shall have a vice-chairperson to chair our Board in our chairperson’s ab- sence.The full version of the rules of procedures for our Board is available on www.pgs.com. Our governance structure is organized as described below:
Our Board is responsible for the development and supervision of our business activities. Our Board has established an Audit Committee and a Remuneration and Corporate Govern- ance Committee to assist in organ- izing and carrying out its responsibili- ties.
Our Board appoints our CEO.
Our CEO is responsible for the day-to-day management of our activities.
Our CEO has organized our Execu- tive Committees and our Disclosure Committee to further assist in dis- charging our CEO’s responsibilities.
Our Board, along with our CEO, is committed to operating PGS in an effective and ethical manner in order to create value for our share- holders. Our Code of Conduct re- quires our management to maintain an awareness of the risks to PGS in carrying out our business strategies and not to put personal interests ahead of, or in conflict with, the interests of PGS.
Our CEO, under the oversight and guidance of our Board and our Audit Committee, is responsible for ensuring that our financial state- ments fairly present in all material respects our financial condition and results of operations and that we make timely disclosures needed to assess our financial and business soundness and risks.
Board Committees Our Audit Committee consists of the board members Francis Gugen (chair- person), Wenche Kjølås and Daniel J. Piette. Its function is to assist our Board in its oversight of the integrity of the financial statements of PGS, monitoring the independent auditor’s qualifications, independence and per- formance, as well as the performance of the internal audit function, and ensure that PGS is in compliance with certain legal and regulatory require- ments.
Our Remuneration and Corporate
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Governance Committee consists of the board members Harald Norvik (chairperson), Holly Van Deursen and Annette Malm Justad. Malm Justad replaced Siri Beate Hatlen as of May 7, 2008.The function of the Committee is to assist with the matters relating to the compensation, benefits and per- quisites of our CEO and other senior executives and examine and maintain our guidelines regarding good corpo- rate governance.
Risk management and internal Control The Board is responsible for ensuring that appropriate steering and control systems are in place.
The Board ensures that the CEO uses proper and effective management and control systems, including systems for risk management.The Board makes sure that the control functions are working as intended and that the nec- essary measures are taken to reduce extraordinary risk exposure. Further- more, the Board makes certain that satisfactory routines exist to ensure follow-up of principles and guidelines adopted by the Board in relation to ethical behavior, conformity to law, health, safety and working environ- ment and social responsibility.
PGS’ management conduct day-to- day follow-up of financial manage- ment and reporting.The Board’s Audit Committee assesses the integrity of our accounts and inquires into, for the Board, items related to the financial review and control and external audit of accounts.
PGS has a proper internal auditing system and the Board ensures that it is capable of producing reliable annual reports and that the external auditor’s recommendations are given proper attention.
The Board shall conduct an annual self-evaluation to determine whether it and its committees are function- ing effectively, which evaluation will then be discussed and considered by the Board in its consideration of any appropriate action or response. In addition, the Board shall conduct a periodic review of PGS’ corporate governance policies and proce- dures, including the Boards Rules of
Procedure.The Remuneration and Corporate Governance Committee shall assist the Board with its annual self-evaluation and any periodic re- view of corporate governance policies and procedures. Non-conformances are systematically followed up and corrective measures monitored.
Remuneration of the Board of direc- tors and the executive management The remuneration of the members of the Board is not linked to perform- ance, but is based on participation in meetings and is approved by the General Meeting annually.The Board Members shall not take on specific assignments for us in addition to their appointment as a member of the Board. No member of the Board holds any options in PGS. For details on compensation for each member of the Board, please see www.pgs.com.
The remuneration to our Board will be proposed by the Nomination Com- mittee according to its charter at our AGM.
The compensation structure and guidelines for executive managers are subject to annual review by the Remu- neration and Corporate Governance Committee and are approved by the Board. PGS currently has a compen- sation structure for our executive managers including base salary, cash bonus, share bonus, a retention bonus and stock option programs. For further details on our compensation structure and total compensation to our execu- tive team see www.pgs.com.
information and Communications Our Board is committed to reporting financial results and other relevant information based on openness and taking into account the requirement for equal treatment of all participants in the securities market. As a listed company, we comply with relevant regulations regarding disclosure. Announcements are released through the Hugin system and posted on www.newsweb.no. In addition, all announcements are available on the company’s website www.pgs.com. Our shareholder policy is described on www.pgs.com.
takeovers The Board has established guiding principles for how it will act in the event of a takeover bid.The Board will not seek to hinder or obstruct any takeover bids for our activities or shares, or exercise mandates or pass any resolutions that obstruct takeover bids that are put forward. In the event of a takeover bid, the Board will, in accordance with its overall responsi- bility for corporate governance, act for the benefit of our shareholders and ensure that the shareholders are given sufficient information. If an offer is made, the Board will issue a state- ment evaluating the offer and making a recommendation as to whether our shareholders should or should not accept the offer. PGS’ Articles of Asso- ciation do not contain any restrictions, limitations or defense mechanisms on acquiring our shares.
Auditor Our Audit Committee shall sup- port the Board in the administration and exercise of its responsibility for supervisory oversight of the work of the independent auditors, which shall keep our Board informed of all aspects of its work for PGS.This includes submission of an annual plan for the audit of PGS.The auditor attends all Audit Committee meetings and, at least once a year, meets inde- pendently with our Audit Committee, without management being present. Our internal procedures limit the use of services from our auditors.
The independent auditors meet with our full Board of Directors at least once a year in connection with the preparation of the annual accounts and, at least once a year, presents a review of our financial reporting and internal control procedures over financial reporting.The auditor will be asked annually to confirm in writing that the auditor satisfies the require- ments for independence.The auditor shall also provide our Audit Commit- tee with a summary of all services, in addition, to audit work that has been undertaken for us.The remuneration paid to the auditor with respect to audit services will be reported to the AGM for approval.
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