Corporate Governance

Gaming Innovation Group Inc. ("GIG" or the "Company") is a US public limited company incorporated in the State of Delaware, with its registered office in Bokeelia, Florida, USA and operations in Malta. As a Delaware company, GIG is subject to Delaware company legislation and regulations. In addition, certain aspects of Norwegian Securities law apply to the Company due to the listing on the Oslo Stock Exchange.

The Company's Board of Directors and management adheres to the Norwegian Code of Practice for Corporate Governance. The Company aims for compliance in all essential areas of the recommendation not fully met.

Adherence with the Code of Practice will be based on a “comply-or-explain” principle. If the Code of Practice is not complied with, an explanation shall be given as to why the company has chosen to deviate. The Code of Practice includes 15 main points and the Company’s operations are in all material respects in accordance with these. Below is a brief item-by-item account of the Company’s adherence to the Code of Practice. 

1. IMPLEMENTATION AND REPORTING ON CORPORATE GOVERNANCE

The Code of Practice is in material respects complied with through regular board meetings, ordinary follow-up of operations, periodic press releases and statements in annual reports and other information from the Company. Given the nature of GIG’s business, the Company is constantly working to improve its ethical and fair business practice. The Company is committed to be in compliance with all laws and regulations affecting our business. The Company has not defined ethical and CSR guidelines in accordance with the Company’s basic corporate values. 

2. BUSINESS

The Code of Practice is in material respects complied with through the Company’s articles of association and 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 web site. These goals, along with the strategic areas for attaining them, are described in more detail elsewhere in the annual report and on the Company’s web site.

3. EQUITY AND DIVIDENDS

The Code of Practice is in material respects complied with.

GIG’s equity at 30 September 2016 was EUR 99.8 million. Apart from financing of normal operating expenses, GIG’s business model requires low tied up capital in fixed assets, and the Board of Directors considers the current equity capital sufficient. The Board of Directors constantly assesses the Company’s need for financial strength in light of 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. According to common practice for Delaware companies, the Company has an authorized number of shares available which is higher than the current number of issued shares. The authorized number of shares has been approved by the shareholders in a Special Meeting of the Shareholders. In compliance with the Company’s by-laws and Delaware corporate law, the Board of Directors may issue shares up to this limit without any further shareholder approval.

4. EQUAL TREATMENT OF SHAREHOLDERS AND TRANSACTIONS WITH CLOSE ASSOCIATES

The Company is compliant with the Code of Practice. The Company has only one class of shares, which is listed on the Oslo Stock Exchange.

Under Delaware law, no pre-emption rights of existing shareholders exists, but 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 waive 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 a stock exchange announcement issued in connection with such increase in the share capital.

The Company owns treasury shares. When the Company carries out transactions in its own shares, it will be carried out either through the stock exchange or at prevailing stock exchange prices if carried out in any other way. Any transactions carried out by the Company in treasury shares will be reported to the Oslo Stock Exchange.

In case of any material transaction between the Company and shareholders, directors or senior management or any related close associates, the Board of Directors will obtain satisfactory valuation in order to secure that a transaction is entered into on arms-length conditions.

Members of the Board of Directors and Senior Management shall notify the Board in case of material direct or indirect interests in transactions entered into by the Company.

5. FREELY NEGOTIABLE SHARES

The Company is compliant with the Code of Practice. The Company has no limitations on the ownership or sale of the Company’s shares, except for the lock-up related to certain shares issued as payment for acquisitions made by the Company. All shares of GIG are freely negotiable and no form of restriction on negotiability is included in the Company’s articles of association.

6. GENERAL MEETINGS

The Code of Practice is in material respects complied with. Notices for shareholder meetings with resolutions and any supporting documents are sent by mail to all known shareholders according to the Company’s by-laws and articles of association. The Company’s by-laws require a minimum of 10 days’ notice to the shareholders, but the Company aims to give the shareholders longer notice when calling for 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.

The Company's chairman is normally chairing the annual shareholder meeting, and the board of directors are normally attending. It is allowed to vote separately on each candidate nominated for election to the Company’s corporate bodies.

The annual 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.

7. NOMINATION COMMITTEE

The Code of Practice in this instance is not complied with. As a Delaware corporation, the governing law does not require a nomination committee, and the Company does not have a nomination committee.

8. CORPORATE ASSEMBLY AND BOARD OF DIRECTORS: COMPOSITION AND INDEPENDENCE

The Company does not have a corporate assembly.

For the board of directors, the Code of Practice is in material respects complied with. The annual shareholders meeting elect 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.

The current board of directors consists of five members, whereof three are independent of the Company’s main shareholders. All of the board members own shares in the Company, either directly or indirectly.

As a Delaware company, the board members have unlimited periods, but the board members can be proposed, elected and re-elected at the Annual Shareholders Meeting. For the election of a new Board at the next annual shareholder meeting, the Company will aim to propose a composition that will be in line with the provisions in the Code of Practice.

The Chairman of the Board is elected by the by the Board of Directors according to the Company’s by-laws.

9. THE WORK OF THE BOARD OF DIRECTORS

The Code of Practice is 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. In addition to monitoring and advisory duties, the Board of Directors main tasks consist of participating in compiling the Company’s strategy. The Board of Directors appoints the CEO.

Following the annual shareholder meeting, the Board of Directors will appoint a remuneration committee and establish an annual plan for its work with internal allocation of responsibilities and duties, and will evaluate its performance on a yearly basis.

GIG is not considered a large company and does not have an audit committee.

10. RISK MANAGEMENT AND INTERNAL CONTROL

The Code of Practice is complied with. The Board of Directors constantly assesses the Company’s need for necessary internal control systems for risk management in light of the size and complexity of the Company’s business, including monitoring the Company’s corporate values, ethical guidelines and guidelines for corporate social responsibility. In connection with the annual report, the most important areas of risk exposure and internal controls are reviewed. 

11. REMUNERATION TO THE BOARD OF DIRECTORS

The Code of Practice is in material respects complied with. Remuneration to board members is at a sufficiently competitive level in order to ensure the desired composition of the board. The remuneration is a fixed amount and has no performance related elements. No board members have share options and no board members take part in incentive programs available for management and/or other employees.

As a general rule, 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 full Board and the remuneration shall be approved by the Board. All remuneration paid to each of the directors is described in the Annual Report.

12. REMUNERATION OF THE EXECUTIVE MANAGEMENT

The Code of Practice is complied with. The remuneration for the Chief Executive Officer is set by the Board. The Board also establishes guidelines for the remuneration of other members of senior management, including both the level of fixed salaries, the principles for and scope of bonus schemes and any option grants. The remuneration to senior management and the Company’s incentive stock option programs are described in the Annual Report. 

13. INFORMATION AND COMMUNICATIONS

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 chief executive officer (CEO) and chief financial officer (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.

14. TAKE-OVERS

The Code of Practice is complied with. The Company has no restrictions in its articles of associations or bylaws regarding company take-overs, and the Board of Directors is pragmatic with respect to a possible takeover of the Company.

If a take-over 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 under such circumstances is to maximize value for the shareholders, while simultaneously looking after the interest of the company’s employees and customers. 

15. AUDITOR

The Company does not have an audit committee. This task is performed by the Board of Directors in
collaboration with the CFO.

The Code of Practice is in material respects complied with, except for specific guidelines for the management’s opportunity to use the auditor for other services than audit. The Company uses the auditors as advisors for general financial purposes and in connection with the preparation of tax returns and tax advice generally.

For the 2015 fiscal year, the auditors have not participated in the board meeting that approved the annual financial statements or presented to the board a review of its work and the Company’s internal procedures. The auditors have, however, had a meeting with the chairman of the board regarding the annual financial statements. The auditors are also available for questions and comments at the Board of Directors’ discretion.