Corporate governance
Gentoo Media is committed to good corporate governance to ensure trust in the Company and to maximise shareholder value over time. The objective of the Company’s corporate governance framework is to regulate the interaction between the Company’s shareholders, the Board of Directors and the executive management. For the full Corporate Governance report, see below.
Articles of association
Gentoo Media Inc. (“Gentoo” or the “Company”) is a US public limited company incorporated in the State of Delaware, with its headquarter in Malta and operations in Denmark, Spain, Serbia and UK.
The Company was incorporated on 10 September 1992, and the most recent amendment to the Certificate of Incorporation occurred in a Special Meeting of Shareholders on 23 September 2024, with the updated Amended and Restated Certificate of Incorporation subsequently filed with the Secretary of State of Delaware on the same date. On the same date, the Company changed its name from Gaming Innovation Group Inc. to Gentoo Media Inc.
The GENTOO MEDIA – Amended and Restated
Auditors
Gentoo Media Inc.’s auditor is:
REID CPAs LLP,
7600 Jericho Turnpike, Suite 400,
Woodbury, NY 11797, USA.
The Maltese subsidiaries are audited by PWC Malta.
Corporate governance report
The Company is subject to Delaware company legislation and regulations. In addition, certain aspects of Norwegian Securities law, the Swedish Financial Instruments Trading Act and specific duties and responsibilities under the Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (the “MAR”) and related legislations apply to the Company due to its listing on both the Oslo Stock Exchange and on NASDAQ Stockholm, including the requirement to publish an annual statement of the Company’s policy of corporate governance.
The Company’s Board of Directors and management adheres to the Norwegian Code of Practice for Corporate Governance and the Swedish Corporate Governance Code. The Company has Norway as its home member state, and thus Norwegian regulations and the Norwegian Code will supersede in case of conflicts. Below is an item-by-item account of the Company’s adherence to the corporate governance codes.
Gentoo Media Inc. (“Gentoo” or the “Company”) is a US corporation incorporated in the state of Delaware with corporate number 2309086. The headquarters is in Malta with operations in
Denmark, Spain and Serbia.
Being a Delaware company, the Company is subject to Delaware company legislation and regulation. In addition, certain aspects of the Norwegian Securities law, the Swedish Financial Instruments Trading Act and specific duties and responsibilities under the Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (the “MAR”) and related legislations apply to the Company due to its listing on both the Oslo Stock Exchange and on NASDAQ Stockholm, including the requirement to publish an annual statement of the Company’s policy of corporate governance.
The Company’s Board of Directors and management adheres to the Norwegian Code of Practice for Corporate Governance, last revised 14 October 2021 (the “Norwegian Code”) and the Swedish Corporate Governance Code, last revised 1 January 2024 (the “Swedish Code”), both referred to as “the Codes” in this document. The Company has Norway as its home member state, and thus Norwegian regulations and the Norwegian Code will supersede in case of conflicts.
The Company aims for compliance in all essential areas of the Codes; however, as a Delaware company, there will be topics where the Codes are not fully complied with. The Codes are available at www.nues.no/eng and www. corporategovernanceboard.se.
The application of the Codes is based on a “comply or explain” principle and any deviation from the Codes is explained under each item. The corporate governance framework of the Company is subject to annual review by the Board of Directors and the annual corporate governance report is presented in the Company’s annual report and on the Company’s website.
This corporate governance report is currently structured to cover all sections of the Norwegian Code of Practice as a base, with extended sections to cover the Swedish Corporate Governance Code. Further explanation describes the Company’s corporate governance in relation to each section of the respective Codes.
The Company complies with the Codes in all material respects; however, it deviates on the following topics: Board authorisation to issue new shares (section 3) and formulation of guidelines for use of the auditor for services other than auditing (section 15).
The Codes are in material respects complied with through the Company’s Certificate of Incorporation and By-Laws (combined Articles of Association) and the annual report.
As a Delaware corporation, the Company’s business is not defined in the Articles of Association. A description of the business is available on the Company’s website and in the annual report. The Company’s objectives, strategy and risk profile are described in more detail in the annual report and on the Company’s website.
Given the nature of the Company’s business, the Company is constantly working to improve its ethical and fair business practice. The Company is committed to being compliant with all the laws and regulations affecting its business. The Company has defined ethical and sustainability guidelines in accordance with the Company’s corporate values and as recommended by the Codes.
The Codes are in material respects complied with. The Company’s equity as at 31 December 2023 was EUR 92.3 million. Apart from financing of normal operating expenses, the Company’s business model requires low tied-up capital in fixed assets and the Board of Directors considers the current capital as sufficient. The Board of Directors constantly assesses the Company’s need for financial strength based on the Company’s objectives, strategy and risk profile.
The Company has adopted a dividend policy under which, all else being equal, the Company will aim to pay a dividend according to continued self-imposed restrictions concerning financial solidity and liquidity, all of which should be complied with. To date, the Company has not paid any dividends to shareholders and no dividends are proposed by the Board of Directors for the year 2023.
According to common practice for Delaware companies, the Company has an authorised number of shares available which is higher than the current number of issued shares. The authorised number of shares has been approved by the shareholders in a shareholder meeting. In compliance with the Company’s Articles of Association and Delaware corporate law, the Board of Directors may issue shares up to this limit without any further shareholder approval. As at 30 September 2024, the number of authorised shares was 150,000,000 (par value USD 0.001) whereof 134,707,974 were issued and outstanding. The ISIN code is US36467X2062.
The Codes are in material respects complied with. The Company has only one class of shares, which is listed on both the Oslo Stock Exchange and NASDAQ Stockholm.
Under Delaware law, no pre-emption rights of existing shareholders exist, however the Company aims to offer pre-emption rights to existing shareholders in the event of increases in the Company’s share capital through private share issues for cash. If the Board of Directors carries out an increase in share capital by cash and waives to offer a pre-emption right to existing shareholders, this will be a minor increase, or if not, a justification will be publicly disclosed in connection with such increase in the share capital.
The Company is compliant with the Codes. The Company has no limitations on the ownership or sale of the Company’s shares. All GiG shares are freely negotiable and no form of restriction on negotiability is included in the Company’s Articles of Association.
The Codes are, in material respects, complied with as stated below. A shareholder meeting ensures the shareholders’ participation in the body that exercises the highest authority in the Company and in which the Company’s Articles of Association are adopted.
Notices for shareholder meetings with proposed resolutions and any supporting documents are announced on the Oslo Stock Exchange, on Nasdaq Stockholm and on the Company’s website and sent by mail to all shareholders registered in the Norwegian Central Securities Depository Euronext Securities Oslo (“ES-OSL”) (previously VPS) according to the Company’s Articles of Association. The Company’s by-laws require a minimum of 10 days’ notice to the shareholders; however, the Company has given the shareholders longer notice when calling for shareholder meetings, and the Company aim to apply the Swedish Code for notice and other procedures regarding shareholder meetings.
The Company allows shareholders to vote by proxy and prepares a form of proxy that is sent to shareholders and nominates a person who will be available to vote on behalf of shareholders as their proxy. Shareholders are allowed to vote separately on each candidate nominated for election to the Company’s corporate bodies.
The Company has decided to apply the Swedish Code by using English only for all communication, including the notice, as the ownership structure warrants it. The same applies to the minutes of the meeting. The Swedish Code will be applied when verifying and signing the minutes of shareholder meetings. A shareholder, or a proxy representative of a shareholder, who is neither a member of the Board nor an employee of the Company is to be appointed to verify and sign the minutes of shareholder meetings.
The Company’s chairman attends shareholder meetings, and the Company further aims that the requirements in the Swedish Code regarding other members of the board, the CEO, the nomination committee and the Company’s auditors to attend the annual general meeting.
The Codes are, in material respects, complied with as stated below. A shareholder meeting ensures the shareholders’ participation in the body that exercises the highest authority in the Company and in which the Company’s Articles of Association are adopted.
Notices for shareholder meetings with proposed resolutions and any supporting documents are announced on the Oslo Stock Exchange, on Nasdaq Stockholm and on the Company’s website and sent by mail to all shareholders registered in the Norwegian Central Securities Depository Euronext Securities Oslo (“ES-OSL”) (previously VPS) according to the Company’s Articles of Association. The Company’s by-laws require a minimum of 10 days’ notice to the shareholders; however, the Company has given the shareholders longer notice when calling for shareholder meetings, and the Company aim to apply the Swedish Code for notice and other procedures regarding shareholder meetings.
The Company allows shareholders to vote by proxy and prepares a form of proxy that is sent to shareholders and nominates a person who will be available to vote on behalf of shareholders as their proxy. Shareholders are allowed to vote separately on each candidate nominated for election to the Company’s corporate bodies.
The Company has decided to apply the Swedish Code by using English only for all communication, including the notice, as the ownership structure warrants it. The same applies to the minutes of the meeting. The Swedish Code will be applied when verifying and signing the minutes of shareholder meetings. A shareholder, or a proxy representative of a shareholder, who is neither a member of the Board nor an employee of the Company is to be appointed to verify and sign the minutes of shareholder meetings.
The Company’s chairman attends shareholder meetings, and the Company further aims that the requirements in the Swedish Code regarding other members of the board, the CEO, the nomination committee and the Company’s auditors to attend the annual general meeting.
For the Board of Directors, the Codes are in material respects complied with. The shareholder meeting elects representatives to the Board. The resolution on the composition of the Board
takes place with a simple majority. The Company seeks to nominate members of the Board representing all shareholders and independent from management. All board members are, on a yearly basis, up for re-election.
The current Board of Directors consists of six members, where fouri are independent of the Company’s main shareholders. XXXX of the board members own shares in the Company, either directly or indirectly. Information about the current board members, their expertise, independency and shareholdings can be found on the Company’s website.
As a Delaware company, the board members have unlimited periods, however the board members must be proposed, elected and re-elected at the annual shareholder meeting. The Chairman of the Board is formally elected by the Board of Directors according to the Company’s by-laws.
The Codes are in material respects complied with. The Board of Directors has the prime responsibility for the management of the Company and holds a supervisory position towards the executive management and the Company’s activities. The Company has established rules of procedures for the Board of Directors and executive management.
In addition to monitoring and advisory duties, the Board of Directors’ main tasks consist of participating in compiling the Company’s strategy and establishing the overall goals.
The Board of Directors appoints the CEO; the Swedish Code will be applied when it comes to appointing, evaluating and, if necessary, dismissing the CEO. The Board of Directors has to approve any significant assignments the CEO has outside the Company.
The Board of Directors will ensure that the Company’s six or nine-month report is reviewed by the Company’s auditor according to the Swedish Code. There is no such equivalent rule in the Norwegian Code.
The Board of Directors appoints a remuneration committee and an audit committee and establishes an annual plan for its work, with internal allocation of responsibilities and duties. The Board of Directors has evaluated its work through individual interviews with the nomination committee.
Members of the Board of Directors and senior management shall notify the Board of Directors in case of material direct or indirect interests in transactions entered into by the Company.
The Chairman of the Board is responsible for leading the work of the Board and to lead the board meetings. Continual contact with the CEO shall ensure that the Chairman of the Board monitors the Company’s development and that the Board receives the information required to be able to meet its commitments. The Chairman of the Board shall also represent the Company in matters concerned with ownership.
The Board held 10 minuted meetings in 2023, where 9 meetings had all members present. The minutes were taken by the Group CFO, as secretary to the Board. At every board meeting a business and financial update was given by the CEO.
The Codes are complied with. The Board of Directors constantly assesses the Company’s need for necessary internal control systems for risk management covering the size and complexity of the Company’s business. The Company employs various area-specific policies and procedures designed to manage the Company’s risk.
The Board of Directors has also established an independent audit committee which oversees the Company’s implementation of policies and procedures. The committee receives regular reports from the internal auditor on key risk areas which would have been subject to a detailed evaluation by the internal auditor. The internal auditor is independent and freely chooses areas to assess at his own discretion, generally focusing on business activities that could bring legal, security, financial or other operational risks.
In connection with the annual report, the most important areas of risk exposure and internal controls are reviewed.
The Codes are complied with and variable remuneration for the Board of Directors is not allowed in the Norwegian Code, which the Company follows. The remuneration to board members is at a sufficiently competitive level in order to ensure the desired composition of the Board of Directors. The remuneration is resolved by the annual shareholder meeting and is a fixed amount and has no performance-related elements.
The annual shareholder meeting in May 2024 resolved the remuneration of the Board of Directors, including remuneration for the remuneration committee and the audit committee. Remuneration to the Board is listed in Note 26 in the 2023 Consolidated Financial Statements.
No board members have share options and no board members take part in incentive programs available for management and/or other employees.
A general rule is that no members of the Board of Directors (or companies with which they are associated) shall take on specific assignments for the Company in addition to their appointment as Director. If such assignments are made, it shall be disclosed to the Board of Directors and the remuneration shall be approved by the Board of Directors.
The Codes are complied with and variable remuneration for the Board of Directors is not allowed in the Norwegian Code, which the Company follows. The remuneration to board members is at a sufficiently competitive level in order to ensure the desired composition of the Board of Directors. The remuneration is resolved by the annual shareholder meeting and is a fixed amount and has no performance-related elements.
The annual shareholder meeting in May 2024 resolved the remuneration of the Board of Directors, including remuneration for the remuneration committee and the audit committee. Remuneration to the Board is listed in Note 26 in the 2023 Consolidated Financial Statements.
No board members have share options and no board members take part in incentive programs available for management and/or other employees.
A general rule is that no members of the Board of Directors (or companies with which they are associated) shall take on specific assignments for the Company in addition to their appointment as Director. If such assignments are made, it shall be disclosed to the Board of Directors and the remuneration shall be approved by the Board of Directors.
The Code of Practice is complied with. The Company assigns importance to informing its owners and investors about the Company’s development and economic and financial status. Prompt financial reporting reduces the possibility of leakage and contributes to the equal treatment of shareholders.
Responsibility for investor relations (IR) and price sensitive information rests with the Company’s CEO and Group CFO, including guidelines for the Company’s contact with shareholders other than through general meetings.
All information distributed to the Company’s shareholders is available through the Company’s website. Each year the Company publishes to the market the dates of reporting for
planned major events.
The Company provides annually a sustainability report that are made available on the Company’s website. The Company has not presented a separate remuneration report, but information on remuneration to the Board of Directors and management, and share option plans, are available in the annual report.
The Code of Practice is complied with. The Company has no restrictions in its Articles of Association regarding company takeovers, and the Board of Directors is pragmatic with respect to a possible takeover of the Company.
If a takeover bid is made for the Company, the Board of Directors will ensure that shareholders are given sufficient and timely information and make a statement prior to expiry of the bid, including a recommendation as to whether the shareholders should accept the bid or not. The main responsibility of the Board of Directors under such circumstances is to maximise value for the shareholders, while simultaneously looking after the interest of the Company’s employees and customers.
The Company has an audit committee consisting of two directors. For the fiscal year 2023, the audit committee had five audit committee meetings with both members present in four meetings and had meetings with the external auditors regarding the third quarter review and the annual financial statements. The auditors have presented to the audit committee a review of their work and the Company’s internal procedures, including explanation of the results and information about the statutory audit.
The Company has not developed any specific guidelines for the management’s opportunity to use the auditor for other services than audit. The auditors are used as advisors for general financial purposes and in connection with the preparation of tax returns and general tax advice.
The auditors did not participate in the board meeting which finally approved the annual financial statements for 2023, but participated in previous board meeting and audit committee meetings discussing the annual report. The auditors’ comments were presented to the Board of Directors by management and the audit committee. The auditors have been available for questions
and comments at the Board of Directors’ discretion.
