Dovre Group Plc is a public limited company registered in Finland, with its headquarters in Espoo, Finland. In its decision-making and governance, Dovre Group complies with the laws and regulations applicable to Finnish listed companies, the company’s Articles of Association, and the Finnish Corporate Governance Code issued by the Finnish Securities Market Association. The Code is available on the Association’s website at www.cgfinland.fi. Dovre Group’s subsidiaries comply with local legislation.
Corporate governance documents
The highest decision-making body in Dovre Group Plc is the General Meeting of shareholders. The Annual General Meeting is organized once a year on a date set by the Board of Directors and must be held within six (6) months of the end of the financial period. The Board of Directors may convene an Extraordinary General Meeting when necessary.
A shareholder has the right to put matters that fall within the competence of the General Meeting on the agenda of the Annual General Meeting, provided the shareholder makes a written request to the Board of Directors in time for the matter to be included in the notice of the meeting. Requests from the shareholders to put matters on the agenda shall be sent to Dovre Group's Board of Directors to Dovre Group Plc headquarters together with an explanation or a draft solution.
- Adoption of the income statement and balance sheet
- Use of the profit or loss shown on the balance sheet
- Discharging from liability the members of the Board of Directors and the CEO
- The number of members on the Board of Directors and their election
- Election of the auditor
- Remuneration of the Board of Directors and compensation of the auditor
- Raising or lowering the share capital
- Issue of shares or authorization given to the Board of Directors
- Amendment of the Articles of Association
Notice of a General Meeting shall be sent to the shareholders not earlier than three (3) months and not later than twenty-one (21) days before the meeting. The notice is published as a stock exchange bulletin and on Dovre Group’s website. Dovre Group may also publish a notice in Finnish daily newspaper(s). Candidates nominated for the Board of Directors are disclosed in the notice of the General Meeting, or in some other way after the publication of the notice and before the General Meeting, if the candidate has given his/her consent to the election and is supported by shareholders who account for at least 10% of the company’s shares. The company also announces the Board of Directors’ proposal for the company’s auditor.
The company aims to introduce all first-time Board candidates to the shareholders at the General Meeting that is convened for the purpose of the election of the Board.
Composition and term of office
Duties and operation principles
Meeting procedures and self-evaluation
Remuneration and other benefits of the Board of Directors
Diverse composition of the Board of Directors
Arve Jensen, CEO
Chief Executive Officer as of November 1, 2018.
Arve Jensen has over 30 years of experience in the oil and gas industry.
After joining Dovre Group in 1997, he has held several senior management positions in the company and has served on the Group Executive Team since 2012.
Arve Jensen's CV
Arve Jensen has over 30 years of experience in the oil and gas industry. He is highly experienced in developing and managing professional services businesses and has in-depth knowledge of working with customers in the large project industry. After joining Dovre Group in 1997, he has held several senior management positions in the company and has served on the Group Executive Team since 2012. Dovre Group Plc’s Board of Directors has appointed Arve Jensen as the new Chief Executive Officer of Dovre Group as of November 1, 2018.
Mari Paski acts as Dovre Group’s CFO as of January 1, 2018. She has worked for Dovre Group since 2011 as Head of Group Accounting, and holds a Master’s degree (M. Sc. (Econ)) from Aalto University in Helsinki, Finland.
Stein BerntsenPresident, Consulting
Stein Berntsen has more than 25 years of experience in strategic and operational project management for the development and execution of complex projects in different industries. After joining Dovre Group in 1997, he has held several senior management positions in the Group and has served on the Group Executive Team as President for the Group's Consulting business since July 24, 2014.
The Annual General Meeting held on March 28, 2018, decided that the Chairman of the Board be paid EUR 35,000 (2017: EUR 35,000), Vice Chairman EUR 25,000 (2017: EUR 25,000), and each other Board member EUR 22,000 (2017: EUR 22,000) for the term of office, which lasts until the next Annual General Meeting. In 2018, of the annual remuneration, 40% of the total gross compensation was used to purchase Dovre Group Plc's shares in public trading through Nasdaq Helsinki Ltd.
|Board of Directors||Annual remuneration, EUR||No. of shares purchased (40% of annual remuneration)|
|Svein Stavelin (Chairman) **)||30,833||47,613|
|Koskelo Ilari (Vice Chairman) **)||23,750||36,353|
|Olsen Ole (Chairman until Aug 2018) *)||14,583||22,197|
*) Total number of 53,272 shares were purchased to Ole Olsen in April 2018. Ole Olsen returned pro-rated amount of shares (31,075 shares) following his resignation in August 2018. 60% of excess remuneration was returned in cash.
**) Additional pro-rated shares were purchased in October 2018 due to new roles. 60% of the pro-rated remuneration was paid in cash.
Remuneration of the CEO
The Board of Directors decides on the remuneration of the CEO. The terms and conditions of employment of the CEO are approved by the Board and specified in writing.
The service terms and conditions of the current CEO, Arve Jensen, comprise of an annual salary (including holiday pay, and car and phone benefits) of NOK 1,950,000 (approx. EUR 196 thousand) and a performance-based bonus decided by the Board. The CEO will have same pension and personnel insurance as the other Company employees in Norway. The contract does not specify the CEO’s retirement age. The contract may be terminated by either party by giving six (6) months’ notice. The contract does not include any additional severance payment to the CEO in case the company decide to terminate the employment contract.
The CEO’s bonus is based on the company’s or its individual units’ performance and profitability or on the successful completion of organizational measures. These objectives are specified annually. The CEO will receive a yearly bonus of NOK 300,000–500,000 depending on budget compliance, structured in such a way that if budget for the year is met, minimum bonus payment will be NOK 300,000. In addition, the CEO is eligible for the STI/LTI program for the Group’s key personnel. The STI part of the plan is paid in cash and the objectives are defined annually. The LTI part is a fully equity settled share-based payment transaction and the objectives are defined annually.
In 2018, CEO Arve Jensen’s total compensation was NOK 2,526,659 (approx. EUR 263 thousand). The amount includes performance bonus of NOK 490,798 (approx. EUR 51 thousand). Additionally, Arve Jensen earned equal to 169,631 shares of Dovre Group Plc from the LTI 2018–2020 program. The shares will be awarded at the beginning of 2021. On December 31, 2018, Arve Jensen held a total 200,000 stock options and a total of 80,000 shares in Dovre Group Plc.
Remuneration of the Group Executive Team
The Group Executive Team’s remuneration consists of total salary (including salary in money and typical fringe benefits such as car and phone) as well as long- and short-term incentives as decided by the Board of Directors. Short-term incentives include a yearly performance-based bonus decided by the Board. Long-term incentives include option plans, for which all members of the Group Executive Team are eligible, as well as yearly performance-based share-based incentive plans. The Board decides on long term incentive plans. The Group has not taken out any additional pension insurance for the members of the Group Executive Team.
The Board approves annually the terms and criteria of the Group Executive Team’s short-term incentives (or bonuses). Any bonuses are based on the achievement of financial targets, such as operating result and net sales and other related targets, on either Group and/or business unit level. In addition, members of the Group Executive Team may have either individual or team objectives.
In 2018, the total salaries and benefits of the Group Executive Team members, not including the CEO Arve Jensen, were EUR 400,413 (2017: 992,719). The amount includes performance bonuses of EUR 74,474 (2017: 119,525).
|Fixed annual based salary including fringe benefits, EUR||Share and share based remuneration in 2017||Profit based incentives 2017, EUR|
Long-term incentive plans for key personnel (option plans)
In 2017, the company had one open option plan, option plan 2013, directed to the Group's key personnel. Each stock option entitles the holder to subscribe one share in Dovre Group Plc.
The 2013 option plan was approved by the company’s Board of Directors in their meeting on January 24, 2013 based on the authorization given by the Annual General Meeting held on March 15, 2012. The share subscription price and period per series under the 2013 option plan are as follows:
- 2013A: Subscription price EUR 0.39; subscription period March 1, 2015 – February 29, 2018.
- 2013B: Subscription price EUR 0.52; subscription period March 1, 2016 – February 28, 2019.
- 2013C: Subscription price EUR 0.44; subscription period March 1, 2017 – February 28, 2020.
At the end of 2017, the company had granted a total of 850,000 options under the 2013 option plan. The company had in reserve a total of 1,150,000 options.
Long-term incentive plans for key personnel (LTI 2018 - 2020)
As of January 1, 2018, the Group has a new share-based remuneration and incentive program, where the remuneration is based on an annually set performance condition and a service condition.
The total value of the bonus accrued from the 2018 earnings period corresponds to approximately 2.1 months’ basic salary. The bonus paid in shares will consist of 169,631 of the company’s shares. The executive is responsible for personnel income tax on award. The vesting period ends at the beginning of 2021.
According to the Articles of Association, Dovre Group has one Auditor who shall be an audit firm. The term of the auditors expires at the end of the first Annual General Meeting following their selection. The Board’s proposal for the auditor is disclosed in the notice of the General Meeting.
Exceptions to the Finnish corporate governance code
Dovre Group complies with the Finnish Corporate Governance Code 2010 issued by the Finnish Securities Market Association with the following exception:
Control systems & risk management
The Group has no separate internal audit organization. The establishment of an internal audit organization has not been deemed necessary due to the size of the company. The Group’s Executive Team assesses and ensures the sufficiency and effectiveness of the Group’s internal control, as well as supports the Board with its monitoring responsibility.
The Group’s risk management is guided by legal requirements, business requirements set by shareholders of the company, and the expectations of customers, personnel, and other important stakeholders. The goal of risk management is to acknowledge and identify systematically and comprehensibly any risks relating to the company’s operations and to make sure that all such risks are appropriately accounted for when making business decisions.
The Group's risk management procedures support the achievement of the Group's strategic goals and seeks to ensure the continuity of the Group's business operations. The Group takes risks that are a natural part of its strategy and objectives. The Group is not ready to take risks that might endanger the continuity of its operations or be uncontrollable or that may significantly harm the Group’s operations.
In accordance with the Group’s risk management procedures, the Board of Directors receives an annual report of the most significant risks facing the Group. The Board analyses the risks from the point of view of shareholder value.
The company’s risk management process includes an annual identification and analysis of risks pertaining to financial reporting. In addition, the company seeks to analyze and report all new risks immediately as soon as they have been identified. Taking into account the extent of the Group’s business operations, the most significant risks pertaining to the reliability of financial reporting relate to revenue recognition, impairment testing (including goodwill), and tax reporting.
The purpose of the Group's internal control is to support the implementation of the Group’s strategy and to ensure that the Group complies with all relevant rules and regulations. The Group’s internal control framework is based on the Dovre Group Authorization Matrix, which specifies the authority and the responsibilities of the Group's management. The Authorization Matrix is approved by the Board of Directors, which also acts as the highest supervisory body of the Group’s internal control. The implementation of internal control measures is supervised primarily by the CEO and CFO, who report to the Board.
The ultimate responsibility for accounting and financial administration lies with Dovre Group’s Board of Directors. The Board is responsible for internal control, and the CEO is responsible for the day-to-day organization and monitoring of the control system. The steering and monitoring of business operations is based on the reporting and business planning system that covers the entire Group. The CEO and CFO report monthly to the Board and the Group Executive Team on the Group’s financial situation and development.
The purpose of financial reporting is to ensure that all assets and liabilities in the financial statements belong to the company; that all rights and liabilities of the company are presented in the financial statements; that items in the financial statements have been classified, disclosed, and described correctly; that assets, liabilities, income, and expenditure are entered in the financial statements at the correct amounts; that all transactions during the reporting period are included in the accounts; that transactions entered in the accounts are factual transactions; and that assets have been secured.
The correctness and reliability of financial reporting are ensured through compliance with Group policies and guidelines. Control functions that ensure the correctness of financial reporting include controls related to accounting transactions, to the selection of and compliance with the accounting principles, to information systems, and to fraud or malpractice.
Revenue recognition is supervised by the CFO and is based on the required sale and delivery documents.
The Group’s bad debt provision is reviewed monthly. Any eventual bad debt provisions are based on the aging of trade receivables per sales company.
The Group’s goodwill is tested for impairment at the end of each financial year on the balance sheet date. Key variables used in the calculations are net sales growth and the estimated change of profit margin. In addition, indications of impairment are monitored regularly. If indications of impairment are detected, a separate testing is performed.
The performance of business operations and attainment of annual goals is assessed monthly in Group Executive Team and Board meetings. Monthly management and Board reporting includes both the actual and the estimated results compared to the budget and the actual results of previous periods. Financial reports generated for the management are used for monitoring certain key indicators associated with the development of sales, profitability, and trade receivables on a monthly basis.
In accordance with its strategy, Dovre Group may complement its organic growth with acquisitions. In making acquisitions, the Group follows due diligence and utilizes its internal competence together with external advisors in the planning phase (e.g. due diligence), takeover phase, and when integrating acquired functions into the Group's operations.
This section describes our corporate governance model including information on our governance bodies, management remuneration, insider administration, as well as financial control systems and risk management procedures.