Governance

BOARD OF DIRECTORS

Kristján Þórarinn Davíðsson

Chairman of the Board


Education:

Fisheries Resource Management M.Sc. from the University of Fisheries in Tromsø, Norway. Level I Ship Captain from the Icelandic Naval Academy. The Financial Supervisory Authority's examination for directors of financial firms and courses at Reykjavík University and Bedriftsökonomisk Institutt (BI) in Oslo, Norway, in board positions.

First Elected to the Board of Brim hf:

March 2019

Experience:

Manages his own consulting and investment company Viðskiptaþróun ehf., as well as the investment company ISDER ehf. Has over three decades of experience in the international fisheries sector, following the conclusion of his studies, including marketing and sales, finance, business operations, and management at Norfish Export Co., SIF, Marel, Íslandsbanki/Glitnir, Grandi/HB Grandi, and Iceland Seafood International.

Other Board Positions:

Has served as a board member of companies in Norway, Peru, Chile, and Iceland for many years, including Landsbankinn, Corporacion Pesquera Inca, Pesquera Friosur, and Vaka. Currently, the chairman of the board of Valka and Snerpa, board member of Olivita, Sjótækni, Hamravík, and Polar Togbúnaður, deputy member of the board of Almenni Lífeyrissjóðurinn.

Ownership Interest in Brim hf.:

ISK 0 (0.00%)

Conflict of Interest:

No conflict of interest, neither with the company's primary business partners, nor its competitors or shareholders with more than a 10% stake in the company.

Anna G. Sverrisdóttir

Board Member


Education:

Diploma studies at the Ökonomisk Faghögskole in Trondheim (now part of the Norges Teknisk Naturvitenskapelige Universitet in Trondheim-NTNU), with an emphasis on auditing and human resources, and attended the Iceland School of Commerce prior to that.

First Elected to the Board of Brim hf:

April 28, 2016

Experience:

As a self-employed consultant through AGMOS ehf., she managed specific projects for the Icelandic Tourism Association (SAF). Varied enterprise-level experiences. Has mainly worked in finance and management, for example at the following companies: Bláa Lónið, Laugarvatn Fontana, Viðskiptablaðið, Vaka-Helgafell, Íslenska útvarpsfélagið (Stöð 2), and Arnarflug, in addition to having worked at the Accounting Firm of Björn and Ari (has since merged with Deloitte), the fisheries company Hilmir sf., and Landsbankinn.

Other Board Positions:

Board seats: Bláa Lónið hf., Hreyfing ehf., AGMOS ehf. Previous board positions in the following companies and institutions: Into the Glacier ehf, Lífeyrissjóður verzlunarmanna, Framkvæmdasjóður ferðamannastaða, Útflutningsráð, Ferðamálaráð, Samtök ferðaþjónustunnar, and Arnarflug hf. Has, additionally, taken a very active role in several NGOs. Has also served on various committees for the Ministries of Industry, Foreign Affairs, Transport and the Environment.

Ownership Interest in Brim hf.:

ISK 0 (0.00%)

Conflict of Interest:

No conflict of interest, neither with the company's primary business partners, nor its competitors or shareholders with more than a 10% stake in the company.

Guðmundur Kristjánsson

Board Member


Education:

Business and Marketing from Salem State College, Salem Massachusetts, USA.
Fishing technician from Tækniskóli Íslands 1983.

First Elected to the Board of Brim hf:

May 1, 2018

Experience:

Serves as the CEO of Brim hf. Formerly the managing director of the fishing company Tjaldur ehf., and is the managing director of Kristján Guðmundsson hf. in Rif.

Other Board Positions:

Serves on the boards of Brims' sales companies in Asia and fisheries companies in Greenland, as well as other smaller companies in Iceland. Has served on the board of the National Association of Icelandic Fishermen (LÍÚ) from 1991 to 2014, also served on the boards of the Icelandic School of Navigation (Sjómannaskólinn), the Technical College (Tækniskólinn), Hjallastefnan, Icelandic Group (Sölumiðstöð hraðfrystihúsanna), the Akureyri Fisheries Company (Útgerðarfélag Akureyringa), the Trade Council of Iceland, Búnaðarbankinn, Straumur Investment Bank, the fish processing plant in Vestmannaeyjar, UR Seafood (Útgerðarfélag Reykjavíkur), the fish processing plant KG in Rif, Bakki in Bolungarvík, Básafell in Ísafjörður, the fish processing plant Kambur in Flateyri, the fish processing plant Íslandssaga in Suðureyri, and the fish drying plant Laugafiskur in Laugar.

Ownership Interest in Brim hf.:

ISK 0 (0.00%)

Conflict of Interest:

Owner of Útgerðarfélag Reykjavíkur (UR Seafood), which, along with its subsidiary, owns 859,870,977 shares in Brimi hf.

Kristrún Heimisdóttir

Board Member


Lawyer, cand.jur. from the University of Iceland. Law and philosophy studies at KU Leuven Belgium and at UCC Cork in Ireland. Doctoral studies in the United States.

First Elected to the Board of Brim hf:

July 27, 2018.

Experience:

Self-employed consultant. Research Fellow at Columbia University Law School in New York since 2015. Executive Director of the Federation of Icelandic Industries 2013-2014. Lecturer at the University of Akureyri since 2012, currently a guest lecturer there. Assistant to the Minister of Economic Affairs 2010-2012. Legal Adviser to the Minister of Welfare 2009-2010. Assistant to the Minister of Foreign Affairs 2007-2009. LEX law firm 2006-2007. Lawyer for the Federation of Icelandic Industries 2002-2006. Selection committee for the winning proposal in the competition for the construction of a music hall in Reykjavík 2005-2006. Taught at Reykjavík University and Bifröst University. Managing Director of the Reykjavík Academy. Lawyer at the Parliamentary Ombudsman. Sports reporter, etc. at RÚV. One of the authors of a report for a working group on EEA co-operation for 2019. Worked with Thorvald Stoltenberg, on Iceland’s behalf, in the committee for the Nordic Defense Cooperation in 2008. Served in the Constitution Committee 2005-2007.

Other Board Positions:

Part of the University Council of the University of Iceland. On the board of the "Leifur Eiríksson Foundation". Alternate member of the Board of the Icelandic State Financial Investments (ISFI). In the ethics committee for the Icelandic Football Association. Alternate member of the board of the Association of Depositors. Examples of previous board positions: Chairman of the Board of the Business Innovation Fund. Chairman of the Church Social Services Board. Secretary of the Board of the Sports and Olympic Association. Chairman of an Achievement Fund. On the board of Reykjavík University. Cooperation Platform for Fisheries and Industry. The Chairman of the Board of Hlaðvarpinn ehf.

Ownership Interest in Brim hf.:

ISK 0 (0.00%)

Conflict of Interest:

No conflict of interest, neither with the company's primary business partners, nor its competitors or shareholders with more than a 10% stake in the company.

Magnús Gústafsson

Board Member


Education:

Operations Engineer from Odense Teknikum, Optimization Studies.

First Elected to the Board of Brim hf:

May 1, 2018.

Experience:

CEO of Atlantika INC in the United States, 2009-2018. Iceland's Consul General in New York, 2005-2008. CEO of Icelandic Inc - Coldwater Seafood, 1984-2005. CEO of Hampiðjan hf., 1972-1984. Optimization consultant at the Icelandic Confederation of Employers (Vinnuveitendasamband Íslands), 1966-1972.

Other Board Positions:

Served on the board of Brim hf. (currently UR Seafood hf.), served on the board of Promens.

Ownership Interest in Brim hf.:

ISK 81,689 (0.005%)

Conflict of Interest:

No conflict of interest, neither with the company's primary business partners, nor its competitors or shareholders with more than a 10% stake in the company.

Directors

Guðmundur Kristjánsson

Guðmundur Kristjánsson

CEO

Inga Jóna Friðgeirsdóttir

Inga Jóna Friðgeirsdóttir

Chief Financial Officer

Ægir Páll Friðbertsson

Ægir Páll Friðbertsson

Chief Operating Officer

CORPORATE GOVERNANCE

Brims' Board of Directors and representatives are committed to good corporate governance to ensure that the work of the Board of Directors as well as the company's operations as a whole fulfill the criteria of good business practices.

The Board's Rules of Procedure and the Statement of Governance can be accessed here:

The company's corporate governance is primarily based on Act no. 2/1995 on public limited companies, the company's articles of association, rules of procedure, and Guidelines for Corporate Governance, 6th ed., published by the Iceland Chamber of Commerce, NASDAQ Iceland hf., and the Confederation of Icelandic Enterprise.

Brim hf. considers itself to be in adherance with the above guidelines on corporate governance in all general respects, with the exception that the company has not appointed a nomination committee.

GROUP

Brims' aim is to be an integrated fisheries company that combines fishing, processing, and sales and marketing operations. The figure below shows Brims' operations along with its key subsidiaries and affiliates.

Group overview.png

TRANSACTIONS OF RELATED ENTITY

Brims' operations are subject to the rules on transfer pricing, which refer to how related legal entities price transactions between the parties. These regulations are intended to ensure that the price determination in transactions between related legal entities is in accordance with prices in comparable transactions between unrelated entities. So that the pricing is in accordance with the so-called “arm's length principle”. The regulations only apply when a certain type of relationship exists between the legal entities that are in a business relationship.

A relationships is considered to exist when there is a direct and/or indirect relationship between the legal entities themselves, or when there is a relationship between majority shareholders of those legal entities, or have administrative control over the legal entities in a business relationship. The relationship between the legal entities can be defined directly or indirectly, as follows:

  • When legal entities are part of the same group, they are unequivocally related legal entities.
  • When a legal entity is under the direct and/or indirect majority ownership or administrative control of two or more legal entities within a group, it is considered to be connected to all legal entities within the group.
  • When a legal entity owns more than a 50% share in another legal entity indirectly, they are considered connected within the meaning of the provision of regulations on transfer pricing. If one legal entity is part of a group, then the other legal entity is considered to be connected to all other legal entities within the group.

Brim sold products to the following related parties in 2020

  • Icelandic Japan, 12.7 million euros of products.
  • Vignir G. Jónsson, 2.2 million euros of roe.
  • Kambur Fish Processing, 3 million euros of demersal fish for processing.
  • Iceland Pelagic, 20.6 million euros of pelagic products.
  • Laugafiskur, 0.7 million euros of fish heads.

Brim also purchased products and services from the following related parties in 2020

  • Kambur Fish Processing, 3.1 million euros of products.
  • Gjörvi, 0.7 million euros of shipping services.
  • Útgerðarfélag Reykjavíkur (UR Seafood), 1.3 million euros of quota leasing.
  • Seafood Services, 0.1 million euros.

Brims' other transactions with related parties are negligible.

Other transactions between related parties:

  • Útgerðarfélag Reykjavíkur (UR Seafood) and a subsidiary sold products to Asian companies (Icelandic Japan, Icelandic China, and Icelandic Hong Kong) for 34.9 million euros.
  • Seafood Services, which handles product quality control, sold 0.8 million euros worth of services to Icelandic Japan, and 0.3 million euros worth of services to Icelandic China.
  • Kambur Fish Processing sold 0.5 million euros worth of fish heads to Laugafiskur.
  • Icelandic Japan sold 0.9 million euros worth of products to Icelandic China.

Other transactions between related parties are negligible. .

BRIM’S POLICIES

Attached are links to Brims' policies.

Brim has established procedures for the disclosure of offences or other reprehensible conduct, and these procedures have been ratified by the company's board of directors.

Procedure for the Disclosure of Criminal Offences or Other Reprehensible Conduct

In addition, Brim has signed a CSR policy, which has been outlined by companies within the SFS Fisheries Association, and is based on the United Nations’ Sustainable Development Goals. The SFS's social policy can be found here.

PURCHASING

Brim defines Iceland as its local community. Products and services from domestic suppliers accounted for 98% of the company's total purchases in 2020. Renewal of the shipping fleet is not included. In most cases, Brim has required suppliers to keep inventory for the company's operations, and that the delivery is in accordance with the intended use at any given time. The cost and reduction of inventory is thus kept to a minimum. The company's rural location means that Brim, in accordance with the company's purchasing policy, seeks out local services at the sites in questions, and thereby supports its local community. This is very important to the company and its staff. When selecting suppliers and service providers, Brim places a strong emphasis on the following factors:

  • Competitive Pricing
  • Product Quality
  • Level of Service
  • Competitive Considerations
  • Social Responsibility

If these factors go together, as judged by the company, the most efficient price at any given time is the one that enables Brim to maximize quality and service, ensure competition, and promote social responsibility.

SOCIAL RESPONSIBILITY OF SUPPLIERS

Brim has set a policy for socially responsible purchasing practices and it has become a factor in all major purchasing agreements made by the company. It stipulates that the suppliers in question should conduct fair and responsible business practices. Suppliers commit to integrity in their business practices and guarantee that the products they sell, and the services they provide, comply with the provisions of the laws and regulations that apply to them. A supplier must respect human rights in general and commit to complying with all laws and regulations that apply to its business operations, domestically and in foreign markets. Violation of this provision may result in the immediate termination of a supplier’s agreement.

Through its new and dynamic environmental database, designed by Brim and implemented in 2020, the company has begun a systematic collection of information on the environmental impact of the products and services purchased by Brim. Such information gathering gives Brim the opportunity to build up awareness of greenhouse gas emissions from all of the company's business units and its entire value chain. In this way, the company can make informed decisions to focus on doing business only with those suppliers with the least negative environmental impact, and thereby help systematically reduce the negative environmental impact of the company's operations.

Since 2016, Brim has implemented the following environmental provisions for the company's key procurement agreements.

"Brim is a party to the climate declaration of Festa, composed by the Center for Corporate Social Responsibility and Reykjavík City, and signed by 104 companies at Höfði in 2015. With that declaration, the company has committed itself to reducing greenhouse gas emissions over the coming years. Part of that resolution is to map the impact of service providers and their operations on Brims' operations, which will be reflected in the Environmental Statement, published by the company on an annual basis. In order to support these goals, service providers must undertake, at the beginning of each year or on a regular basis, the disclosure of their environmental impact on Brim's operations that passing year.”

Today, nineteen agreements with the company's largest suppliers contain this provision.

SUPPLIER EVALUATION

Brim performs an annual assessment of the company's 100 main suppliers, large and small, which are defined on the basis of their operational security vis-à-vis Brim’s operations (i.e. those companies that could have a minor or lasting negative impact on Brim's operations). One of the questions in the assessment is whether the supplier in question has established a formal code of conduct.

The number of suppliers that could have a minor or lasting effect on the company's operations was 61 in 2020. Of these 61 suppliers, 19 suppliers (31%) had implemented a written code of conduct.

GOVERNANCE STATEMENT

Brim has been a leader in environmental issues and is now publishing the company’s fourth environmental statement.

This is the first time that the company also publishes a Social Statement, in accordance with Nasdaq's ESG Reporting Guide 2.0. The results are divided into three components: Environmental, Social, and Governance.

The attached table shows the Governance Statement according to Nasdaq’s ESG Reporting Guidelines, which apply to the operations of Brims and its subsidiaries.

2020 2019 2018 2017
S1. The Board’s Gender Ratio
Radio of women on the board % 40% 40% 40% 40%
The ratio of women chairing committees % 0% - - -
S2. Independence of the Board
Does the company forbid the CEO from chairing the board? yes/no yes yes yes yes
Ratio of independent board members % 60% 80% 80% 80%
S3. Bonuses
Do CEOs automatically receive bonuses for reaching sustainability targets? yes/no no no no no
S4. Collective Agreements
Percentage of employees covered by general labor agreements % 97% 97% 97% 97%
S5. Suppliers’ Code of Conduct
Are your sellers or suppliers obligated to follow a code of conduct? yes/no yes - - -
If so, what percentage of your suppliers have formally certified that they comply with that code of conduct? % 31% - - -
S6. Ethics and Anti-Corruption Measures
Does your company adhere to measures to ensure ethical practices and combat corruption? yes/no yes
If so, what percentage of employees have formally certified that they adhere to that policy? % - - - -
S7. Privacy Policy
Does your company follow a privacy policy? yes/no yes yes yes yes
Has the company begun to comply with the provisions of the GDPR? yes/no yes yes yes yes
S8. Sustainability Report yes yes yes yes
Does the company publish a sustainability report? yes/no yes yes yes yes
Is sustainability data included in reporting to authorities? yes/no yes yes yes yes
S9. Disclosure Practices
Does the company provide sustainability data to authorized parties in an organized manner? yes/no yes yes yes yes
Does the company emphasize specific United Nations Global Goals? yes/no yes - - -
Does the company set goals and report on the progress of United Nations Global Goals? - - - -
S10. Data Extracted/Verified by a Third Party
Is sustainability data extracted or verified by a third party? yes/no yes* - - -
*EFLA has reviewed the presentation and information on environmental components.

Nasdaq's ESG Reporting Guidelines are intended to disclose information on the above aspects of corporate operations to investors and other stakeholders, in a clear and accessible manner.

SHAREHOLDERS

The listed share capital of Brims hf. was ISK 1,956 million at the end of 2020. By the end of the year, the company had equity with a nominal value of ISK 35 million, while equity shares with a nominal value of ISK 22.1 million were sold in 2020. Outstanding share capital amounted to ISK 1,921 million. The number of shareholders at the beginning of the year was 854 but was 880 at the end of the year. At the end of 2020, four shareholders owned more than a 10% share in the company, Útgerðarfélag Reykjavíkur hf. (UR Seafood) owned 34.53%, the State Employees' Pension Fund Division A owned 13.31%, the Pension Fund of Commerce owned 10.88%, and RE-13 ehf. owned 10.23%.

The share price was 50.1 at the end of 2020 and 39.1 at the beginning of the year. The real return on shares during the year, including dividends in the company, turned out to be positive by 26.4%. It is based on bonds bought at the closing price of 2019 and sold at the end of 2020, taking into account the payment of dividends and inflation during the year. In the long run, the real return on equities, which was bought at the end of 2000 and sold at the end of last year, averaged 10.3% per year.

Registered trading in Brim hf. shares amounted to ISK 9,423 million in 2020. Listed transactions in 2019 amounted to ISK 20,485 million. The nominal increase in the OMX Iceland index was 20.48% in 2020 and 21.91%, after accounting for dividends.

í millj. kr. %
Útgerðarfélag Reykjavíkur hf. 663,4 34,53%
Lífeyrissjóður starfsmanna ríkisins A-deild 255,8 13,31%
Lífeyrissjóður verslunarmanna 209,0 10,88%
RE-13 ehf. 196,5 10,23%
KG Fiskverkun ehf. 134,5 7,00%
Lífeyrissjóður starfsmanna ríkisins B-deild 69,6 3,62%
Birta lífeyrissjóður 53,1 2,77%
Stefnir ÍS 15 46,4 2,42%
Eignarhaldsfélagið VGJ ehf. 32,2 1,68%
Söfnunarsjóður lífeyrisréttinda 31,0 1,61%
Aðrir hluthafar 229,5 11,95%
Útistandandi hlutafé 1.921,0 100,0%

ANNUAL GENERAL MEETING 2020

Brim hf. held its Annual General Meeting on Friday, March 31, 2020. It was an online meeting and was attended by 92.7% of the active share capital or 1,760,411,586 shares.

Chairman of the Board, Kristján Þ. Davíðsson, presented the Board's report and reported on the company's operations and performance during the past operating year. Guðmundur Kristjánsson, CEO, presented the company's annual accounts and clarified various aspects of the company’s operations during the past year, as well as fielding questions.

The Board's proposal was that ISK 1.0 per share would be paid in dividends from share capital and it was approved unanimously.

The board of the company was self-elected. The following were elected to the Board: Anna G. Sverrisdóttir, Guðmundur Kristjánsson, Kristján Þ. Davíðsson, Kristrún Heimisdóttir, and Magnús Gústafsson.

Deloitte ehf. was the elected auditing firm.

At the first board meeting, following the annual general meeting, the board divided its roles. Kristján Þ. Davíðsson was elected Chairman and Anna G. Sverrisdóttir Vice Chairman.

There are two sub-committees of the Board of Directors, the Audit Committee and the Remuneration Committee. The Audit Committee for Ships, Gunnar Þ. Ásgeirsson chairman, Anna G. Sverrisdóttir, and Kristrún Heimisdóttir. The Remuneration Committee for Ships, Magnús Gústafsson, Chairman, Kristján Þ. Davíðsson, and Kristrún Heimisdóttir.