Corporate governance

In pursuing the Code, the Board and the Management shall contribute to achieving the following objectives:

• Openness and transparency in communication with its stakeholders;
• Independence in the relationship between the Board, the Management and the owners to ensure that decisions are made on an unbiased and neutral basis;
• Equal treatment and equal rights for all shareholders; and
• Good control and corporate governance mechanisms to secure predictability and reduce the level of risks for owners and other stakeholders.

B2Holding’s mission is “bridging the gap”. Through its business solutions, the Group shall contribute to handling society’s debt problems and bridge the gap that defaulted debt creates in the credit chain. B2Holding’s business is about people and creating shared value for business and society. The Group is a socially responsible creditor and a trusted solutions provider to vendors and co-investors.

B2Holding has defined five core values: Agility, Integrity, Diversity, Excellence and Responsibility. The core values demonstrate the Group’s culture by being a common language of all employees, guiding behaviour and actions.

The Board actively adheres to good corporate governance standards and will at all times ensure that B2Holding complies with the requirements of section 3-3b of the Accounting Act and the Code. This is done through ensuring and clarifying who is accountable for what, and through integrating corporate governance as an integral part of the decision-making process in all matters dealt with by the Board. B2Holding’s corporate governance principles are subject to annual review and discussion by the Board. This Corporate governance report is an integral part of the Directors’ report and was considered in a Board meeting.

The following sections and governance principles are structured in the same way as the Code and cover each respective point of the Code describing B2Holding’s corresponding compliance efforts.

B2Holding is furthermore committed to promoting sustainable social development by operating in line with responsible business principles, systematically improving its operational standards with a focus on the external environment, climate, and energy resources. Further, sustainable social development includes, investing in non-performing loan portfolios that can generate positive effects for the local banking sector and the local non-banking industries in general. B2H believe that such commitment will generate financial results for the stakeholders and positive social effects for the society.

No deviations from the Code.

B2Holding’s vision is to be a trusted and innovative partner that actively re-shapes the credit management industry in all the Group’s markets and achieve or maintain a top-five market position in the respective NPL markets, whereby efficiency is more important than geographic footprints.

Efficiency is a prerequisite for sustainable platforms and is strived for through adopting digital transformation processes and leverage scale on Group projects. Group strategy and goals are assessed and evaluated annually.

The sustainability report outlines the Group’s 2020 sustainability performance and constitutes the first Communication on Progress as a participant under the UN Global Compact.

In order to improve transparency and risk management, the first step is to start measuring and identifying. A separate risk management function was established in 2019, and reports and follows up on risk exposures in all business areas in a controlled and consistent manner. Added to that, the Legal and Compliance functions also became more closely linked, and work in tandem under the Chief Legal and Compliance Officer.

To further support the risk management principles, B2Holding has towards the year-end recruited a senior internal auditor, thus fulfilling the Group’s senior positions in the risk, compliance and internal control area.

B2Holding keeps the market updated through investor presentations in connection with quarterly financial reporting, industry market days and frequent business updates in compliance with the Continuing Obligations of Oslo Børs. This information to the market has continued during the extraordinary working situation of the Covid-19 pandemic.

No deviations from the Code.

The Board is responsible for ensuring that the Group is adequately capitalised and financed, relative to the risk and scope of operations in its various jurisdictions, and that the capital requirements set forth in laws, regulations and the Groups respective licenses are met.

The Board monitors the Group’s capital structure on an ongoing basis and will immediately take adequate steps should it seem apparent that at a given time the Company’s equity or funding structure is or becomes less than adequate.

The Company is financed through a long-term bank loan facility, Revolving Credit Facility (RCF), and four long-term bond loans that work in a waterfall system where the bond loans are subordinated to the RCF in a structure with harmonized covenants.

The Board is also monitoring the Group’s capital structure in order to provide funding to meet market opportunities and achieve operational flexibility.

Dividend policy

The Company will, at all times, have a clear and predictable dividend policy established and revised annually by the Board. The dividend policy forms the basis for the Board’s proposals on dividend payments to the Annual General Meeting and shall be publicly disclosed.

In deciding whether to propose a dividend and in determining the dividend amount, the Board considers both the applicable legal restrictions as set out in the Norwegian Public Limited Companies Act as well as B2Holding’s solidity and future capital requirements.

This assessment includes liquidity and solidity risk, market opportunities, timing effect from portfolio recoveries, financial covenants, general business conditions and any capital restrictions at the time of the dividend to be assessed and paid.

The Company aims to distribute 20-30 % of the Group’s net profits as a dividend to its shareholders. There can however be no assurance that a dividend will be proposed or declared in any given year. If a dividend is proposed or declared, there is also no assurance that the dividend amount or yield will automatically be in the range mentioned above.

Due to the continuing uncertainty under and following the ongoing Covid-19 pandemic, and the largely unknown consequences of the government measures that are implemented as a response to the pandemic, the Board maintains its assessment and propose for the Annual General Meeting 2021 not to pay dividend for the year 2020.

The Board will assess the situation on an ongoing basis and will ask the Annual General Meeting 2021 for authorization to reconsider dividends for 2020 if the situation should return to a more predictable situation during the year.

B2Holding’s dividend policy is available on the Company’s website.

Authorisations to the Board

Any authorisations granted to the Board by the General Meeting to increase the share capital will be restricted to the defined purposes. When the General Meeting should pass resolutions on authorisations to the Board for the increase of share capital for different purposes, each such authorisation shall be considered and resolved separately by the General Meeting.

Authorisations granted to the Board to increase the share capital or purchase treasury shares shall be limited in time, and shall in no instance last beyond the next Annual General Meeting.

No deviations from the Code.

B2Holding maintains only one class of shares. Each share carries one vote, and all shares carry equal rights, including the right to participate and vote in the Annual General Meetings. All shareholders are treated on an equal basis unless there are just grounds for different treatment.

Share issues without pre-emption rights for existing shareholders

In the event of an increase in share capital through the issuance of new shares, a decision to waive the existing shareholders’ pre-emptive rights to subscribe for shares will be justified. Where the Board resolves to issue shares and waive the pre-emptive rights of existing shareholders pursuant to an authorisation granted to the Board by the General Meeting, the justification will be publicly disclosed in a stock exchange announcement issued in connection with the share issuance.

Transactions in treasury shares

Any transactions carried out by B2Holding in its treasury shares, will be carried out through Oslo Børs, and in any case at the prevailing stock exchange rates. In the event there is limited liquidity in the shares, B2Holding will consider other ways to cater for equal treatment of shareholders. There have been no such transactions in 2020.

Approval of agreements with shareholders and other close associates

In the event of transactions that are not considered immaterial between B2Holding and its shareholders, a shareholder’s parent company, members of the Board, executive personnel of the Group or close associates to any such party, the Board will arrange for an independent third-party valuation.

This will, however, not apply for transactions that are subject to the approval of the General Meeting pursuant to the provisions in the Norwegian Public Limited Companies Act. Independent valuations will also be procured for transactions between companies within the Group if any of the companies involved have minority shareholders.

No deviations from the Code.

The shares of B2Holding are freely negotiable and there is currently no restriction on the ability to own, trade or vote. Each share carries one vote.

No deviations from the Code.

The Board ensures that as many of the shareholders as possible can exercise their voting rights in the General Meetings and that the General Meetings are an effective forum for our shareholders and the Board. As a result of the Covid-19 pandemic, the Norwegian Ministry of Trade, Industry and Fisheries has adopted a new regulation that allows companies’ boards to decide that general meetings shall be held in whole or in part without a physical meeting. Digital general meetings and digital meeting attendance should therefore not be considered a deviation from the Code’s recommendation.

As of 31 December 2020, the Company’s total outstanding number of shares numbered 409,932,598 distributed among 5,632 shareholders. Each share carries one vote. All shareholders listed in the shareholders’ register on the day prior to the Annual General Meeting are entitled to participate at the Annual General Meetings either in person or by proxy and are entitled to vote relative to their respective shareholdings.

B2Holding’s corporate governance principles state that the General Meetings shall be facilitated through the steps described in the Code and regulated by the Norwegian Accounting Act. This includes among others, the distribution of sufficiently detailed and comprehensive information allowing the shareholder to form a view on all matters. Notice to the shareholders is given no less than three weeks prior to the General Meeting, and the registration deadline is set as closely as possible to the date of the General Meeting.

The Board will ensure that the General Meeting is chaired by an independent person.

Participation without being present

Shareholders who are unable to attend a General Meeting will be given the opportunity to vote by proxy. B2Holding will in this respect provide information on the procedure for voting by proxy and for nominating a person to vote on behalf of shareholders as their proxy.

A proxy form will be prepared and made available, which shall be set up so that it is possible to vote on each of the items on the agenda and for candidates that are nominated for election, one by one.

Due to the Covid-19 pandemic and the governmental measures implemented to prevent the possible further spread of the virus, the Board will request shareholders to use the possibility of casting advance votes or voting by proxy.

No deviations from the Code.

In accordance with its Articles of Association, Section 7, B2Holding has established a Nomination Committee. The Annual General Meeting elects the members as well as the Chair of the Nomination Committee for a period of two years and determines their remuneration.

The majority of the Nomination Committee shall be independent from the Board and the Management. No more than one member of the Nomination Committee may also be a member of the Board, in which case such member may not be re-elected to the Board. The Group CEO and other members of the Management shall not be members of the Nomination Committee.

The objectives, responsibilities and functions of the Nomination Committee follow the rules and standards applicable to the Group and are described in “Instructions for the Nomination Committee” as disclosed on the Company’s webpage. The Annual General Meeting shall adopt the Instructions for the Nomination Committee. The Company shall provide information regarding the members of the Nomination Committee and deadlines for submitting proposals to the Nomination Committee.

The Nomination Committee shall recommend candidates for the election of members and Chair of the Board, candidates for the election of members and chair of the Nomination Committee, and remuneration for the Board and the Nomination Committee.

The Nomination Committee’s recommendation of candidates to the Nomination Committee shall ensure that they represent a broad cross-section of the shareholders as well as being balanced with regards to independence. The Nomination Committee’s recommendation of candidates to the Board shall ensure that the Board composition complies with the applicable legal requirements, the Code and B2Holding’s corporate governance principles.

The proposals from the Nomination Committee shall include motivated grounds.

No deviations from the Code.

The composition of the Board considers and is grounded on expertise, capacity and diversity deemed appropriate and necessary to attain B2Holding’s goals, main challenges, and the common interests of all stakeholders. Furthermore, members of the Board should be willing and able to work as a team, resulting in the Board working effectively as a collegiate body.

In accordance with the Code and B2Holding’s corporate governance principles, the Board is composed independently from any special interests. A majority of the members of the Board shall be independent of the Management and material business connections of the Group.

Furthermore, at least two of the members of the Board shall be independent of B2Holding’s majority shareholder(s). According to B2Holding’s corporate governance principles, “a majority shareholder” means a shareholder who owns or controls 10 % or more of the Company’s shares or votes, and “independence” entails that there are no circumstances or relations that could be expected to influence the independent assessments of the person in question.

No member of the Company’s Management should be a member of the Board. The Chair of the Board is elected by the Annual General Meeting. The term of office for members of the Board shall not be longer than two years at a time. Members of the Board may be re-elected, and phases of terms should be taken into account.

B2Holding’s annual report provides information regarding the expertise of the members of the Board, as well as information on their history of attendance at board meetings. The annual report will furthermore identify the members of the Board who are independent. Members of the Board are encouraged to own shares in B2Holding.

No deviations from the Code.

The Board has issued “Board of Directors’ rule of procedure” which regulate its own activities and a separate instruction for the CEO which particularly focuses on clear internal allocation of responsibilities and duties as well as providing the Board with accurate, relevant, and timely information sufficient for the Board to carry out its duties.

The objectives, responsibilities and functions of the Board and the CEO shall be revised annually and remain in compliance with the rules and standards applicable to the Group.

The corporate governance principles state that members of the Board and executive personnel must notify the Board when such members have any direct or indirect interest in a transaction carried out by B2Holding. In matters where the Chair of the Board is personally involved, the Board’s consideration of such matter is chaired by another member of the Board.

Audit Committee

The Board has established an Audit Committee with a separate instruction. The duties and composition of the Audit Committee are in compliance with the Norwegian Public Limited Companies Act. The committee is a working and preparatory committee for the Board, preparing matters and acting in an advisory capacity.

The members of the Audit Committee are elected by and from the members of the Board for a term of up to two years. The Audit Committee members must have the overall competence required to fulfil their duties based on the organisation and operations of the Group. At least one member of the Audit Committee should be competent in respect of finance and audit and be independent of the Group. The majority of the members shall be independent of the Management.

The objectives, responsibilities and functions of the Audit Committee shall be revised annually and follow rules and standards applicable to the Group that are described in the “Instructions for the Audit Committee”.

Remuneration Committee

The Board has established a Remuneration Committee with a separate instruction as a preparatory and advisory committee for the Board in questions relating to remuneration of the Management.

The purpose of the Remuneration Committee is to ensure thorough and independent preparation of matters relating to the remuneration provided to the Management. The Remuneration Committee puts forth a recommendation for the Board’s guidelines for remuneration to senior executives in accordance with Section 6-16a of the Public Limited Companies Act.

The members of the Remuneration Committee are elected by and from the members of the Board for a term of up to two years and shall be independent of the Management.

The objectives, responsibilities and functions of the Remuneration Committee shall be revised annually and be in compliance with rules and standards applicable to the Group and are described in the “Instructions for the Remuneration Committee”.

The Board provides the details for the appointment of Board committees in the annual report.

Annual evaluations

The Board annually evaluates its performance and expertise relating to the previous year. The Board has a separate item on the agenda without the management present when deemed appropriate.

No deviations from the Code.

As a part of B2Holding’s risk management, the Board has adopted a risk profile and appetite as further set out in the internal policies. B2Holding shall comply with all laws and regulations that apply to the Group’s business activities. B2Holding’s compliance policy describes the main principles for compliance and how the compliance function is organised. The Group must not be associated with operations that could harm its reputation.

B2Holding has approved policies, and guidelines in the following areas to support its objective in respect of internal control and risk management:

• Ethics, Code of Conduct
• Environmental, Social and Governance (Corporate Social Responsibility)
• Risk management
• Compliance (including Group policies covering anticorruption, anti-money laundering, sanctions, and whistleblowing)
• Communication
• Financial management, including guidelines for quality assurance of financial reporting
• People and organisation, including guidelines for variable remuneration
• Shareholder relations
• Internal Audit

The Board conducts an annual review of the most important areas of exposure to risk and such areas’ internal control arrangements.

B2Holding has a separate risk function on Group level led by the Chief Risk Officer reporting to the CEO with a dotted line to the Audit Committee, and have established an Internal Audit function reporting to the Audit Committee.

The Director’s report describes the main features of the internal control and risk management systems. The Board is obligated to ensure that it is updated on the Company’s financial situation, and continuously evaluate whether the Company’s equity and capital structure are adequate in terms of the risk from, and scope of, the Company’s activities, and shall immediately take the necessary action if it is demonstrated at any time that the Company’s capital or funding structure is inadequate.

The Company shall focus on frequent and relevant management reporting to the Board of both operational and financial matters with the purpose of ensuring that the Board has sufficient and relevant information for decision making and is able to respond quickly to changing conditions.

As of writing this report, the Covid-19 pandemic is still affecting the countries were B2Holding has presence and the full extent, consequences and duration of the pandemic are not possible to predict. However, the continued restrictions to prevent the spread of various mutations of the Covid-19 pandemic will undoubtedly have a severe negative impact on European economies. The liquidity situation and balance sheet position of B2Holding is assessed to be satisfactory and controllable and meets the requirements under the loan agreements.

No deviations from the Code.

The remuneration of the Board is determined by the shareholders at the Annual General Meeting based on the proposal from the Nomination Committee.

The level of remuneration should reflect the Board’s responsibility, expertise, the complexity of the Company, as well as time spent and the level of activity in both the Board and any Board committees.

The remuneration of the Board is not linked to B2Holding’s performance and share options are not granted to members of the Board.

Board members, or companies associated with Board members, do not engage in specific assignments for B2Holding in addition to their appointments as members of the Board. If they, nonetheless, do take on such assignments, the entire Board must be informed and the consideration for such additional duties is subject to approval by the Board. In cases where there are special grounds, consideration may be presented to the Nomination Committee on the recommendation from the Board and the Nomination Committee may, in its opinion, submit proposals to the Annual General Meeting.

Any consideration paid to members of the Board in addition to their board remuneration will be specifically identified in the annual report. There is no such remuneration paid to members of the Board except for the remuneration approved by the Annual General Meeting on 27 May 2020.

No deviations from the Code.

B2Holding’s policy for determining remuneration to the CEO and members of the Management should always support the Group values and strategy. The total remuneration to the CEO and other senior executives consists of a base salary, benefits, annual bonus, share options, and pension and insurance schemes.

Performance-related remuneration of the Management in the form of annual bonus and share option programme, is designed to enhance value creation for shareholders or B2Holding’s profit over time through quantifiable factors which the employee may influence.

A cap is set on performance-related remuneration. The Board annually prepares a policy for the remuneration of the Management. The policy will contribute to aligning the interests of shareholders and Management and is presented at the Annual General Meeting for its consideration in a separate document sent out together with the notice to the Annual General Meeting. The documents shall include an annual executive compensation plan and a long-term incentive plan.

The Annual General Meeting will vote for both elements separately. The Annual General Meeting’s decision regarding the guidelines in the statements are to be taken as advisory by the Board and where there are share instruments involved as a long-term incentive, the vote will be binding on the Company.

Reference is made to note 30, Remuneration, in the Consolidated financial statements as well as the declaration from the Board to the Annual General Meeting.

No deviations from the Code.

Guidelines have been established to secure timely and precise information to shareholders, Oslo Børs, and the financial markets in general. Relevant information is given out in the form of annual reports, semi-annual reports, quarterly reports, capital market days, stock exchange releases, and investor presentations in accordance with what is deemed appropriate from time to time. B2Holding aims to clarify its long-term potential, including strategies, value drivers and risk factors.

Unless exceptions apply and are invoked, B2Holding will promptly disclose all inside information (as defined by the Norwegian Securities Trading Act). In all circumstances, B2Holding will provide information about certain events, e.g. particular decisions by the Board and the Annual General Meeting concerning dividends, amalgamations, mergers/demergers or changes to the share capital, the issuing of subscription rights, convertible loans and all agreements of major importance that are entered into by the Company and related parties.

Separate guidelines have been drawn up for the proper handling of inside information, see “Instructions for handling of inside and confidential information” and “Rules for primary insiders” available on the Company’s website.

In addition to the Board’s dialogue with the shareholders in the Annual General Meetings, the Board makes suitable arrangements for shareholders to communicate with B2Holding at other given times. Communications with the shareholders should always follow the provisions of applicable laws and regulations and consider the principle of equal treatment of shareholders.

As part of the investor relations activities, dedicated representatives from the Management meet with investors and financial analysts through regular roadshows, investor conferences, group and individual meetings, and ad hoc calls and e-mails. B2Holding aims to host capital markets days and similar events as needed in order to further increase transparency and dialogue with investment communities.

B2Holding endeavours to reply promptly and precisely with relevant information in communications with its stakeholders, if they clearly do not require the disclosure of inside information or are otherwise deemed to be potentially damaging to the Group.

No deviations from the Code.

In a take-over process, the Board and Management each have an individual responsibility to ensure that B2Holding’s shareholders are treated equally and that there are no unnecessary interruptions to the Group’s business activities. The Board has a particular responsibility in ensuring that the shareholders have sufficient information and time to assess the offer.

In the event of a take-over process, the Board shall abide by the principles of the Code, and ensure that the following takes place:

• the Board will not seek to hinder or obstruct any takeover bid for the Company’s operations or shares unless there are particular reasons for doing so;
• 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 shall not institute measures with the intention of protecting the personal interests of its members at the expense of the interests of the shareholders; and
• the Board must be aware of the duty it has for ensuring that the values and interests of the shareholders are protected.

In the event of a take-over bid, the Board will, in addition to complying with relevant legislation and regulations, seek to comply with the recommendations in the Code. This includes obtaining a valuation from an independent expert. On this basis, the Board will make a recommendation as to whether the shareholders should accept the bid.

Deviations from the Code:
There are no other written guidelines for procedures to be followed in the event of a takeover bid. The Group has not found it appropriate to draw up any explicit basic principles for B2Holding’s conduct in the event of a takeover bid, other than the actions described above. The Board otherwise concurs with what is stated in the Code regarding this issue.

No deviations from the Code except what is reported above.

The Board works to ensure that the auditor presents the main features of the plan for its work regarding audits to the Audit Committee and the Board.

The auditor participates in the meeting(s) of the Board and the Audit Committee where any of the following topics are on the agenda: the annual accounts, accounting principles, assessment of any accounting estimates and matters of importance on which there has been disagreement between the auditor and the Management and/or the Audit Committee.

The Audit Committee and the Board hold a meeting with the auditor at least once a year at which no representative of the Management is present.

The Board has specified the Management’s right to use the auditor for other purposes than auditing also reflecting the amendments to the Norwegian Auditor Act as of 20 November 2020 harmonising the Norwegian Auditor Act with EU regulations.

The Board reports the remuneration paid to the auditor to the shareholders at the Annual General Meeting.

No deviations from the Code.