Shareholders and Shareholders’ Meeting

Shareholders hold the decision-making powers in the affairs of the Company at shareholders’ meetings. Shareholders’ meetings are the supreme authority in the Company’s affairs. The meetings must be organised and run so as to enable shareholders to exercise their decision-making powers in an effective and informed manner.Here and elsewhere in the Guidelines, the reference is both to the AGM and other shareholders‘ meetings, unless specifically mentioned that reference is made only to the AGM.

Annual general meeting (AGM) and shareholders’ meetings

  1. When organising the AGM, the Board shall do so in a manner that allows shareholders to exercise their decision-making powers and express their opinions. It shall, for instance, be made possible for shareholders to participate in the AGM by electronic means, partially or fully, including the possibility to vote without being physically present.Article 80A of Act No 2/1995 on Public Limited Companies (hereafter ‘the PUBLC Act’) and Article 55A of Act No 138/1994 on Private Limited Companies (hereinafter ‘the PRILC Act’) states that, unless otherwise stated in the Company’s Articles of Association, the Board may decide that shareholders can participate electronically in shareholders’ meetings.

    When preparing the AGM, it is important to ensure the participation of shareholders and ensure they have an opportunity to present their views. In this way, shareholders can be involved in the direction and development of the Company in the short and long term.

  2. When the time and date for the AGM has been decided, preferably no later than two months before the end of the Company’s accounting year, this information shall be posted on the Company’s website, together with the deadline for shareholders to submit motions and/or proposals to be discussed at the meeting.
  3. The meeting notice and other documents relevant to the AGM shall be available to shareholders in sufficient time and in such a form as to give shareholders sufficient opportunity to form a well-founded opinion on the issues to be raised at the meeting.
  4. The meeting notice shall specify the language to be used at the meeting and the language of the documents for the meeting. If the meeting is conducted or if the documents are in a language other than Icelandic, the main points of the agenda shall also be available in an Icelandic-language summary. In addition, the notice shall specify if interpretation of the introductory talks and translations of the documents will be made available to the shareholders.
  5. The proposals of the Nomination Committee and other candidacies shall be presented in the meeting notice.See further on Nomination Committees in Section 1.5.
  6. The Board shall post the following information on the candidates to the Board on the Company’s website as early as possible, and no later than two working days before the AGM:Cf. Article 63A(4) of the PUBLC Act.

    • Age, education, chief occupation and professional experience.
    • Date of first election to the Company’s Board.
    • Other commissions of trust, e.g. membership on boards of other companies.
    • Shares in the Company, both direct ownership and through associated parties.
    • Interest links to the Company’s main clients and competitors and major shareholders in the Company.A ‘major shareholder’ is any individual or legal entity who controls at least 10% of the total share capital or weight of votes in the Company, alone or in cooperation with associated parties.
    • Any other links with the Company as described in Section 2.3 and the assessment of the Board or the
    • Nomination Committee as to whether the Board member is deemed independent.

Management attendance at shareholders' meetings

  1. The Chairman of the Board and the required majority of the DirectorsThis refers to the number needed to form a quorum of the Board. The Board is quorate when a majority of the Board attends a meeting, unless the Company’s Articles of Association provide otherwise. shall be present at shareholders’ meetings, as shall the Chief Executive Officer (CEO).
  2. The Auditor of the Company and at least one member of all of the Board’s sub-committees shall be present at the AGM.
  3. If the Company has a Nomination Committee, at least one Committee member shall be present at the AGM.
  4. A nominated party and other candidates for Board membership shall be present at the Company’s AMG unless there is a valid reason for their absence.
  5. If circumstances prevent the management from attending a shareholders’ meeting, their participation shall be ensured by other means e.g. electronically

Election of the Chair of the Meeting

  1. If the Company has a Nomination Committee, the Committee shall propose a Chairperson to chair shareholders’ meetings. The Committee’s proposal shall be stated in the notice of the meeting.
  2. If there is no Nomination Committee in the Company, the meeting shall elect a Chairperson for the meeting from among the shareholders or others, unless the Company’s Articles of Association provide otherwise.Cf. Article 90(1) of the PUBLC Act.

Share Registry

  1. The Board shall ensure that there is an effective system for updating the share registry so it contains correct information at all times. Information on shareholders’ voting rights shall be entered into the registry. The registry shall also state any associations the Company has with corporate groups.

    It is preferable for the share registry to give information on the representatives of the legal entities registered as shareholders in the Company. When assessing whether or not a given representative should be registered in the share registry, account may be taken, for instance, of how many shares the respective shareholder holds.

  2. The Company’s share registry shall be readily available to shareholders at the shareholders’ meeting, either in print or in electronic form.

Nomination Committee

The role of the Nomination Committee is to propose candidates to serve as Directors on the Board. In its work, the Committee shall promote the interests of all shareholders and ensure that the proposed candidates collectively possess sufficient knowledge and experience to exercise their duties.

The Nomination Committee has an advisory role in the selection of Directors and proposes candidates to the AGM. Directors, however, are elected by the AGM, in accordance with the relevant legislation. By establishing a Nomination Committee, clear arrangements are made for the nomination of the Board of Directors at the Company’s AGM. This, among other things, lays the foundation for informed decision-making by shareholders. In addition, it increases the likelihood that the Company’s Board will possess diversity and breadth in capabilities, experience and knowledge. This is because the Committee is expected to take these aspects into account when preparing nominations of Directors.

Appointment of committee members

  1. The shareholders’ meeting shall appoint members to the Nomination Committee or decide how they should be appointed.

    The shareholders’ meeting can, for instance, decide that the Board should appoint the members of the Nomination Committee. The manner in which the appointment is made shall be indicated in the Company’s corporate governance statement. The shareholders meeting should preferably take a position on how the Committee is appointed, its role, members’ remuneration, and its working procedures. These details may be indicated in the Company’s Articles of Association.

  2. The Nomination Committee shall consist of at least three members, the majority of whom shall be independent of the Company and its day-to-day management.The same criteria shall apply to the assessment of committee members as to the assessment of the independence of Board members.See further on the independence of Board members in Section 2.3. The Committee may consist of two members, but in this case both members shall be independent of the Company. At least one Committee member shall be independent of major shareholders.
  3. Members of the Board of Directors may be members of the Nomination Committee but may not constitute a majority of the Committee. They shall not chair the Nomination Committee. This applies equally to the Chairman of the Board as other members of the Board.

    It can be desirable for the Chairman of the Board or another member to serve on the Committee. In this way, the Committee is guaranteed a certain overview of the Board’s work.

  4. Neither the Company’s managers nor its employees shall be members of the Nomination Committee.
  5. The Nomination Committee may involve consultants in the execution of its duties. Such consultants shall be independent of the Company, its managers and non-independent members of the Board of Directors. The Committee is responsible for verifying the independence of such consultants. The same criteria applies to the assessment of the independence of consultants as to the assessment of the independence of Board members.See further on the independence of Board members in Section 2.3.
  6. The Company shall announce the names of members of the Nomination Committee on its website no later than six months before the AGM.

    This time requirement must especially be kept in mind if the AGM has delegated to the Board or another party the task of appointing the Nomination Committee.

    Role and procedures of the Nomination Committee

  7. The Nomination Committee shall propose candidates for membership of the Company’s board before its AGM.
  8. The role of the Committee shall include:
    • assessing potential Directors based on qualifications, experience and knowledge. When making its assessment, it shall take into consideration the criteria laid down in Section 2.2 (Size and composition of the Board). It shall also consider the findings of the Board’s performance assessment regarding the composition and competence of the Board’s members.See further on performance assessment in Section 2.6.
    • evaluating the independence of potential Directors, in accordance with Section 2.3;
    • addressing gender ratios on the Company’s Board; Cf. Article 63(1) of the PUBLC Act and Article 39(1) of the PRILC Act.
    • preparing and submitting proposals, based on this assessment, on the election of Board Directors during the Company’s AGM.
  9. In the execution of its duties, the Committee shall take into consideration the collective interests of all shareholders. The role and main duties of the Committee shall be specified in the Committee’s rules on working procedures and shall reflect the needs of the Company. The rules of procedures shall be posted on the Company’s website.

    In the execution of its duties, the Committee may gather relevant information from the current Board and the Board’s sub-committees.

  10. The Committee shall request proposals from shareholders in a timely manner before the Company’s AGM.

    It is appropriate for the Nomination Committee to request proposals from shareholders in good time so that is has sufficient time to assess the submitted proposals.

  11. The Company’s website shall give information on how shareholders can submit proposals for Board appointments to the Committee and how other individuals can submit their candidacy.
  12. The Committee’s proposals (and other candidacies) shall be presented in the notice of the AGM and shall be accessible to shareholders on the website of the Company as soon as possible, and no later than at least two working days before the meeting.
  13. At the Company’s AGM, the Committee shall inform the meeting of the manner in which it has arranged its work and explain its proposals. The Committee’s explanations shall also be available on the Company’s website.