Total value of prevented digital fraud against our customers in 2018 (NOK million)
266

Governance

Corporate governance

Corporate governance in DNB is about how the Board of Directors and group management govern and manage the company to preserve and develop the company’s values in an optimal manner. Sound corporate governance and good leadership is a prerequisite for ensuring sustainable operations. The governance of DNB shall ensure that DNB’s business operations are conducted in a responsible and profitable manner, in the best interests of customers, shareholders, employees and other stakeholders.

DNB’s management and Board of Directors annually review the principles for corporate governance and how they are implemented in the Group. DNB hereby gives an account of the Group’s corporate governance principles and practice pursuant to the Financial Institutions Act with appurtenant regulations, as well as section 3-3b of the Norwegian Accounting Act and the Norwegian Code of Practice for Corporate Governance.

 

The chapter is divided into three parts:

 

Describes the main priorities of the Board of Directors in 2018

Accounts for DNB’s compliance with section 3-3b second paragraph of the Norwegian accounting act. DNB does not deviate from the requirements in any way.

Accounts for how DNB follows up the Norwegian code of practice for corporate governance. DNB complies with the code of practice. A minor deviation is accounted for in section 14.

 

 

 

In 2018, the Board took a number of active steps that were in line with the most important strategic priorities, such as approving the merger of the insurance operations in DNB and SpareBank 1 Gruppen and the establishment of a new insurance company. The Board further decided to reduce DNB’s ownership interest in Luminor Group AB, the company operating the banking activities in the Baltic States. Incorporating corporate responsibility in decision-making processes and strengthening the security and compliance functions were also among the Board’s top priorities. These topics are further discussed several places in this report.

No cases of significant control failure were identified in 2018, and in the Board’s view, DNB has appropriate systems, procedures and measures in place to ensure sound corporate governance and internal control.

Sections 9 and 10 of part C provide a more detailed and comprehensive overview of the Board’s work, risk management and internal control.

There are no significant changes in the Board’s follow-up of corporate governance compared with previous years.

INCORPORATING CORPORATE RESPONSIBILITY IN DECISION-MAKING PROCESSES

The Board continued working with the implementation of the strategy, elaborating and adapting its priorities to the different units of the Group, and defining the measures needed to implement these. A comprehensive training programme was one of the initiatives implemented to ensure the integration of corporate responsibility in the decision-making processes of the key customer teams in the corporate and large customer units.

STRENGTHENING THE SECURITY FUNCTION

The Board adopted an action plan for information security, and the area was strengthened as a result of a complex threat scenario in society in general, combined with new digital services and technologies.

In order to make a clearer distinction between the function that sets the overall requirements for the security work and the operational part, the functions were divided into two organisational units in 2017.

Implemented measures included reinforced protection of the IT infrastructure, improved user and access management, stronger defence against digital fraud and more comprehensive training in IT security for IT professionals. The ongoing communication efforts and the general training in information security for all Group employees were continued, and the campaign called National Security Month was carried out once again in 2018.

In 2019, DNB will to an even higher degree integrate risk management in the IT governance and strengthen the connection between IT risk and the total risk scenario in DNB’s business areas. The work of enhancing security solutions and strengthening the defence against cyberattacks and digital fraud will also be continued.

INCREASED FOCUS ON COMPLIANCE

The Board had a particular focus on the status of compliance in the Group, including compliance with the money-laundering legislation and the introduction of the EU’s General Data Protection Regulation (GDPR). A group privacy officer role was established for key DNB companies in Norway and in the EU. DNB also introduced processes to safeguard the customers’ right to information and for handling and reporting violations of the privacy protection regulations. In 2018, DNB established a Group Privacy Office, which also includes a group privacy officer. The function will be responsible for coordinating efforts to ensure compliance with privacy protection legislation both nationally and internationally. The efforts to strengthen privacy protection will still be highly prioritised in the time ahead.

The compliance function was established as a separate support unit reporting to the group chief executive in 2017, and the unit was further strengthened in 2018. The function is part of DNB’s second line of defence and reports directly to the Board of Directors. Read more about DNB’s lines of defence in Part C, sections 1 and 10.

 

 

 

Section 3-3b second paragraph of the Norwegian Accounting Act (statement on corporate governance)

The description accounts for DNB’s compliance with section 3-3b second paragraph of the Norwegian Accounting Act. The numbers refer to the second paragraph’s numerical order.

1-3. Specification of the recommendations complied with by DNB, information on where the recommendations are available and reasons for any non-conformance with the recommendations.

The DNB Group’s corporate governance structure is based on Norwegian legislation. DNB complies with the Norwegian Code of Practice for Corporate Governance dated 17 October 2018 issued by the Norwegian Corporate Governance Board, NUES. The Code of Practice is available on nues.no. Any deviations from the Code of Practice are accounted for under the description of DNB’s compliance with the Code of Practice.

4. A description of the main elements in the Group’s internal control and risk management systems linked to the financial reporting process.
See section 10 under part C The Norwegian Code of Practice for Corporate Governance.

5. Articles of Association that completely or partially extend or depart from provisions stipulated in Chapter 5 of the Public Limited Companies Act

DNB ASA’s Articles of Association do not deviate from Chapter 5 of the Public Limited Companies Act, which governs general meetings.

6. The composition of governing bodies and a description of the main elements in prevailing instructions and guidelines for the work of these bodies and any committees.

See sections 6, 7, 8 and 9 under part C The Norwegian Code of Practice for Corporate Governance.>

7. Articles of Association that regulate the appointment and replacement of members of the Board of Directors

See section 8 under part C The Norwegian Code of Practice for Corporate Governance.

8. Articles of Association and authorisations that allow the board to decide that the enterprise is to repurchase or issue the enterprise’s own shares or equity certificates

See section 3 under part C The Norwegian Code of Practice for Corporate Governance.

 

The description accounts for DNB’s compliance with the 15 sections in the Code of Practice.

 

IMPLEMENTATION OF AND REPORTING ON CORPORATE GOVERNANCE

There are no significant deviations between the Code of Practice and the way it is complied with in DNB. One deviation in section 14 has been accounted for here.

Governing bodies in the DNB Group
As at 31 December 2018

The figure illustrates the governing bodies of the DNB Group and the framework that sets out external and internal requirements as well as the principles for our business operations. The numbering refers to the relevant sections in the Code of Practice.

Governing bodies in DNB ASA

wdt_ID - No. of shares as at 31 Dec 2018 1) No. of shares as at 31 Dec 2017 2)
1 BOARD OF DIRECTORS
2 Members
3 Olaug Svarva, Oslo (chair) 7 000 0
4 Tore Olaf Rimmereid, Oslo (vice chair) 10 611 10 611
5 Karl-Christian Agerup, Oslo 6 400 6 400
6 Carl A. Løvvik, Bergen 2) 1 458 1 295
7 Vigdis Mathisen, Asker 2) 817 654
8 Jaan Ivar Semlitsch, Stabekk 12 300 12 300
9 Berit Svendsen, Oslo 0 0
10

1) Shareholdings in DNB ASA, shares held by the immediate family and companies in which the shareholder has decisive influence are also included. Cf. section 7-26 of the Act relating to annual accounts, etc.
2) Not independent.

DNB has a four-level hierarchy for governing documents.

Level 1: Governance principles
Level 2: Policies
Level 3: Standards
Level 4: Instructions and frameworks

LEVEL 1: GOVERNANCE PRINCIPLES

The governance principles represent the highest governance level in the Group. In these principles, the Board of Directors provides the main framework for all governance of operations. They can be defined by legal requirements or include areas that are of special importance to the Group, and they define the desired culture, behaviour and distribution of responsibility at group level.

DNB’s governance principles include:

Principles for open and ethical business management
The trust of our customers, owners and the market in general is essential for DNB to maintain sustainable operations over time. To earn this trust, it is important to maintain a high ethical standard in all operations, so that DNB as a financial services group is perceived as open, transparent, clear in its communication and with a high level of integrity.

The Group’s Code of Conduct describes what is expected of all elected officers, managers, employees, consultants and others who represent DNB. Non-compliance with the ethical principles may have consequences for the employment relationship. The Group’s ethical guidelines are described in the Code of Conduct (available at dnb.no/en/about-us/corporate-social-responsibility.html), which is divided into four chapters:

  1. The introduction describes the principal expectations and scope.
  2. “Our workplace” describes how DNB should be as a company. Representatives of DNB shall treat others with respect and be open, honest and unambiguous in their communication. It is emphasised that speaking up and reporting reprehensible conduct is both important and the right thing to do.
  3. “Business conduct” describes how representatives of DNB shall act in a business context. DNB’s customer service shall be characterised by a high level of integrity, accessibility and transparency, as well as compliance with laws and regulations.
  4. “Personal behaviour” describes how representatives of DNB shall act as individuals. DNB has zero tolerance for all forms of corruption and misuse of inside information. Should any conflicts of interest arise, representatives of DNB shall be open about them and solve them in an appropriate manner.

In 2018, the implementation of the Code of Conduct was high on the agenda, and a new mandatory training programme was launched for all employees and temporary personnel. At the end of the year, the completion rate for this programme was more than 80 per cent. Our goal was 95 per cent.

In addition to the new mandatory training, more than 60 awareness lectures and dilemma training sessions were conducted across the Group, under the auspices of the Group’s ethics function. Three dilemma training courses were also developed, dealing with key topics such as harassment, conflict of interest and whistleblowing. These were carried out in different management teams and other teams across the organisation. In addition, openness and psychological safety have been key topics at several Group events and workshops in the course of 2018. All these efforts help support a culture and an ethical standard that is also reflected in how DNB acts towards its customers and the market.

Ethics in process improvement and product development are two other topics that were prioritised in 2018. The principles of the Code of Conduct form the basis for all the products and services that DNB offers, and are incorporated in all business and work processes. DNB’s product development process includes performing an ethical assessment of all products and services before they are placed on the market.

We will continue our efforts to maintain a high ethical standard in DNB. Efforts to incorporate ethical principles in all business processes, products and services will also continue in 2019. The same applies to ethics training, awareness-raising and dilemma training to reach our goals in this area. RepTrak’s surveys among our stakeholders concerning how they perceive our degree of openness about our operations give us a good indication of how we are succeeding with this work. We have seen a very positive development over the last few years, both in terms of our own development and our score compared with that of our main competitors, and we will continue our efforts to use both reporting and other communication channels to be open about risks, opportunities, challenges and new priority areas.

Transparency and taxes
One area in which transparency is becoming increasingly important, is taxes. The principles that form the basis for all communication regarding DNB’s income taxes and tax reporting is openness, transparency and consistency, and this is in line with the guidelines in the Code of Conduct. In the course of 2018, DNB prepared a tax report called “DNB Tax footprint”, which describes our tax contribution and general approach to tax. This document is available at dnb.no/en/about-us/corporate-social-responsibility.html. The annual country-by-country reporting is an important tool for achieving greater tax transparency vis-à-vis the tax authorities in the countries where DNB has operations. DNB’s contribution to taxes and fees is described in more detail here, and excerpts from the country-by-country reporting is presented in the sustainability library.

Whistleblowing
The Group’s Code of Conduct states that employees without delay shall report reprehensible conduct to their immediate superior, his or her superior or the relevant specialist unit. If this is does not lead anywhere, employees can submit a notification through DNB’s whistleblowing channel. The internal whistleblowing channel was upgraded in 2018 through establishing a new online tool which includes functionality for anonymous whistleblowing. The whistleblowing framework was updated, and employees were given the opportunity to submit notifications to an external adviser. The group chief audit executive is normally the main recipient of notifications, and the whistleblowing channel is also available for temporary employees. In connection with whistleblowing cases, the person making the notification shall have access to personal support and guidance from an independent party.

In the past, about 20 notifications were received each year from employees in the DNB Group. After the establishment of the new whistleblowing channel at the beginning of September 2018, the number of notifications almost doubled, and this contributed to a total of 30 notifications in 2018.

LEVEL 2: POLICIES

The Board has adopted policies for the DNB Group to support corporate governance in eight key areas:

1. compliance
2. financial governance and reporting
3. human resources
4. communication
5. supplier management
6. operational excellence
7. risk management in DNB
8. security

The policy for communication sets the framework for the guidelines for shareholder relations
The communication shall be open, truthful and unambiguous, and reflect a high ethical standard. DNB’s target groups shall receive equal treatment through complete, timely and understandable communication. All information about the Group’s financial position and development shall be given to all stakeholders at the same time. Information practices shall continually be further developed based on what is perceived to be best practice. See also section 13.

LEVEL 3: STANDARDS

All the documents at level three are linked to one or more policies, and the responsibility for ensuring that these are based on the overarching governance documents adopted by the Board, is delegated to the group executive vice presidents. This way, the Board and the group chief executive can make sure that all important processes in the Group are covered through underlying documents and “ground rules”. This helps create consistent corporate governance. In 2018, all the Group standards were subject to a comprehensive review, and several simplification and updates were implemented. After the review, all the new Group standards were approved by the Board.

LEVEL 4: INSTRUCTIONS AND FRAMEWORKS

The lowest level in the hierarchy of governing documents comprises instructions and frameworks. The credit manual and the accounting manual are examples of documents at this level.

Implementation of the governing documents
DNB offers a comprehensive selection of online training material for use on PCs and mobiles, including courses, dilemma training sessions and quizzes, and this is an important tool to implement the governing documents across the organisation. The course completion rate is followed up by the managers.

Group managers on levels 2 and 3, the group executive vice presidents and executive vice presidents, report the results of the implementation of the governing documents in their individual units. A summary of the results is reported to the Board of Directors, and any measures are followed up.

Deviations from the Code of Practice: None

 

BUSINESS

The object of DNB is to engage in banking, insurance and financing and any related activities within the scope of Norwegian legislation in force at any time. The complete Articles of Association of DNB ASA can be found on the Group’s website, dnb.no/en/agm. The directors’ report describes the Group’s targets and strategies, and the market is kept updated through investor presentations in connection with quarterly financial reporting, capital markets days and presentations on special subjects.

The Group’s governing bodies and lines of defence are illustrated in section 1 above. The Board’s work is described in section 9.

CORPORATE RESPONSIBILITY

Working with corporate responsibility represents sustainability in practice. By connecting capital, labour and expertise, DNB contributes to increased value creation. Corporate responsibility is also about how DNB creates value, both for shareholders and for other stakeholders (employees, customers and society at large). Corporate responsibility is an integral part of corporate governance and shall be taken into account in decision-making processes.

DNB has the following approach to corporate responsibility:

  1. DNB generates long-term and sustainable financial value creation for its owners.
    This means that we emphasise corporate responsibility in all decision-making processes.
  2. DNB contributes positively to society.
    This means that we define specific goals and measures related to selected United Nations Sustainable Development Goals and work systematically to reach these goals.>
  3. DNB is honest and trustworthy.
    This means that our products and services are always tailored to customer needs. We want the best for our customers. In a world with new market entrants and major changes, we aspire to be a bank that customers trust.
  4. DNB is transparent about its operations.
    This means that we are open about the dilemmas we face when balancing short-term and long-term considerations. Through dialogue with our stakeholders, we will identify what society expects of us.

In 2018, the Board carried out a new assessment of the materiality of topics related to long-term value creation for DNB and DNB’s stakeholders. The Board’s provisions in this area form the basis for how the integration of corporate responsibility will be implemented in the organisation.

Read more about DNB’s role in society here.

Deviations from the Code of Practice: None

 

EQUITY AND DIVIDENDS

The Board of Directors continually reviews the capital situation in light of the company’s targets, strategies and intended risk profile. See the Group’s report on risk and capital management (Pillar 3) for a further description of the rules on capital adequacy, the principles applied by DNB to estimate capital requirements, as well as a further specification of the Group’s capital adequacy ratio. The report is available on the Group’s website, ir.dnb.no.

The EU capital requirements directive CRD IV introduces requirements for both equity, long-term funding and liquidity reserves. For more information on the new regulatory framework, see Director’s report.

The Board of Directors considers the Group to be well capitalised in relation to current regulatory requirements. DNB is continuing its adaptations to the new liquidity and capital requirements which have already been introduced or are expected to be introduced over the next few years.

DIVIDENDS

DNB’s primary objective is to create long-term value for shareholders, partly through a positive share price development and partly through a predictable dividend policy. The Group’s long-term dividend policy is to have a payout ratio of more than 50 per cent of profits, which will be a combination of a cash dividend and a share buy-back programme.

REPURCHASE OF SHARES

To ensure flexibility in the Group’s capital management, the Board of Directors has on previous occasions asked the annual general meeting for an authorisation to repurchase own shares. An agreement has previously been signed with the Norwegian government, represented by the Ministry of Trade, Industry and Fisheries, for the redemption of a proportional share of government holdings to ensure that the government’s percentage ownership remains unchanged. In order to ensure an optimal level of capital in the company, on 24 April 2018, the general meeting authorised the Board of Directors to acquire own shares for a total face value of up to NOK 641 746 755, corresponding to 4 per cent of the company’s share capital. The authorisation was used. For more information about the repurchases, see Director’s report.

INCREASES IN SHARE CAPITAL

At the present time, no authorisation had been granted to the Board of Directors for an increase in the share capital of DNB ASA.

Deviations from the Code of Practice: None

 

EQUAL TREATMENT OF SHAREHOLDERS AND TRANSACTIONS WITH CLOSE ASSOCIATES

DNB ASA has one class of shares. In the Articles of Association and in the work carried out by the Board of Directors and group management, the strong protection of minority shareholders is emphasised in the form of equal treatment, requirements for majority votes and the obligation to disclose transactions with close associates. All shares carry equal voting rights. In connection with increases in share capital, existing shareholders will be given pre-emptive rights, unless such rights are derogated from due to special circumstances. In such case, the reasons for such a derogation will be specified. In cases when the Board of Directors asks the Annual General Meeting for an authorisation to repurchase own shares, shares will be purchased through the stock market at market price.

LARGEST SHAREHOLDER

The Norwegian government, represented by the Ministry of Trade, Industry and Fisheries, is DNB ASA’s largest shareholder, owning 34 per cent of the shares. According to the State Ownership Report (Report to the Storting (White Paper) no. 27 2013-2014 Diverse and value-generating ownership), the purpose of the government’s ownership in DNB ASA is to retain a large and highly competent financial services group headquartered in Norway. The company is to be run on commercial terms, with an aim to generate a competitive return. The government points out that a holding that gives negative control contributes to this end. The government will thus maintain its holding in DNB ASA and has come to the conclusion that the holding will not be reduced below 34 per cent.

The shares held by the Ministry are managed by the Department of Ownership, subject to special management guidelines which among other things stipulate that the Norwegian government cannot have representatives on the boards of directors of financial institutions, but that the government, through participation in election committees, must ensure that the governing bodies include representatives from all shareholder groups. The guidelines require that the Ministry act in a manner conducive to equal treatment of DNB’s shareholders.

TRANSACTIONS WITH CLOSE ASSOCIATES

Conflicts of interest and the impartiality of board members are described in more detail under section 9 below. With respect to the Group’s other employees and elected officers, the Group’s code of ethics lays down detailed rules regulating transactions with close associates. As a general rule, an employee or elected officer will be considered disqualified if circumstances exist that may lead others to believe that he or she promotes interests other than those of the DNB Group. Employees must be aware of potential conflicts of interest if they combine positions of trust with other roles in the Group.

Where a transaction is not immaterial for either the DNB Group or the close associate involved, unless it is a matter for consideration by the general meeting according to stipulations in the Public Limited Companies Act, the Board of Directors will ensure that a valuation is made by an independent third party. This also applies to any transactions between companies in the DNB Group where minority shareholders are involved. Not immaterial transactions with close associates are described in a separate note to the annual accounts.

Deviations from the Code of Practice: None

 

SHARES AND NEGOTIABILITY

The shares in DNB ASA are listed on Oslo Børs (Oslo Stock Exchange) and are freely negotiable. The Articles of Association include no form of restriction on negotiability.

Deviations from the Code of Practice: None

 

GENERAL MEETING

The general meeting exercises the highest authority in DNB and represents the company’s shareholders. According to the Articles of Association, the annual general meeting shall be held before the end of April each year. The notice and the registration form will be sent to shareholders and be published on the Group’s website no later than 21 days prior to the date of the general meeting. The procedure for voting and for proposing resolutions is described in the notice of the general meeting.

The general meeting elects shareholder representatives on the Board of Directors and members of the Election Committee. The general meeting also selects the statutory auditor.

The minutes from the general meetings are available on dnb.no/en/agm.

Deviations from the Code of Practice: None

 

ELECTION COMMITTEE

In accordance with DNB ASA’s Articles of Association, the general meeting has established an Election Committee consisting of four members. The Election Committee submits justified recommendations to the general meeting for the election of members to the Board of Directors and the Election Committee. The general meeting has laid down instructions for how the Election Committee should carry out its duties. The members of the Election Committee shall be shareholders or representatives for shareholders and shall, as far as possible, represent all shareholders. No member of the Board of Directors or representative of the group management is a member of the Election Committee.

According to the instructions for the Election Committee, there should be rotation among the committee members. The Election Committee held 11 meetings in the course of 2018. The Committee proposed candidates for election to the Board of Directors and the Election Committee. The Election Committee also prepared matters for consideration in 2019.

Information about the Election Committee and closing dates for proposing candidates can be found on dnb.no/en/agm.

Deviations from the Code of Practice: None

 

BOARD OF DIRECTORS, COMPOSITION AND INDEPENDENCE

The governance and management of the company will be undertaken by the Board of Directors and the general meeting.

The Board of Directors of DNB ASA (“the Board”) has up to seven members, up to five of whom are elected by the shareholders and two are representatives for the employees. No member of the group management team is a member of the Board. When electing members to the Board, the need for both continuity and independence should be met, while ensuring a balanced board composition.

To strengthen the board members’ representation and competencies across the boards, joint board meetings are held for the Boards of Directors of DNB ASA and DNB Bank ASA.

No one may be a member or chair of the Board of Directors for a consecutive period of more than 12 years. A new 12-year period will start if an ordinary board member is elected chair of the board or vice versa. No one may hold a position as an ordinary board member and/or chair of the board for a total period exceeding 20 years. Members are elected for terms of up to two years. As at 31 December 2018, the Board had seven members, of whom five were elected by the shareholders and two were representatives for the employees. Three of the members were women, of whom two were elected by the shareholders and one represented the employees.

The curricula vitae of the individual board members and board meeting attendance in 2018 are found in the presentation of the board members of DNB ASA here and DNB Bank ASA here. The Board will consider the independence of its members, and their conclusion is presented in the listing of governing bodies. When new board members are nominated, their suitability is assessed, including their independence. The assessment is followed up on an annual basis by requesting a written confirmation from the board members. The Group has initiated processes to continually monitor which other assignments are held by the board members. See also the description under section 9, Transactions with close associates. The presentation of the Board lists any assignments for the Group and any significant appointments or assignments in other companies and organisations held by the members of the Board.

Board members are encouraged to hold shares in the company. The presentation of governing bodies specifies the number of DNB shares held by members of governing bodies and their close associates as at 31 December 2018.

Deviations from the Code of Practice: None

 

THE WORK OF THE BOARD OF DIRECTORS

The Board of Directors has approved instructions governing its work and administrative procedures, including matters to be considered by the Board, the group chief executive’s tasks and obligations towards the Board and rules on convening and conducting meetings. Instructions for the Board of Directors are available at dnb.no/en/about-us/about-dnb/board-of-directors.html. The Board of Directors draws up an annual plan for its activities, covering duties stipulated in laws, regulations, resolutions passed by the authorities, the Articles of Association and decisions made by the general meeting. The Board of Directors also issues instructions for the group chief executive.

The Board evaluates its own work and work methods annually, and the evaluation forms the basis for adjustments and measures. In addition, the Board’s competencies, overall and those of each board member, are evaluated.

In 2018, the Board identified measures to enhance the competencies of its members. Among the measures were a one-day seminar to discuss strategic topics and regular lectures from external speakers.

THE DUTIES OF THE BOARD OF DIRECTORS

Part A of this chapter explains the most important matters the Board worked with in 2018. See the overview of matters considered by the Board of Directors below.

In the strategy processes, the Board of Directors considers whether goals and guidelines are unambiguous, adequate, well-operationalised and easily comprehensible for all employees. All key guidelines are available to the employees through DNB’s intranet or by other means.

CONFLICTS OF INTEREST AND PARTIALITY

The Board of Directors has the ultimate responsibility for the management of DNB. Through the group chief executive, the Board shall ensure a sound organisation of business activities.

The Board determines principal goals, strategic choices and financial plans for the Group. The Board is continually updated on DNB’s financial position and development by approving quarterly and annual reports and through a monthly review of the Group’s financial position and development. Furthermore, the Board shall ensure that operations are subject to adequate control and that the Group’s capital position is satisfactory relative to the risk and scale of operations. The Board of Directors’ responsibilities and implementation and monitoring of risk management and internal control are described in section 10 below. The Board also presents a statement to the general meeting proposing guidelines for remunerations to senior executives. See section 12 below.

Instructions for the Board of Directors of DNB ASA state that a board member cannot participate in deliberations or decisions on issues where he or she personally or his or her close associates would be seen as having a direct or indirect personal or financial interest in the matter. The same principle is embodied in the Group’s code of ethics. It is the duty of each board member to ensure that he or she is without prejudice in deliberations of specific matters. The Board of Directors must approve agreements between the company and a board member or the group chief executive. The Board must also approve agreements between the company and third parties where a board member or the group chief executive can be perceived to have a significant interest in the matter.

Board members must inform the Board of Directors if they have a direct, significant interest in an agreement entered into by the company or another company in the DNB Group. The same applies if such agreement is signed by a company outside the DNB Group in which the board member has an ownership interest, serves on the board or has a senior management position. A notification should be sent to the board chairman, with a copy to the Group Secretariat.

Board members, or companies with which they are associated, should not take on special assignments for companies in the DNB Group other than their board membership. If this occurs, however, the entire Board of Directors must be informed. Remuneration for such assignments is subject to approval by the Board of Directors.

The Board of Directors held a total of 11 board meetings in 2018. The number of meetings attended by the various board members is shown in the presentation of the board members.

AUDIT COMMITTEE AND RISK MANAGEMENT COMMITTEE

In 2018, the Audit Committee and the Risk Management Committee consisted of three of the independent board members in addition to one observer.

The committees are working committees for the Board of Directors, preparing matters and acting in an advisory capacity. Members are elected for a term of up to two years among the external members of the Board of Directors, and the chairman is appointed for a term of one year at a time. The committees are working committees for the Board of Directors, preparing matters and acting in an advisory capacity. Members are elected for a term of up to two years among the external members of the Board of Directors, and the chairman is appointed for a term of one year at a time. The committee members must have the overall competence required to fulfil their duties based on the organisation and operations of the Group. At least one of the members of the Audit Committee must have accounting and/or auditing expertise. In the Risk Management Committee, at least one member must have experience from identifying, assessing and managing risk exposures in large, complex companies. The members of the committees are included in the presentation of the Group’s governing bodies. The objectives, responsibilities and functions of the committees are in compliance with international rules and standards and are described in group standard procedures. The committees normally have eight meetings each year. See the Pillar 3 report for a further description of the committees’ duties under Financial reports and presentations on ir.dnb.no.

 

The work of the Board of Directors

2018

COMPENSATION COMMITTEE

The Board of Directors of DNB ASA has a Compensation Committee consisting of three members of the company’s Board of Directors. The committee normally meets six to seven times a year. One of the members is a board member elected by the employees.

  • The committee puts forth a recommendation for the Board of Directors’ guidelines for remuneration to senior executives in accordance with section 6-16a of the Public Limited Companies Act.
  • The committee draws up proposals and issues recommendations to the Board of Directors regarding the remuneration awarded to the group chief executive and acts in an advisory capacity to the group chief executive with respect to the remuneration and other important personnel-related matters concerning members of the group management team and any others reporting to the group chief executive.
  • The committee considers measures to achieve diversity among senior executives and ensure equal pay for women and men.
Deviations from the Code of Practice: None

 

RISK MANAGEMENT AND INTERNAL CONTROL

Sound corporate governance is a prerequisite for creating long-term value for DNB’s shareholders, and for ensuring sustainable business over time.

DNB’s main risk management goal is to ensure a good balance between risk and long-term returns. DNB distinguishes between risk which is taken actively, where returns should be maximised (credit risk), and risk that generates no return and should be kept at an acceptably low level (operational risk).

DNB seeks to avoid being associated with activities that may harm the Group’s reputation.

Corporate governance provides a framework for business operations, and will help DNB implement the Group’s strategy and reach its business targets.

Corporate governance enables interaction between processes and structures used for governance and control in the Group. These set requirements for the conduct of the Board of Directors, management and employees. Everyone in DNB must all act in line with these requirements.

IT TOOLS TO SUPPORT THE OPERATIONALISATION OF AND COMPLIANCE WITH EXTERNAL REQUIREMENTS AND INTERNAL GUIDELINES

The Group continued its efforts to implement a GRC system (Governance, Risk, Compliance) in 2018. This tool is meant to support the implementation of operational risk management, compliance and internal control over financial reporting. The Group implemented a new incident database in 2017, and in 2018 the tool was introduced for reporting violations of the personal data protection legislation. The work of implementing modules for operational risk management and internal control started in 2018 and will also be highly prioritised in 2019. The project for the implementation of the GRC tool is managed by Group Risk Management in cooperation with Group Finance and relevant business areas and support units.

RISK APPETITE FRAMEWORKS

The risk appetite framework forms part of the strategic management of the Group and consists of limits and assessment principles for the types of risks that are of importance to DNB. The risk appetite framework defines the acceptable risk level against which the group’s strategy and financial targets are to be assessed. It is thus an important tool to help ensure consistent risk management and the operationalisation thereof.

The Group’s risk appetite framework contains a set of explicit statements for risk types and dimensions that are considered to be of particular importance to DNB. Each statement specifies evaluation principles that define acceptable risk levels.

Risk types and dimensions that are covered by the framework:

  • profitability and earnings
  • capital adequacy
  • credit risk
  • market risk
  • liquidity risk
  • operational risk
  • reputational risk

The framework should serve as a point of reference for evaluating the organisation’s strategic and financial plans.

Each statement and the related limits have a designated owner who is responsible for establishing follow-up routines, and for monitoring changes in the utilisation of limits.

The current risk appetite status is reported along with periodic financial reporting to the group management and the Board of Directors.

All risk appetite statements are to be implemented throughout the organisation, through more specific risk tolerance levels for each risk type. This process is owned by the person responsible for each statement, and may include both qualitative and quantitative elements. Operationalisation through the governance system is important to ensure that the risk appetite framework functions as an effective governance tool.

RECOVERY PLAN

DNB has a hierarchy of contingency measures reflected in a recovery plan. The recovery plan is meant to ensure that the Group can resume operations after a serious emergency situation without involving or getting support from the authorities. The recovery plan is prepared as an integrated part of the Group’s risk and capital management framework and will be activated if predefined recovery indicators are breached. Recovery indicator breaches will trigger a thorough evaluation of the situation and an assessment of relevant actions. If the bank’s recovery is not feasible, it will be subject to liquidation. The authorities will then be responsible for developing a plan for this phase.

Because the risk appetite framework functions as an early warning system, there are a number of overlaps between the indicators in the risk appetite framework and the recovery plan.

INTERNAL CONTROL FRAMEWORK

DNB’s internal control consists of three main components: governance, risk management & compliance and business & operations. This model is based on the European Banking Authorities Guidelines on Internal Governance and the framework from the Committee of Sponsoring Organizations of the Treadway Commission, COSO.

 

 

The purpose of DNB’s system for internal control is to ensure:

  1. efficient operations
  2. responsible business operations
  3. sufficient identification and measurement of risk, and risk-mitigating measures
  4. reliable financial and non-financial information reported both internally and externally
  5. responsible administrative and accounting procedures
  6. compliance with laws, regulations, supervisory requirements and the institution’s internal guidelines, processes, rules and decisions

COSO is a global framework that outlines the recommended components of internal control, including a defined control environment, risk assessment, control activities, information and communication, as well as monitoring activities.

The responsibility for risk management and internal control is divided between three lines of defence:

  • The first line of defence includes all of the Group’s operative functions. It is the operative managers’ responsibility to establish, manage and follow up internal control within their own area of responsibility, including processes and activities to reach defined goals relating to operational efficiency, reliable financial reporting, risk management and compliance with laws and regulations. The employees are responsible for carrying out the established internal control through their daily work tasks. The Board of Directors considered the organisation of data governance in 2018, and the area was significantly strengthened.
  •  

  • The second line of defence consists of independent control functions which monitor and follow up the internal control carried out by the management and employees in the Group’s operative functions. In DNB, second line of defence functions are organised mainly under Group Risk Management and Group Compliance.
  •  

  • The third line of defence is Group Audit, which uses a risk-based approach to review and evaluate the Group’s governance and internal control processes. Group Audit is independent of the Group’s executive management and reports to the Board of Directors of DNB ASA.
  •  

The Group’s report on capital requirements and risk management, the Pillar 3 report, includes a description of risk management and internal control in DNB, capital management and calculation, as well as an assessment and follow-up of various risk categories. Furthermore, the report gives an account of DNB’s adaptations to and fulfilment of the capital requirements legislation. The report is available on the Group’s website ir.dnb.no.

INTERNAL AUDIT

ORGANISATION AND RESPONSIBILITIES

Independent and effective audits will help ensure satisfactory risk management and internal control, as well as reliable risk and financial reporting. Group Audit receives its mandate from the Board of Directors of DNB ASA, which also approves the department’s annual plans and budgets.

Group Audit’s responsibilities can broadly be divided in two:

  • On behalf of the Board of Directors of DNB ASA, the group chief executive and the Boards of Directors of major subsidiaries verify that adequate and effective risk management and internal control are in place
  • Assess whether risk identification, established management processes and control measures effectively contribute to strengthening the Group’s ability to reach its targets
IMPLEMENTATION AND MONITORING

Group Audit carries out audits of units in the DNB Group. An audit plan is prepared, which is discussed with group management, reviewed by the Audit Committee and approved by the Board of Directors. Group Audit’s risk assessments form the basis for determining which units should be given priority in the auditing process. After the audits have been completed, audit reports are prepared, which include the results of the audit, a description of any identified weaknesses or deficiencies and proposed measures, specifying responsible persons and deadlines for implementation of the measures. The audit reports are sent to the heads of the relevant audited units. An audit summary, reviewing all of the units in the DNB Group, is presented to the Boards of Directors of DNB ASA and DNB Bank ASA once every six months. The Boards of Directors also receive a monthly summary of the audit reports for all units in the Group.

Information about the statutory auditor can be found in section 15 below.

SUPERVISORY AUTHORITIES

The operations of the DNB Group are supervised by Finanstilsynet (the Financial Supervisory Authority of Norway), international supervisory authorities, the Norwegian Data Protection Authority, Norges Bank and others. Finanstilsynet reviews annual and interim reports and the Group’s Internal Capital Adequacy Assessment Process, ICAAP. Finanstilsynet reviews the Group’s recovery plan. The Board of Directors aims to have an open and constructive dialogue with all the supervisory authorities.

Finanstilsynet reviews annual and interim reports and the Group’s Internal Capital Adequacy Assessment Process, ICAAP. Finanstilsynet reviews the Group’s recovery plan.

THE BOARD OF DIRECTORS’ REPORTING OF THE KEY COMPONENTS OF INTERNAL CONTROL OVER FINANCIAL REPORTING

Financial reporting in the Group shall be in compliance with relevant laws and regulations and internal guidelines for operations. DNB aims to have low operational risk, and the group standard for internal control over financial reporting sets explicit requirements for processes and procedures to ensure high-quality reporting.

MORE ABOUT THE STANDARD FOR INTERNAL CONTROL OVER FINANCIAL REPORTING

DNB’s financial reporting shall ensure long-term value creation for shareholders.

Ongoing risk assessments are made of processes that entail a risk of errors in financial reporting. The assessments include an end-to-end process mapping that clarifies roles and responsibilities in the entire financial value chain. Key controls are established to ensure internal control of all aspects that imply a risk of serious errors. These controls are subject to special documentation requirements. Risk-mitigating measures are established for all processes that continue to involve high or medium risk after the key controls have been implemented.

The results of the internal control over financial reporting are reported to Group Financial Reporting each quarter and followed up on an ongoing basis. The group management team and the Audit Committee receive annual updates.

BOARDS OF DIRECTORS

ORGANISATION AND RESPONSIBILITIES

The Board of Directors of DNB ASA, represented by the Audit Committee, reviews the financial reporting process and ensures that the Group’s internal control, including the internal audit and risk management systems, functions effectively. In addition, the committee shall ensure that the Group has independent and effective external audit procedures. The Board of Directors has prepared guidelines to ensure reliable, relevant, timely and uniform reporting to shareholders and other capital market participants. The guidelines also cover internal needs. Together, these are called guidelines for financial reporting. The guidelines set quality assurance requirements for the financial reporting process applying to all units in the Group, including requirements to avoid any manipulation of the accounts.

IMPLEMENTATION AND MONITORING

The Audit Committee reviews quarterly financial reporting for the DNB Group. The Committee makes a thorough review of discretionary assessments and estimates in addition to any changes in accounting practice.

The Committee monitors the Group’s internal control systems and the internal audit, making sure that they function effectively, and considers changes in systems and procedures which are presented to the Board of Directors for approval.

In connection with its review, the Committee has discussions with management, Group Audit and the statutory auditor. The statutory auditor provides a report to the Committee on the main features of the audit carried out in the previous accounting year, including a special review of any material weaknesses identified in internal control relating to the financial reporting process.

The Committee considers group management’s annual self-assessment of the level of and effectiveness of the internal control over financial reporting.

At least once each quarter, the Committee has separate meetings with the statutory auditors on behalf of the Board of Directors without any representatives from management present. In addition, the Committee has meetings with the group chief audit executive at least once a year without any representatives from the management present.

The Audit Committee considers the quarterly accounts and the proposed annual accounts for DNB ASA and the DNB Group. After the quarterly accounts and proposed annual accounts for the respective companies have been reviewed by the executive management and the Audit Committee, they are considered by the Boards of Directors of DNB ASA and DNB Bank ASA. The annual accounts are approved by the general meeting.

The Audit Committee also considers the proposed statutory and consolidated accounts of DNB Bank ASA and DNB Livsforsikring AS and the statutory accounts of DNB Boligkreditt AS. The Board of Directors of DNB Livsforsikring AS considers the quarterly accounts and the proposed annual accounts. The annual accounts are approved by the respective companies’ general meetings.

GROUP CHIEF EXECUTIVE AND EXECUTIVE BODIES

ORGANISATION AND RESPONSIBILITIES

Group Finance is headed by the chief financial officer, CFO, and is organised outside the business areas. The CFO appoints the heads of the Group Financial Reporting and Financial Management divisions.

The Group Financial Reporting division prepares, processes, consolidates, quality assures and reports financial information at group level. The division will implement reporting tools and processes that are harmonised with prevailing requirements for the Group’s financial reporting.

The Group Financial Management division sets the premises and requirements for the Group’s financial management model and tax (including value-added tax). The division sets the premises for the requirements to be met by accounting systems and other relevant systems for financial reporting.

The heads of reporting units are responsible for ongoing financial monitoring and reporting. All these units have management teams and accounting units adapted to their organisation and operations. Managers must ensure that adequate and effective internal control is implemented in accordance with established requirements, and are responsible for complying with these requirements.

IMPLEMENTATION AND MONITORING

Reporting units
The heads of the business areas and staff and support units are responsible for implementing adequate and effective internal control in accordance with established requirements, as well as for ensuring compliance with these requirements. The units will assess internal control of financial reporting each quarter and report the results of their assessment to the head of the Group Financial Management division. Every year, a comprehensive evaluation is made of compliance with external and internal regulations concerning internal control over financial reporting. The results, along with planned improvement measures, are reported to the head of the Group Financial Management division.

Group Finance

Group Finance prepares financial reports for the DNB Group and ensures that such reporting is in line with prevailing legislation, accounting standards, current accounting principles and guidelines from the Board of Directors. The head of the Group Financial Reporting division prepares guidelines which explain the requirements to be fulfilled by the local units. Processes and a number of control measures have been prepared to ensure that the financial reporting is of high quality. The measures include rules concerning authorisations, the division of responsibilities, reconciliation, change management, IT controls and management reviews.

Group management team
The group chief executive and the chief financial officer will continually consider the financial results and target attainment of the business areas as well as critical aspects and events which will affect their future performance and optimal resource utilisation. A review covering, inter alia, these subjects will be made in cooperation with the individual business areas at least on a quarterly basis. If required, the risks associated with financial reporting, both in the short and the long term, are assessed at the meetings. The group chief executive, the chief financial officer, managers in the relevant unit and relevant experts participate in the meetings, which are chaired by the group chief executive. The chief financial officer reviews such matters with the support units in separate meetings.

The group management team will review monthly financial reporting and risk appetite, including trends in profit and loss and balance sheet items, the current status relative to statutory enactments, results for legal units and analyses of and comments to the financial performance of business areas and support units.

Process for internal control over financial reporting in the DNB Group

 

INTERNAL CONTROL OVER FINANCIAL REPORTING

ORGANISATION AND RESPONSIBILITIES

The Financial Management division functions as the second line of defence for internal control over financial reporting and has a direct reporting line to the Audit Committee. The unit sets requirements for the design of and monitors internal control over financial reporting in the Group.

IMPLEMENTATION AND MONITORING

On behalf of the chief financial officer, the unit for internal control over financial reporting identifies, assesses and monitors the risk of errors in the Group’s financial reporting in cooperation with the heads of the reporting units.

A process has been established for self-assessments of the level of and effectiveness of the internal control over financial reporting. The units’ quarterly assessment of internal control over financial reporting is discussed with the head of Group Financial Reporting in special meetings when and as required, and a summary is presented to the chief financial officer, group management, the Audit Committee and the Board of Directors of DNB ASA if required in connection with their review of the Group’s quarterly and annual accounts.

AUDIT

ORGANISATION AND RESPONSIBILITIES

See description of the internal audit above.

IMPLEMENTATION AND MONITORING

The annual accounts of all the companies in the DNB Group are audited by the statutory auditors, who, within the limits stipulated in international standards on auditing and quality control, ISA, cooperate with Group Audit.

As part of the audit, Group Audit assesses the established internal control over financial reporting in selected processes. Every year, the statutory auditor prepares a report which summarises the results of the financial audit. The report accounts for any weaknesses and deficiencies in the internal control over financial reporting. The report is sent to those who are responsible for financial reporting in the audited units and companies for comment before being considered by the Audit Committee and the Board of Directors of DNB ASA. The results of the audit of financial reporting are described in Group Audit’s semi-annual report to the Boards of Directors of DNB ASA and DNB Bank ASA and the Audit Committee.

Deviations from the Code of Practice: None

 

REMUNERATION OF THE BOARD OF DIRECTORS

Remuneration paid to members of the Board of Directors, which is proposed by the Election Committee and approved by the general meeting, is not performance-based or linked to options in DNB ASA. The Board of Directors must approve any remuneration from the company to members of the Board of Directors other than ordinary remuneration for their service on the Board of Directors, the Audit Committee, the Risk Management Committee and the Compensation Committee. Note 47 to the annual accounts for the DNB Group shows remunerations to senior executives and elected officers in DNB ASA.

Deviations from the Code of Practice: None

 

REMUNERATION OF SENIOR EXECUTIVES
GUIDELINES FOR EXECUTIVE PAY

DNB’s guidelines for determining remunerations to the group chief executive and other members of the group management team should, at all times, support prevailing strategy and values, while contributing to the attainment of the Group’s targets. The total remuneration to the group chief executive and other senior executives consists of basic salary (main element), benefits in kind, variable salary, pension and insurance schemes. When determining the variable remuneration of the group chief executive and other senior executives for 2018, strong emphasis was once again placed on Group measurement parameters for financial key figures, customer satisfaction and corporate reputation.

DNB’s variable remuneration scheme is in accordance with the regulations on remuneration schemes in financial institutions, investment firms and management companies for mutual funds. The Group has identified senior executives, risk takers and independent control functions, referred to as other senior executives below.

GROUP CHIEF EXECUTIVE

The total remuneration to the group chief executive is determined on the basis of a total evaluation of performance, in addition to comparisons with remuneration levels for corresponding positions in the market. The remuneration should be competitive, but not market-leading.

The variable remuneration of the group chief executive is performance-based and determined on the basis of the Group’s return on equity, Tier 1 capital ratio and cost/income ratio, in addition to developments in customer satisfaction, DNB’s reputation and internal measurement parameters related to corporate culture and innovation. The variable remuneration of the group chief executive cannot exceed 50 per cent of fixed salary. Payment of minimum 50 per cent of variable remuneration is deferred and conditional in the form of DNB shares. The remuneration paid in the form of shares is divided into three, subject to minimum holding periods (deferred and conditional), with one-third payable each year over a period of three years.

OTHER SENIOR EXECUTIVES

The total remuneration to other senior executives is determined based on the same framework as the remuneration to the group chief executive. The total remuneration should ensure that DNB attracts and retains senior executives with the desired skills and experience. The level of variable remuneration in DNB is considered to be moderate relative to prevailing levels in international financial institutions and other large Norwegian groups of companies.

Variable remuneration is awarded to individual employees within limits allocated to each unit and an overall assessment of the individual’s attainment of predetermined financial and non-financial targets.

The variable remuneration scheme is performance-based without exposing the Group to unwanted risk. This is ensured by the strong correlation between individual targets and the Group’s governance model. Payment of minimum 50 per cent of variable remuneration is deferred and conditional in the form of DNB shares. The remuneration paid in the form of shares is divided into three, subject to minimum holding periods (deferred and conditional), with one-third payable each year over a period of three years. Variable remuneration cannot exceed 50 per cent of fixed salary for senior executives.

THE BOARD OF DIRECTORS’ STATEMENT CONCERNING EXECUTIVE REMUNERATIONS
The Board of Directors presents a statement to the general meeting proposing guidelines for remunerations to senior executives. The statement and information about remunerations paid to the individual members of the group management team can be found in note 47 to the annual accounts for the DNB Group.

 

OTHER ASPECTS

No employees in the DNB Group have any outstanding subscription rights etc. See also the description of the Board of Directors’ Compensation Committee in section 9 above.

Deviations from the Code of Practice: None

 

INFORMATION AND COMMUNICATION

The Group presents the Norwegian and international markets with extensive analytical information in connection with the quarterly reporting of financial information and presentations on particular topics. Parallel to this, the same information is made available to all interested parties on the websites of Oslo Børs (Oslo Stock Exchange) and the Group.

Guidelines have been drawn up for the reporting of financial information to shareholders, investors and analysts. The guidelines also cover the Group’s contact with shareholders other than through general meetings. The guidelines are based on openness and take into account the requirement for equal treatment of all participants in the market. They can be found on the Group’s website ir.dnb.no/about-dnb.

An overview of the dates for major events such as the annual general meeting, the publication of interim reports, public presentations and dividend payments is published on the Group’s website.

All DNB employees have access to the guidelines for financial reporting, including requirements for the internal control over financial reporting. Group Finance holds regular meetings with units in the Group to give information about and increase the understanding of the requirements for internal control over financial reporting.

Deviations from the Code of Practice: None

 

CORPORATE TAKE-OVERS

The Board of Directors of DNB ASA will handle any take-over bids in compliance with the principle of equal treatment of shareholders. Parallel to this, the Board will help ensure that shareholders are given as complete information as possible in all situations that will affect shareholder interests. Cf. section 4, which gives an account of the Norwegian government’s intention to retain its 34 per cent holding in DNB ASA, as required by the Norwegian parliament.

Deviations from the Code of Practice: The Board of Directors has chosen not to determine explicit guiding principles on how to act in the event of a take-over bid. The background for this exception is that the Norwegian government owns 34 per cent of the shares in DNB ASA, thus such principles are not very relevant. The Board of Directors otherwise endorses the wording in this section of the Code.

 

STATUTORY AUDITOR

DNB’s statutory auditor is EY. The statutory auditor annually submits a plan for the audit to the Audit Committee. Guidelines have been drawn up for the use of statutory auditors, including restrictions on what additional services can be undertaken, approval of fees and guidelines to invite tenders for external audit services. The audit partner responsible for carrying out the audit can hold this responsibility for maximum seven years, and tenders will normally be invited every seventh year.

The Audit Committee submits a recommendation regarding the choice of statutory auditor to the Board of Directors, which submits a recommendation to the general meeting. At least once each quarter, the Committee has separate meetings with the statutory auditors on behalf of the Board of Directors without any representatives from management present.

The Committee submits a recommendation regarding the statutory auditor’s remuneration to the Board of Directors, which presents the remuneration proposal to the Annual General Meeting for approval.

The statutory auditor must provide a report to the Audit Committee on the main features of the audit carried out in the previous accounting year, including particular mention of any material weaknesses identified in internal control relating to the financial reporting process. The auditor must also provide the committee with:

  • an annual written confirmation of the auditor’s independence
  • information on services other than statutory audit provided to the company during the course of the financial year
  • information on any threats to the auditor’s independence, and documentary evidence of the measures implemented to combat such threats

The Audit Committee evaluates the work performed by the statutory auditor on an annual basis.

Deviations from the Code of Practice: None

 

Board of Directors of DNB ASA

As at 6 March 2019

The Board of Directors of DNB ASA is the Group’s supreme governing body. Through the group chief executive, the Board shall ensure a sound organisation of business activities. The Board has three sub-committees: the Risk Management Committee, the Audit Committee and the Compensation Committee.

Olaug Svarva

Born 1957

Role in the Board: Chair of the board in DNB since 2018. Chair of the Compensation Committee.
No. of board meetings: 8/8
No. of shares: 7 0001)

Background: MBA and B.Sc. from the University of Denver, authorised portfolio manager from the Norwegian School of Economics and graduate from Trondheim Economic University College. CEO of Folketrygdfondet (manager of the Government Pension Fund Norway) from 2006 to 2018. Former managing director of SpareBank 1 Aktiv Forvaltning and head of investment management at SpareBank 1 Livsforsikring. Has worked as a financial analyst in Carnegie and DNB.

Other key positions of trust: Board member in Investinor AS. Former board member in the Employers’ Association Spekter, Oslo Børs (Oslo Stock Exchange) and the Norwegian Institute of Directors. Has also been a member of the Election Committees in Equinor, Telenor, Veidekke, Storebrand and Yara, and has experience from the Corporate Assemblies of Equinor, Telenor and Orkla.

Tore Olaf Rimmereid

Born 1962

Role in the Board: Vice chair of the board in
DNB since 2012 (board member since 2009). Chair of the Audit Committee and member of the Risk Management Committee.
No. of board meetings: 11/11
No. of shares: 10 6111)

Background: Master’s degree in business administration, and authorised financial analyst from the Norwegian School of Economics. Deputy CEO and SVP of Hafslund E-CO AS. Former President and CEO of E-CO Energi, head of the Finance and Administration Department in the Norwegian Broadcasting Corporation, NRK, and group executive vice president, Financial Reporting and Finance, in SpareBank 1 Gruppen. Experience from Kreditkassen.

Other key positions of trust: Chair of the board in Hafslund AS and Hafslund Nett AS. Former chair of the board in Oslo Lysverker, Energy Norway, Opplandskraft DA, Oppland Energi AS and Vinstra Kraftselskap. Former political adviser for the Conservative Party’s parliamentary group.

Karl-Christian Agerup

Born 1962

Role in the Board: Board member in DNB since April 2017. Member of the Compensation Committee.
No. of board meetings: 11/11
No. of shares: 6 4001)

Background: Graduate of the Copenhagen Business School, and Master of Science in Management from the Massachusetts Institute of Technology. Managing director of Oslotech AS. Former founder and partner of Northzone Ventures, founder and managing director of Hugin ASA, and background as a project manager in McKinsey & Company.

Other key positions of trust: Chair of the board in StartupLab AS and Oslo ShareLab AS. Board member in the Norwegian Board of Technology. Former board member in several companies, including Schibsted, Aftenposten, Norfund, Zalaris ASA, Admincontrol AS and Nevion Europe AS. Personal deputy for the chair of the board of the Tinius Foundation.

Carl A. Løvvik

Born 1952

Role in the Board: Board employee representative in DNB since 2011.
No. of board meetings: 11/11
No. of shares: 1 4581)

Background: Chief employee representative in DNB. Employed as an insurance agent in 1988 and has worked within marketing in DNB Livsforsikring and as a manager at DNB Livsforsikring’s Customer Service Centre.

Vigdis Mathisen

Born 1958

Role in the Board: Board employee representative in DNB since 2012. Member of the Compensation Committee.
No. of board meetings: 10/11
No. of shares: 8171)

Background: Business graduate from and several courses in management at BI Norwegian Business School. Employed in DNB since 1983 and elected chief employee representative for the Group in the Finance Sector Union DNB in 2012.

Other key positions of trust:
Five years of previous experience from the boards in Den norske Bank and DNB Holding. Board member in the Confederation of Vocational Unions (YS) and member of the Executive Committee of the Finance Sector Union of Norway.

Jaan Ivar Semlitsch

Born 1971

Role in the Board: Board member in DNB since June 2014. Chair of the Risk Management Committee and member of the Audit Committee.
No. of board meetings: 11/11
No. of shares: 12 3001)

Background: Graduate of the Norwegian School of Economics. President and CEO of Dixons Carphone International and Elkjøp Nordic AS. Former Chief Operating Officer of Statoil Retail Europe and CEO of Rema Industrier AS. Former Associate Partner at McKinsey & Company.

Other key positions of trust: Chair of the board in Elkjøp Norge AS. Former chair of the board in Statoil Norge AS and Lefdal Elektromarked AS. Former and current chair of the board or board member in several Norwegian companies.

Berit Svendsen

Born 1963

Role in the Board: Board member in DNB since 2012 (former board member in DNB Bank 2010–2012). Member of the Audit Committee and the Risk Management Committee.
No. of board meetings: 11/11
No. of shares: 01)

Background: Graduate engineer with a Master of Technology Management degree from the Norwegian University of Science and Technology (NTNU). Head of Vipps International. Former executive vice president in Telenor and Telenor Scandinavia, CEO of Telenor Norway, chief technology officer in Telenor, head of Telenor’s fixed network business in Norway, and CEO of Conax.

Other key positions of trust: Former board chairman in Data Respons and board member in SAS, EMGS and Ekornes, as well as a member of the European Commission Advisory Group on ICT matters.

1) Shareholdings in DNB as at 31 December 2018. Shares held by the immediate family and companies in which the shareholder has decisive influence are also included.

 

Board of Directors of DNB Bank ASA

As at 6 March 2019

DNB Bank ASA is by far the largest company in the DNB group, and quite frequently, the same cases are processed by both the Board of Directors of DNB Bank ASA and the Board of Directors of DNB ASA. For this reason, joint meetings are held for the two Boards. Joint board meetings facilitate an effective organisation and implementation of the Boards’ work. Finanstilsynet (the Financial Supervisory Authority of Norway) has approved that Olaug Svarva is the chair of the board in both DNB ASA and DNB Bank ASA, and that Rune Bjerke is the managing director of both companies. Some cases are processed by only one of the Boards. For instance, the Board of DNB Bank ASA processes credit proposals in separate meetings.

Olaug Svarva

Born 1957

Role in the Board: Chair of the board of DNB Bank since 2018.

Background: MBA and B.Sc. from the University of Denver, authorised portfolio manager from the Norwegian School of Economics and graduate from Trondheim Economic University College. CEO of Folketrygdfondet (manager of the Government Pension Fund Norway) from 2006 to 2018. Former managing director of SpareBank 1 Aktiv Forvaltning and head of investment management at SpareBank 1 Livsforsikring. Has worked as a financial analyst in Carnegie and DNB.

Other key positions of trust: Board member in Investinor AS. Former board member in the Employers’ Association Spekter, Oslo Børs (Oslo Stock Exchange) and the Norwegian Institute of Directors. Has also been a member of the Election Committees in Equinor, Telenor, Veidekke, Storebrand and Yara, and has experience from the Corporate Assemblies of Equinor, Telenor and Orkla.

No. of board meetings: 8/8

Gro Bakstad

Born 1966

Role in the Board: Vice chair of the board in DNB Bank since 2017 and observer in the Audit Committee and Risk Management Committee of DNB ASA.

Background: Business graduate and state-authorised public accountant from the Norwegian School of Economics with broad experience within economics, finance and strategy work. Executive Vice President for the Mail Division at Posten Norge AS since 2012. Former Chief Financial Officer of Posten Norge AS, financial adviser at Procorp and Chief Financial Officer of Ocean Rig.

Other key positions of trust: Board member in Veidekke ASA. Former board member in Farstad Shipping ASA and the Employers’ Association Spekter.

No. of board meetings: 11/11

Lillian Hattrem

Born 1972

Role in the Board: Board employee representative in DNB Bank since 2016.

Background: Various courses in economics, accounting and project management from BI Norwegian Business School. Employed in DNB in 1999, became board member in the Finance Sector Union DNB in 2007 and is currently vice chair of the Finance Sector Union DNB.

Other key positions of trust: Former employee representative in the supervisory board in DNB ASA and in the special Election Committee for the Board of DNB Bank ASA.

No. of board meetings: 11/11

Kim Wahl

Born 1960

Role in the Board: Board member in DNB Bank since June 2011.

Background: MBA from Harvard University. Chair of the board and owner of the private investment company Strømstangen AS. Co-founder of the European Private Equity firm IK Investment Partners, where he was partner and vice chair for 20 years. Also has experience from the US investment bank Goldman Sachs in London and New York.

Other key positions of trust: Chair of the board and co-founder of the Voxtra Foundation, established in 2008 focusing on foreign aid and local investments in East Africa. Board member in UPM Kymmene Corporation and former board member in Intermediate Capital Group plc and the Kavli Trust. Has previously held a number of board positions in various industries.

No. of board meetings: 11/11

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