Corporate governance

B2Holding has governance documents setting out principles for how the business should be conducted. These apply to all B2Holding Group business units. References to certain specific policies will be included where relevant.

The Board of Directors in B2Holding (“the Board”) approves the B2Holding Corporate Governance Principles that are based on the Norwegian Code of Practice for Corporate Governance (“the Code”) updated 17 October 2018, and as such designed for supporting good corporate governance.

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

• Openness and transparency in communication with our 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.
• Good control and corporate governance mechanisms to secure predictability and reduce the level of risks for owners and other stakeholders.

B2Holding’s mission is: “Making each other better”. B2Holding shares knowledge and expertise within the Group, is a reliable business partner, has the ability to find amicable solutions for individual debtors and help manage society’s debt problems. B2Holding believes in trusting each other, acting professional and with strong integrity and always aiming for excellence.

B2Holding is a group of companies that each possess extensive experience and well-established reputations in their respective local markets. By conducting the business and sharing values, we believe we will contribute to well-functioning credit markets in the countries in which we operate, as well as support our business model for debtors in finding amicable and realistic payment plans.

B2Holding believes that the highest degree of ethical and integrity standards in the approach to dealing with customers and investors combined with following regulatory frameworks, are key competitive advantages.

B2Holding is aware of the responsibility to follow up customers. The Company must take care of its own and its vendors’ reputations and ensure that the Group builds, maintain and earn the privilege of mutual trust from the stakeholders while performing its business.

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 by ensuring that the topic of good governance is an integral part of the decision-making process in 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 integrated part of the Directors’ report and considered in a Board meeting.

The following statement of policy is structured in the same way as the Code, covers each point of the Code and describes B2Holding’s compliance efforts. B2Holding is committed to promoting sustainable social development by operating in compliance with responsible business principles, systematically improving its operations in relation to the external environment, climate and energy resources and investing in non-performing loan portfolios that can generate positive effects for the local banking and non-banking industries, providing financial results for the stakeholders and social effects for the society.

No deviations from the Code.

B2Holding’s strategy is to continue to be a leading player in the European NPL industry and deliver continuing shareholder value through focus on scalable platforms in core markets, transforming the Group towards a more cost-efficient model, and leveraging our servicing capabilities by increasing assets under management

The fundamental business drivers are to create solutions and value for our stakeholders and to help manage society’s debt problems. To achieve this, B2Holding needs to be a trusted partner and continuously search for ways to improve.

The strategy and goals are evaluated annually, and a set of policies are established to support the Code of Conduct implemented in 2017. Guidelines for corporate responsibility to integrate the activities are developed further as described in the section “Corporate Responsibility”.

B2Holding keeps the market updated through investor presentations in connection with quarterly financial reporting, capital market days and business updates in compliance with the Continuing Obligations of Oslo Stock Exchange.

No deviations from the Code.

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

The Board monitors the Group’s capital structure on a quarterly basis and will immediately take adequate steps should it be apparent at any time that the Company’s equity or funding structure is less than adequate. The Company is financed through a long-term bank loan facility (RCF) and five long-term bond loans in a waterfall system with the bond loans subordinated to the RCF by structure with a harmonized covenant structure. The capital structure is continually considered in order to provide funding to meet market opportunities and operational flexibility.

The Board of Directors considers the B2Holding Group to be adequately capitalised and financed.

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 disclosed.

In deciding whether to propose a dividend and in determining the dividend amount, the Board will take into account applicable legal restrictions as set out in the Norwegian Public Limited Companies Act and B2Holding’s solidity and future capital requirements. This 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 be no assurance that a dividend will be proposed or declared in any given year. If a dividend is proposed or declared, there can be no assurance that the dividend amount or yield will be as advised above. Due to the uncertainty associated with the Covid-19 pandemic and unknown consequences of the governmental measures implemented, the Board of Directors recommends that no dividend is paid for 2019.

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

Authorisations to the Board of Directors

Any authorisations granted to the Board to increase the share capital will be restricted to defined purposes. When the general meeting is to 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 event last longer than until the next Annual General Meeting.

No deviations from the Code.

B2Holding has only one class of shares. Each share carries one vote, and all shares carry equal rights, including the right to participate and vote in general meetings. All shareholders will be treated on an equal basis unless there is just cause for treating them differently.

Share issues without pre-emption rights for existing shareholders

In the event of an increase in the share capital through the issue 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 B2Holdig in its treasury shares, will be carried out through Oslo Stock Exchange, and in any case to prevailing stock exchange prices. In the event that 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 2019.

Approval of agreements with shareholders and other close associates

In the event of transactions that are considered not to be immaterial between B2Holding and its shareholders, a shareholder’s parent company, members of the Board, executive personnel 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 no restriction on the ability to own, trade or vote for the shares. Each share carries one vote.

No deviations from the Code.

The Board of Directors shall ensure that as many of the shareholders as possible are able to exercise their voting rights in the General Meetings, and that the General Meetings are an effective forum for shareholders and the Board.

As at 31 December 2019, the total outstanding number of shares was 409,932,598, distributed among 4,492 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 General Meetings either in person or by proxy, and to vote for their holdings.

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, to distribute 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. The registration deadline is set as close as possible to the meeting date.

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

Participation without being present   

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

There will also be prepared a proxy form, 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 virus outbreak and measures implemented to prevent further spread of the virus, the Board of Directors will for the Annual General Meeting in May 2020 request shareholders to refrain from attending in person and use the possibility of casting advance votes or voting by proxy instead.

No deviations from the Code.

In accordance with the 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 also determines their remuneration.

The majority of the Nomination Committee shall be independent of the Board of Directors 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 shall not be re-elected to the Board. The CEO and other members of the Management shall not be members of the Nomination Committee.

The objectives, responsibilities and functions of the committee shall be in compliance with 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 of 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 is composed to comply with legal requirements, the Code and B2Holding’s corporate governance principles (cf. section 8 below).

The proposals from the Nomination Committee shall include reasoning for its proposal.

No deviations from the Code.

The composition of the Board of Directors should consider expertise, capacity and diversity appropriate to attend to B2Holding’s goals, main challenges and the common interests of all shareholders. Further, individuals 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 so that it can act independently of 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 major shareholder(s). For the purpose of B2Holding’s corporate governance principles, a major shareholder shall mean a shareholder that owns or controls 10 % or more of the Company’s shares or votes, and independence shall entail that there are no circumstances or relations that may be expected to be able to influence independent assessments of the person in question.

No member of B2Holding’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. Further, the annual report will identify the members of the Board that are considered to be independent. Members of the Board are encouraged to own shares in B2Holding.

No deviations from the Code.

The Board of Directors has issued an instruction for its own work and for the CEO which particularly focuses on clear internal allocation of responsibilities and duties. The objectives, responsibilities and functions of the Board and the CEO shall be revised annually and be in compliance with 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 some other member of the Board.

Audit Committee

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

The members of the Audit Committee are elected by and amongst the members of the Board for a term of up to two years. 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 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 committee shall be revised annually and follow rules and standards applicable to the Group and are described in “Instructions for the Audit Committee”.

Remuneration Committee

The Board of Directors has established a Remuneration Committee 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 remuneration paid 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 amongst 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 committee shall be revised annually and be in compliance with rules and standards applicable to the Group and are described in “Instructions for the Remuneration Committee”. The Board provides details of the appointment of board committees in the annual report.

Annual evaluations

The Board annually evaluates its performance and expertise in the previous year.

No deviations from the Code.

As a part of B2Holding’s risk management, the Board of Directors has adopted a risk profile 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
• Corporate Social Responsibility
• Risk management
• Compliance (including Group policies covering anti-corruption, 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

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 and is in process of hiring an Internal audit function which will be 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 Coronavirus disease (Covid-19) outbreak has been declared a global pandemic by the World Health Organisation (WHO). The full extent, consequences and duration of the Covid-19 pandemic are not possible to predict. However, the implemented restrictions to prevent the spread of the Covid-19 pandemic will undoubtedly have a severe negative impact on European economies. As of the publication of this report, the liquidity situation and balance sheet position of B2Holding is assessed to be satisfactory and controllable and meets the requirements under the loan agreements. The Group has temporarily reduced portfolio purchases to a minimum in order to preserve liquidity going forward.

No deviations from the Code.

The remuneration of the Board of Directors 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 be 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 General Assembly.

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 24th May 2019.

No deviations from the Code.

B2Holding’s policy for determining remunerations to the CEO and members of the Management team should, always, support the Group values and strategy. The total remuneration to the CEO and other senior executives consists of base salary, benefits, annual bonus, share options, 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 that 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 for 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 of Directors and if share instruments are involved as long-term incentive, the vote will be binding for the Company. Reference is made to a special section «Remuneration of executive personnel» on page xx, note 28 in the annual accounts 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 Stock Exchange and the financial markets in general. Relevant information is given in the form of annual reports, semi-annual reports, quarterly reports, capital market days, stock exchange releases, notices to the stock exchange 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. by the Board of Directors and 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 B2Holding ASA and related parties.

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

In addition to the Board’s dialogue with the shareholders in the general meetings, the Board makes suitable arrangements for shareholders to communicate with B2Holding at other times. Communications with the shareholders should always follow the provisions of applicable laws and regulations and in consideration of the principle of equal treatment of the shareholders.  As part of the investor relations activities, dedicated representatives for the executive management meet with investors and financial analysts through regular roadshows, investor conferences, group and individual meetings, 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 shall reply quickly and precisely with relevant information in communications with 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 of Directors 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 take 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
• the Board must be aware of the particular 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.

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

The auditor participates in meeting(s) of the Board and the Audit Committee where any of the following is 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.

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

No deviations from the Code.