Audit and Sustainability Committee

The Audit and Sustainability Committee consists of at least three board members who supervise corporate accounts, our own financial reporting and internal audit, financial risk management and the work of the external auditor.

Our audit and sustainability committee members serve for two years, and the audit committee chair is appointed by the board of directors. The audit committee chair cannot also be the chairperson of the board of directors. We strive to keep the majority of people on the committee independent of Yara, and at least one independent member should also have auditing or accounting experience.

The current Audit and Sustainability Committee members are:
Adele Bugge Normann Pran (chair)
Håkon Reistad Fure
Rune Bratteberg

The full Audit and Sustainability Committee Charter is shown below:

 

1. Purpose

The Audit and Sustainability Committee shall be a preparatory body related to the Board’s management and supervisory duties concerning external financial reporting, internal control and risk management. These duties are further specified below.
The Audit and Sustainability Committee is appointed by, and reports to, the Board. The Audit and Sustainability Committee supports the Board in the administration and execution of its supervisory responsibilities in accordance with:

(a) The current provisions of the Public Companies Act, Accounting Act and Norwegian Securities Act

(b) Prevailing standards for stock exchange listing on stock exchanges where the Company’s shares are listed

(c) Recommendations related to Audit and Sustainability Committees provided in the Norwegian Code of Corporate Governance.

(d) External standards and benchmarks for sustainability governance, reporting and performance, as determined under section 4.6.

On this basis the Audit and Sustainability Committee shall consider:

  • The integrity of the Company’s external financial and sustainability reporting.
  • The Company’s procedures for financial and sustainability reporting and control.
  • The Company’s system for risk management including the identification, assessment and handling of the major risk exposures in the Company.
  • The qualifications, independence and performance of the external auditor.
  • Internal Audit Plans and audits conducted by the internal audit function.

 

2. Organization

The Board appoints at least three of its own members to the Audit and Sustainability Committee and appoints one of those as Chairperson of the Audit and Sustainability Committee. The Audit and Sustainability Committee’s members are nominated for a period of two years.

A member of the Audit and Sustainability Committee shall not have any relations that, in the Board’s opinion, may affect his or her independence as a member of the Audit and Sustainability Committee.

When appointing members of the Audit and Sustainability Committee, the Board shall ensure that the nominee has the necessary knowledge about basic routines for financial and sustainability accounting operations, internal controls and accounting principles.

The Chief Audit Executive (CAE) and the Chief Financial Officer (CFO) can, based on their own judgement, report issues directly to the Audit and Sustainability Committee. The CAE is the Audit and Sustainability Committee Secretary.


3. Meetings

The Audit and Sustainability Committee shall meet at the time of the quarterly and yearly external financial reporting, or as often as the Audit and Sustainability Committee finds necessary. The Audit and Sustainability Committee decides which of the Company’s representatives attend its meetings.

The Company’s CFO is expected to attend all Audit and Sustainability Committee meetings. External auditor attends the meetings in conjunction with relevant items on the agenda. Each regular meeting shall conclude with a special executive session for Audit and Sustainability Committee members only.

The Audit and Sustainability Committee shall meet with each of the Company's CEO, CFO, CAE and external auditor at least once a year with no other than the Audit and Sustainability Committee present.


4. Responsibilities

The responsibilities of the Audit and Sustainability Committee include the following:

4.1 Supervision of the integrity of the Company’s accounts, the process for financial and sustainability reporting and the internal control related to financial and sustainability reporting and risk management.


The Audit and Sustainability Committee shall:

  • Discuss the management control systems linked to risk factors in the Company and understand the consequences of the major risk exposures, on a general basis. Specifically assess the risks associated with financial and sustainability reporting.
  • At least once a year, together with management and external auditor, discuss
    (a) the Company's approach to and its requirements for external financial and sustainability reporting,
    (b) the quality, sufficiency and efficiency of controls and procedures designed to ensure that all relevant financial and sustainability information (including any material deficiencies) is reported by the company in a timely manner, and
    (c) the Company's internal controls related to financial and sustainability reporting (including any material deficiencies).
  • Together with management and external auditors, review (a) important accounting principles and practices applied by the company and (b) alternative accounting methods.
  • Review the external auditor’s plans and scope for the audit and the results of the external auditor's audit of financial statements and sustainability performance.
  • Be consulted in advance of all stock exchange notices relating to financial reporting, including "profit warnings".

4.2 Supervision of the relation to the external auditor

The Audit and Sustainability Committee shall:

  • Assist the Board in electing (by way of General Meeting) the external auditor for Yara International ASA.
  • Assess and suggest to the Board external auditor fees for auditing Yara International ASA, which shall be decided at the General Meeting.
  • Ensure that the external auditor does not perform services in a manner that is inconsistent with the role of external auditor. Review, together with the external auditor, the procedures for the external auditor’s provision of services other than auditing. At least once a year conduct a detailed review of the scope of the services actually supplied by the external auditor.
  • Pre-approve the audit and non-audit services, including the fees and terms associated with such services, and ensure that the external auditor does not provide any prohibited non-audit service for the Company. The Audit and Sustainability Committee may delegate authority to grant pre-approval within determined limits to the administration.
  • Evaluate the external auditor’s qualifications, work performance and independence.
  • Ensure that the external auditor complies with the requirements of rotating members of the audit team.

4.3 Handling of complaints, irregularities and concerns related to financial and sustainability reporting and audit issues

The Audit and Sustainability Committee shall ensure that the Company has adequate procedures for receiving, storing and managing issues related to complaints, irregularities and concerns related to financial and sustainability reporting, internal control over financial and sustainability reporting and auditing. This includes procedures for confidential and anonymous submissions by Company employees regarding issues related to financial and sustainability reporting and/or auditing. The Audit and Sustainability Committee shall be informed about all material issues.

4.4 Fraud and corruption

The Audit and Sustainability Committee shall be informed of and assess all cases of fraud and corruption involving employees of the Company. Management represented by the Chief Compliance Officer shall, at least once a year, submit a list of registered cases with a description of the systems used to detect and handle such events. 

Management represented by the Chief Compliance Officer shall present serious cases to the Audit and Sustainability Committee on an individual basis without undue delay.

4.5 Supervision of internal audit

The Audit and Sustainability Committee shall:

  • Maintain the day-to-day follow-up of the CAE on behalf of the Board and the Chairman of the Board.
  • At least once a year evaluate the adequacy of the internal audit system and regularly evaluate the performance of the internal audit function related to areas within the mandate of the Audit and Sustainability Committee.

4.6 Sustainability governance

  • The Audit and Sustainability Committee shall review the Company’s benchmark scores on chosen sustainability benchmarks and selection of such benchmarks, including assessment of emerging external governance structures against which the Company should expect to report. The Audit and Sustainability Committee shall together with the external auditor / reporting assurer review (a) important accounting principles and practices applied by the company, and (b) alternative accounting methods. The Audit and Sustainability Committee shall advice the Board in determining governance updates if required by the reviews.

4.7 Performance evaluation

  • The Audit and Sustainability Committee shall assess its own performance annually. The Audit and Sustainability Committee will base its work on the assumption that the external auditor, the CAE and Management represented by the Chief Compliance Officer have informed the Audit and Sustainability Committee of any issues considered important for the Audit and Sustainability Committee in performance of its tasks as defined in this Mandate.

4.8 Tax governance

  • The Audit and Sustainability Committee shall be informed and evaluate material risks and issues related to tax. The Audit and Sustainability Committee shall evaluate the Group’s Tax Policy and advice the Board in their approval.

 

5. Authority

The Audit and Sustainability Committee is entitled to inquire about all activities and matters related to the Company’s business which are necessary for the Audit and Sustainability Committee to fulfil this Mandate. The Audit and Sustainability Committee also has the right to demand access to information, facilities and personnel from the CEO. The Audit and Sustainability Committee can carry out any investigations considered necessary in order to perform its duties, and may employ the Company’s internal auditor, external auditor and external consultants in this regard.

 

6. Reporting

Minutes of Audit and Sustainability Committee meetings shall be made available to all Board members as soon as possible, and no later than at the second subsequent board meeting. The Chairperson of the Audit and Sustainability Committee shall report orally on the issues which have been assessed at the previous Audit and Sustainability Committee meeting, provided there is no complete protocol.

The Audit and Sustainability Committee shall report to the board annually, including an overall assessment of management's risk, control, and compliance processes, the result of the statutory audit and how the audit contributed to the financial reporting with integrity and the Audit and Sustainability Committee's roles, activities and recommendations. The Board may, at any time, require a more detailed oral or written report from the Audit and Sustainability Committee.


7. Limitation of the role of the Audit and Sustainability Committee

The Audit and Sustainability Committee is responsible only to the Board in connection with the execution of its duties. The Board has the complete and sole responsibility for the duties of the Audit and Sustainability Committee. The CEO is responsible for preparing and presenting the Company’s external financial annual and quarterly reports to the Board. The external auditor is responsible for auditing and reviewing annual reports. On request from the Board, the external auditor will perform a limited audit of the Company’s quarterly financial statements. When performing its duties, the Audit and Sustainability Committee does not give any expert opinions concerning the Company’s accounts, nor does the Audit and Sustainability Committee provide any professional approval of the external auditor’s work to anyone but the Board.