 8 of the Code.
Section 9 – The work of the Board of Directors
The Board oversees the overall conduct of the Company’s affairs and the day-to-day management of the Company.
The Board’s duties and responsibilities are set out in detail in the Company’s bye- laws. The Board emphasises clear allocation of responsibilities amongst members and between the Board and executive management for increased accountability. Various guidelines have been adopted for both the Board and executive management.
To ensure independence, directors, officers and executive personnel of the Company are required to notify the Board if they directly or indirectly have a material interest in any transaction carried out by the Company. Members of the Board and executive personnel are to recuse themselves from decisions that they have a special interest in so that such items can be considered unbiased. Another director will chair discussions on significant matters if the chairman of the Board has been actively involved outside of his role as chairman of the Board.
The Board has established an Audit Committee consisting of two of the board members and has adopted guidelines for the Audit Committee’s work. Visit here for further information regarding members of the Audit Committee and their responsibilities.
The Board has also established a Remuneration Committee to ensure due and independent preparation of matters relating to executive personnel compensation. Visit here for further information regarding the members of the Remuneration Committee and their responsibilities.
The Board established a Nomination Committee at the 2020 Annual General Meeting to ensure Board succession through identifying and nominating candidates for the appointment of members of the Board. Visit here for further information regarding the members of the Nomination Committee and their responsibilities.
The Board’s internal assessment and performance evaluation was carried out in 2021, to the overall satisfaction of the directors.
The Board aims to annually assess the effectiveness and performance as a whole and of its committees. This ensures that it fulfils its duties and responsibilities satisfactorily and uncovers key areas for improvement and requisite follow-up actions.
In cases of transactions between the Company and a shareholder, a shareholder’s parent company, director, officer or executive personnel of the Company or persons closely related to any such parties, which are not immaterial for either the Company or the close associate involved, the Board will obtain a valuation from an independent third party. Agreements with related parties are given account for in the annual report.
The Company does not deviate from Section 9 of the Code.
Section 10 – Risk management and internal control
The Board is responsible for overseeing risk management in the Company, ensuring appropriate control procedures and systems are in place to manage its exposure to risks that are inherent to the Company’s business. The Company recognises the importance of balancing risks and rewards to pursue business opportunities within its risk appetite. Such procedures also support the quality of the Company’s financial reporting and compliance with applicable laws and regulations.
Visit here for an overview of Hafnia’s central risks and its business.
Management and internal reporting and control mechanisms are based on Company-wide policies and internal guidelines in areas such as Finance and Accounting, Health, Safety, Security, Environment & Quality (HSSEQ), Ship Operations and Project Management, in addition to implementation and the follow-up of a risk assessment process. The Company’s policies and guidelines is imperative to the Company’s internal control and risk limitations and are designed to ensure that the Company’s vision, policies, goals and procedures are known and adhered to. This also helps to instil discipline and reinforces the Company’s risk culture regarding the nature and extent of risks that the Company is willing to accept.
The Company has implemented frequent management reporting sessions where both operational and financial matters are analysed and reported to relevant decisionmakers, allowing them to respond quickly to changing conditions. This helps to provide reasonable assurance against foreseeable events that may adversely affect the Company’s business objectives. The Company has established clear and safe communication channels between the employees and management to ensure effective reporting of any illegal or unethical activities in the Company, as such activities may be detrimental to the Company’s reputation, financial well-being as well as to the Company’s various stakeholders.
The Board carries out annual reviews of the Company’s most important areas of exposure to risk and its internal control arrangements.
The Company does not deviate from Section 10 of the Code.
Section 11 – Remuneration of the Board of Directors
The Company seeks shareholders’ approval at the annual general meeting regarding the remuneration of the Board. No director decides his or her own fees. Rather, in determining the remuneration of the Board, the Board’s responsibility, expertise, time commitment and the complexity of the Company’s activities will be considered.
To maintain the Board’s independence, the Board’s remuneration will not be linked to the Company’s performance, nor does the Company intend to grant share options, similar instruments or retirement benefits to board members as consideration for their work.
As a rule, the directors do not undertake special tasks for the Company in addition to their directorship. Fees for any such services rendered should be approved by the Board.
The Company does not deviate from Section 11 of the Code.
Section 12 – Remuneration of executive personnel
The Board has adopted guidelines and principles for determining the remuneration of executive personnel, which have been presented to the shareholders and will be communicated to the annual general meeting. The guidelines are clear and understandable, and contribute to the Company’s business strategy, long term interests and financial sustainability. Such guidelines are not a requirement under Bermuda law and will therefore not be subject to the annual general meeting’s approval.
The Remuneration Committee administers all the performance-related elements of remuneration of executive management. The remuneration annually prepares recommendations to the Board, considering inter alia responsibility, expertise, time commitment and the complexity of the Company’s activities. The remuneration paid to executive management will aim to ensure a convergence of the financial interests of the shareholders and executive management. The Company has inter alia adopted a long-term share incentive program for executive management and is made easily understandable designed to align the interests of executive management with those of shareholders and link rewards to corporate and individual performance.
Performance-related remuneration is not subject to an absolute limit.
This represents a deviation from Section 12 of the Code.
Section 13 – Information and communication
The Board has adopted guidelines for the Company’s communication with shareholders and how the Company will make information available to shareholders outside of general meetings. Hafnia values openness and transparency towards its shareholders and is committed to disclosing to shareholders as much relevant information as is possible in a timely and accurate manner. All communications and announcements of information will take into account the requirement for equal treatment of the Company’s shareholders.
The Company publishes an updated financial calendar with dates for important events such as the annual general meeting, publishing of interim reports, public presentations and payment of dividends (if applicable) on the Company’s website and on Newsweb.
The Company does not deviate from Section 13 of the Code.
Section 14 – Take-overs
The Company has established key principles for how to act in the event of a take-over offer. In the event of a take-over process, the Board has a duty to ensure that the Company’s shareholders are treated equally and that the Company’s activities are not unnecessarily interrupted. The Board will also ensure that the share- holders have sufficient information and time to assess the offer.
In the event of a take-over process, the Board will abide by the principles of the Code and also ensure that the following take place:
- The Board will ensure that the offer is made to all shareholders, and on the same terms;
- The Board shall not undertake any actions intended to give shareholders or others an unreasonable advantage at the expense of other shareholders or the Company;
- The Board should not enter into an agreement with any offeror that limits the Company’s ability to entertain other offers for the Company’s shares, unless it is obvious that such an agree- ment is in the common interest of the Company and its shareholders;
- The Board shall strive to be completely open about the take-over situation. Agreements between the Company and the offeror which are of significance for the market’s assessment of the offer shall be made know to the market no later than the time when the market is notified of the offer;
- The Board shall not institute measures which have the intention of protecting the personal interests of its members at the expense of the interests of the shareholders; and
- The Board acknowledges the particular duty the Board carries for ensuring that the interests of the shareholders are safeguarded.
The Board shall not attempt to prevent or impede the take-over bid unless this has been decided by the share- holders in a general meeting in accordance with applicable laws. The main underlying principles shall be that the Company’s common shares shall be kept freely transferable and that the Company shall not establish any mechanisms which can prevent or deter take-over offers unless this has been decided by the shareholders in a general meeting in accordance with applicable law.
If an offer is made for a Company’s common shares, the Board shall issue a statement evaluating the offer and making a recommendation as to whether shareholders should or should not accept the offer. If the Board finds itself unable to give a recommendation to the shareholders on whether or not to accept the offer, it should explain the reasons for this. The Board’s statement on a bid shall make it clear whether the views expressed are unanimous, and if this is not the case, it shall explain the reasons why specific members of the Board have excluded themselves from the statement.
The Board may also consider to arrange a valuation from an independent expert. An independent valuation will be arranged if any member of the Board, close associates of such member or anyone who has recently held a position but has ceased to hold such a position as a member of the Board, is either the bidder or has a particular personal interest in the bid. This will also apply if the bidder is a major shareholder of the Company. Any such valuation should either be enclosed with the Board’s statement, or reproduced or referred to in the statement.
The Company does not deviate from Section 14 of the Code.
Section 15 – Auditor
The Company’s auditor is appointed by the Company’s annual general meeting and is responsible for the audit of the Company’s consolidated financial statements.
The auditor participates in the Audit Committee’s review and discussion of the annual accounts and quarterly interim accounts. Annually, the auditor will submit an audit workplan to the Board or the Audit Committee. The auditor normally participates in Board meetings that deal with annual accounts and accounting principles. The auditor will also assess any important accounting estimates and matters of importance on which there has been disagreement between the auditor and the Company’s executive management and/or the Audit Committee. At least once a year, the auditor shall present to the Board or the Audit Committee a review of the Company’s internal control procedures, including identified weaknesses and proposals for improvement. Further, the Board will normally hold a meeting with the auditor at least once a year at which no representative of the executive management is present.
The Board is responsible for determining whether executive management may engage the auditor for other purposes than auditing. The auditor is required to annually confirm his or her independence in writing to the Audit Committee.
The Board will give the shareholders an account at the annual general meeting of the remuneration paid to the auditor, including details of the fee paid for audit work and any fees paid for other specific assignments.
The Company does not deviate from Section 15 of the Code.