Nammo AS is a limited liability company established under Norwegian law, with a governance structure
based on Norwegian Limited Liability Companies Act (Aksjeloven) and similar laws in the other countries
where we operate: Finland, Sweden, Germany, Switzerland, Spain, Poland, USA, Canada, India and
Australia. Our governance system has been developed through cooperation between the board of directors and the Nammo Group management in order to ensure compliance with the relevant laws and regulations. Our governance system is also important to ensure efficient controls for the business processes. Corporate governance is regarded as a key element in the shortterm sustainability of business operations, as well as preparation for a long-term development of the company. Corporate governance encompasses the leadership culture, vision and values, ethical code of conduct, risk management, reporting and control mechanisms.
Over the last couple of years we have implemented an updated corporate governance framework, Nammo Management System (NMS). The Nammo Management System describes how the Nammo Group is managed and our continuous process for identifying and handling risks in our business. Through this project we have formalized a yearly process for risk management and re-enforced the hierarchy and structure of the steering documents such as directives, procedures and instructions. The risk assessment process and the evaluation of the steering documents is a continuous process throughout the year and the status will be reported to the board of directors on a regular basis, minimum once per year.
The framework for leadership, organization and culture is the foundation of the Nammo management system. The system is based on the delegation of responsibility to our legal subsidiaries and business units, as well as corporate functions, such as finance, human resources, communication, IT, HESS and business development. In order to maintain uniform standards and control, we have defined common requirements in the form of corporate directives that are mandatory for all parts of our organization. The directives address areas such as strategy and business planning, finance, risk management, organizational and employee development, HESS (Health, Environment, Safety and Security), ethics, as well as corporate social responsibility.
Controls and procedures
The Nammo management system is designed to provide reasonable assurance to Nammo’s Group management and the board of directors regarding the preparation and presentation of our financial
statements. The management of Nammo AS is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed under the supervision of the Group CEO and the Group CFO. The accounting principles applied by the group follow the Norwegian Generally Accepted Accounting Principles (N GAAP).
In the finance area, there are directives for budgeting and forecasting, financial reporting and treasury
management. As an integral part of the directives in the financial area, we have implemented an accounting manual that regulates the accounting treatments for all material accounting processes. This work has also resulted in an internal control handbook that states the minimum requirements for the internal control activities to be performed in the respective financial areas.
General Meeting of Shareholders
The shareholders of Nammo AS have the ultimate authority through the general meeting. The shareholders are Patria Oyj and the Norwegian State, represented by the Ministry of Trade, Industry and Fisheries. The annual general meeting is normally held in the second quarter each year. The shareholders’ agreement outlines the number of representatives on the board of directors for each of the owners, and guidelines for the election of the chairman of the board.
The annual general meeting approves the annual report based on the Norwegian requirements and financial statements, including the dividend proposed by the board of directors and recommended
by the group management. The general meeting also elects the external auditors and determines the Auditor’s remuneration. In addition, the general meeting deals with all other matters listed in the notice convening the meeting.
Board of Directors
The board of directors of Nammo AS shall consist of six to eight directors in accordance with the shareholders’ agreement: three from each owner, and two directors representing the employees. The employees may also nominate one additional observer, so that all the employees from Norway, Sweden and Finland are represented. The position, chairman of the board, alternates annually between the two owners. The board of directors meets regularly with a minimum of four meetings per year.
In accordance with the Norwegian Limited Liability Companies Act (Aksjeloven), the board of directors exercises the overall governance of the company, including ensuring that appropriate management and control systems are in place.
The board of directors supervises the daily management carried out by the group CEO.
President and CEO
The president and CEO constitute a formal corporate body in accordance with Norwegian Limited Liability Companies act (Aksjeloven). The CEO is responsible for the day-today management of the group. The CEO’s responsibility is outlined in the shareholders’ agreement. The CEO governs the operation through the internally established corporate directives described above, current corporate policies, management meetings and business reviews. Management meetings are held about eight times a year and are called by the CEO. The executive vice presidents and senior vice presidents on the CEO’s staff also participate. These meetings focus on monitoring the status of operations and key performance indicators. The market situation and business development issues are also addressed, as well as health, environment, safety and security indicators and human resource issues. The group CEO conducts quarterly individual business review meetings with the divisions. These meetings are a vehicle for scrutiny of the divisions’ performance relative to budgets and targets. The market situation, order intake, new opportunities and other significant items at the time are also addressed.