Corporate Governance Policy of Siem Offshore
The principles for corporate governance adopted by the Company is based on the “Norwegian Recommendation for Corporate Governance” issued on 14 October 2011.
As a company incorporated in the Cayman Islands, Siem Offshore Inc. is subject to Cayman Island Laws and regulations with respect to corporate governance. Cayman Islands corporate law is to a great extent based on English Law. In addition, due to the Company’s listing on the Oslo Stock Exchange, certain aspects of Norwegian Securities law apply to the Company and there is a requirement to adhere to the Norwegian Code of Practice for Corporate Governance. The Company endeavors to maintain high standards of corporate governance and is committed to ensure that all shareholders of the Company are treated equally and the same information is communicated to all shareholders at the same time.
It is the opinion of the Board of Directors that the Company complies with the Norwegian Code of Practice for Corporate Governance, but would like to comment on the following:
Cayman Islands laws and regulations do not require the objects clause of the Companies Memorandum and Articles of Association to be clearly defined. The Company has however adopted clear objectives and strategies for its business.
Siem Offshore aims to grow the company within offshore support vessels, both organically and through combination with other operators, in order to achieve economies of scale and stronger presence in the market.
Siem Offshore aims to become a preferred supplier of marine services to the offshore oil & gas industries and of the offshore renewable energy industries based on quality and reliability and provide cost efficient solutions for its clients by understanding their operation and applying technology and experience.
The Company builds its business around a motivated workforce with the appropriate technical solutions and creating sustainable value to all shareholders.
Equity and Dividends
The priorities of the use of Company funds are firstly the repayment of debt, secondly the investment opportunites in the business and thirdly the return of capital to the shareholders in form of dividends or share buy-back. Loan agreements with lending banks include clauses with restrictions to distribution of dividends.
The Board’s mandate to increase the Company’s share capital is limited only to the extent of the authorised share capital of the Company but with pre-emption rights for shareholders and in accordance with the Company’s Memorandum and Articles of Association which comply with Cayman Island law.
Under the Articles of Association, the Board can issue new shares, convertible bonds or warrants at any time within the limits of the authorised capital without the consent of the general meeting but with pre-emption rights for shareholders. A General Meeting has further authorised the Board to issue new shares without pre-emption rights to all shareholders up to a limit of 50% of Siem Offshore’ shares at the time the authorisation was given. The Board holds authorisation from General Meeting 29 April 2011 to issue 61,147,948 new shares. The authority gives the Board flexibility to finance investments, acquisitions and other business combinations on short notice through the issue of shares or certain other equity instruments in the Company. Furthermore the Board considers the granting of a new standing authority at the time of holding an Annual General Meeting rather than convening an Extraordinary General Meeting at some future time to be in the best interests of the Company, as this will result in cost savings and more effective time management for both the Company’s senior management and its Shareholders.
Equal Treatment of Shareholders, Freely Tradable Shares and Transactions with Related Parties
The Company is committed to ensuring that all shareholders of the Company are treated equally and all the issued shares in Siem Offshore are freely tradable and carry the same rights with no restrictions on voting.
Siem Sustainable Energy S.a.r.l which owns 33,60% of Siem Offshore Inc. is represented by its Chairman, Kristian Siem in the Board of Siem Offshore. The Company pays an annual fee to Siem Industries as compensation for directorships, provision of an office and presence in the Cayman Islands, and other administrative services. The fee is adopted by the annual general meeting based on a recommendation from the independent Board Members. Related part transactions are disclosed in the notes to the Financial Statments.
The annual general meeting of the Company is held at the registered office of the Company in Cayman Islands or elsewhere as the Board shall advise. Please see the financial calendar for date and time. The Shareholders can be represented by proxy.
Board of Directors
The appointment of a nomination committee is not a requirement under Cayman Islands Law. In the appointment of board of directors, the Board consults with the Company’s major shareholders and ensures that the Board is constituted by directors with the adequate expertise and capacity. In addition, there is no requirement under Cayman Islands Law for the Company to establish a corporate assembly.
The Board of Directors as a group have extensive experience in areas which are important to Siem Offshore, including offshore services, international shipping, ship broking, financing and corporate governance and restructuring.
Work of the Board of Directors
The Board monitors the performance of management through regular meetings and reporting. The Company has a Compensation Committee, a Nomination Committee and an Audit Committee.
Remuneration of Board of Directors
The remuneration of the Board members reflects their experience and is adopted by the annual general meeting based on the recommendation from the Board. The Board members do not have options or profit based remuneration.
Remuneration of Leading Employees
The Company has a Compensation Committee which reviews and approves the compensation of the CEO and the bonuses to all leading employees. The Articles of Association of the Company permit the board to approve the granting of share options to employees. Currently there are two option programs in force, related to the CEO. The remuneration of the CEO and the management team is disclosed in the notes to the accounts.
Information and Communication
The Company has a policy of treating all its shareholders equally, and of immediate information on material events which could significant impact on the operations and financial status of the Company. Material information is released through notices to the Oslo Stock Exchange, Newsweb, and on the Company’s website (www.siemoffshore.com).
The shares in the Company are freely tradable and the Articles of Association of the Company does not hold specific defence mechanisms against take-over situations.
The Auditor of the Company is elected at the annual general meeting which also approves its remuneration. The auditor reports on internal controls, risk areas and improvement potential in control systems annally to the Audit Committee and Chairman. The audit process is planned in detail and the findings of the auditors are reviewed with management. A final report is disclosed to the Audit Committee.