Statement

Corporate governance at BankNordik

The overall aim of BankNordik’s corporate governance policy is to ensure responsible corporate management and to safeguard the interests of the Bank’s shareholders, customers and employees. Strong cor-porate governance is about having clear and systemic decision-making processes, thus providing clarity about responsibilities, avoiding conflicts of interest and ensuring satisfactory internal control, risk management and transparency. Commitment to -BankNordik’s mission and vision requires the integration of sound corporate governance with the framework under which the Bank is governed and managed.

 

BankNordik is a Faroese public limited company listed on the Nasdaq stock exchanges in Iceland and Copen-hagen, respectively; with Iceland as the primary listing. Corporate governance at BankNordik follows generally adopted principles of corporate governance. The external framework that regulates corporate governance work includes the Nasdaq’s rules for each stock exchange, the Faroese Companies Act, the Banking and Financing Business Act, the -Annual Accounts Act, the Annual Accounts Act of Credit Institutions and Securities Companies, rules issued by the relevant financial supervisory authorities, and the rules and principles of the Code — Corporate Governance Recommendations. For further information regarding the Bank’s compliance with the Corporate Governance Recommendations

 

Management structure

The Bank’s management structure reflects the statutory requirements governing Faroese companies in general and financial institutions in particular. The shareholders elect the members of the Board of Directors and the independent auditors at the Bank's general meeting. The Board of Directors appoints the Executive Board, the internal chief auditor and determines their remuneration. According to the Faroese Financial Business Act, members of the Executive Board may not serve on the Board of Directors.

 

Recruitment and assessment of Board members

The Board of Directors currently comprises six members. According to the Articles of Association, four to six members of the Board of Directors are elected by the shareholders at the annual general meeting to hold office until the next annual general meeting. The age limit for election and re-election of board members is 70 years. Pursuant to the statutory provisions on employee representation in Faroese legislation, the employees are entitled to elect a number of representatives to serve on the Board of Directors for four-year terms. The two current employee representatives on the Board were elected by the Bank's employees in the Faroe Islands, Denmark and Greenland in May 2014, which implies that their term of office expires immediately after the annual general meeting to be held in 2018.

 

The primary duty of the Bank's Board of Directors is to determine the strategic framework for the Bank and its activities. The Bank places emphasis on ensuring that the Board of Directors possesses the necessary and relevant experience and qualifications to adequately fulfil its duties as a Board of Directors. The assessment of whether the Board of Directors possesses the necessary experience and qualifications is based on the Bank's business model the associated risks and the Board's competence profile. The Board of Directors' understanding of the fundamentals of the Bank's business model and associated risks is therefore of essential importance. Furthermore, the Bank believes it is important that the Board of Directors continually evaluates whether the Board of Directors possesses the necessary experience and qualifications to understand and appropriately address the risks and challenges which the Bank is exposed to, and handle these in an appropriate manner.

 

The Board of Directors, the Executive Board and sub-committees of the Board of Directors

According to the division of decision-making powers, the Board of Directors outlines the overall principles governing the affairs of BankNordik, whereas the Executive Board is in charge of the day-to-day management and reports to the Board of Directors. The rules of procedure for the Board of Directors and the written instructions from the Board of Directors to the Executive Board stipulate the exact division of duties and responsibilities. The rules of procedure of the Board of Directors or the written instructions from the Board of Directors to the Executive Board are not available to the public.