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Corporate Governance - a tool for driving growth and development

Corporate Governance
NGB's Corporate Governance Model applies to the company and its subsidiaries and Joint Ventures. It establishes clear roles and responsibilities for the management of the company and its Board of Directors. NGB believes the Corporate Governance Model is pivotal in driving growth and development in the portfolio companies.

NGB primarily exercises its ownership influence through the company Board of Directors. The Board defines and monitors strategic plans in the company. It ensures that the management is able to run the company in a responsible and accountable manner.

When a subsidiary or Joint Venture is established, NGB appoints a new Board with a Chairman. The Chairman is generally an industrialist with management background sourced from the NGB Industrial Network or by its Joint Venture Partners. The Chairman is supported by other Board members, who are sector specialists and professionals with relevant experience. The Board is carefully structured for each company's specific needs and is usually kept small to ensure strong commitment and swift decision-making. The Board of Directors appoints the CEO.

The NGB forum
The CEO, the Chairman of the Board of Directors and the NGB representative in the board are generally referred to as the "NGB" and form an important pillar of NGB's Corporate Governance Model. The members of the NGB work closely together and conduct regular follow-ups between Board meetings. The forum also further enables an active dialogue with, and is a sparring partner to, the CEO on a continuous and informal basis.

Evaluation and monitoring
Continuous performance evaluation is a crucial part of the NGB Corporate Governance Model. The performance of the CEO, the Chairman, the overall Board of Directors and the NGB representatives is assessed once a year in a comprehensive appraisal process. This process ensures that relevant competencies are present on the Board and that governance works in accordance with NGB's principles. This evaluation can lead to changes in the Board composition. NGB also monitors the companies' overall development compared with each original plan. This is done on the basis of briefings to the NGB Audit Committee and Financial Committee. In addition, NGB advises on the exit process and assists in financing, M&A and IPO issues.

Common mindset
An important requirement for the governance to work well is that the management, the Board of Directors, Joint Venture Partners and NGB have common goals and as owners act in the company's best interests. This is achieved by requiring that the Joint Venture Partner invest in parallel in the portfolio company, based on the same valuation; and through an incentive program prepared by NGB's Remuneration Committee so that a joint business plan is established through a common mindset a shared agenda and maximum transparency.

NGB put great value on its social responsibility and ethical behaviour. NGB's Global Code of Conduct is applicable to all employees of NGB Group and its Subsidiaries and joint venture companies. Consultants acting on behalf of NGB are also requested to adhere to the code of conduct.