Corporate Governance

Eimskip is a limited liability company governed by the Public Limited Companies Act, No. 2/1995, its Articles of Association and the Board of Directors’ Rules of Procedure. Under its Articles of Association, the Company is governed by shareholders’ meetings, the Board of Directors and the Chief Executive Officer.

Corporate Governance practices are designed to ensure an open and transparent relationship between the Company's management, its Board of Directors, its shareholders and other stakeholders. The Corporate Governance Statement at Eimskip is also designed to ensure sound and effective control of the Company’s affairs and a high level of business ethics.

The Board of Directors approved an update of the Corporate Governance Statement for the Company on the 28th of February 2019. The statement declares that Eimskip complies with the accepted practices as stated in the 5th edition of the Corporate Governance guidelines, issued by the Iceland Chamber of Commerce, SA – Business Iceland and Nasdaq Iceland. Eimskip’s Corporate Governance Statement is accessible on the Company’s website.

The Corporate Governance guidelines, along with the Company’s Articles of Association and rules for issuers of securities listed at Nasdaq Iceland, make up the framework for the Corporate Governance practices for Eimskip.


The Company selects five members and two alternate members to the Board of Directors at the Annual General Meeting. Icelandic law stipulates that the gender ratio on the Board of Directors must be as even as possible, ensuring each gender represents no less than 40%. The Board of Directors holds supreme authority between shareholders’ meetings. It shall ensure that the Company’s organization and operations are in good order. It shall promote the development and long-term performance of the Company and supervise its operations and their conformity with existing laws and regulations. Together with the CEO, the Board takes the initiative on formulating policies and setting goals and risk parameters and has established an active system of internal controls that is verified regularly. The Board handles the recruitment and dismissal of the CEO.

Rules of Procedure for the Board of Directors were adopted in accordance with the fifth paragraph of Article 70 of the Public Limited Companies Act, No. 2/1995 and are supplementary to the Articles of Association. Under the Rules of Procedure, the Board of Directors elects subcommittees that operate on its behalf. The Rules of Procedure are accessible on the Company’s website.


The Board of Directors has two subcommittees the Audit Committee and the Remuneration Committee. Rules of procedure for the subcommittees can be found on the Company’s website.

The principal duties of the Audit Committee are to review all financial information and procedures regarding information disclosure from day-to-day management and the Company’s independent auditors and to ensure the independence of the Company’s independent auditors. The role and main responsibilities of the Audit Committee are set out in its rules of procedure. Members of the Audit Committee are Philip G. Quinlan, Lárus L. Blöndal and Ólafur Viggó Sigurbergsson.

The role of the Remuneration Committee includes preparing the Company’s Remuneration Policy and ensuring its enforcement and negotiating with the CEO on wages and other employment terms. Eimskip’s Remuneration Policy is accessible on the Company’s website. The role and main responsibilities of the Remuneration Committee are set out in its rules of procedure. Members of the Remuneration Committee are Hrund Rudolfsdóttir, Baldvin Thorsteinsson and Gudrún Blöndal.


The Company’s CEO is responsible for the day-to-day operations, in accordance with law, regulations and the Company’s Articles of Association, and follows the policies and instructions laid down by the Board. The CEO must at all times conduct his/her work with integrity and in the Company’s interests. Day-to-day operations do not include matters that are unusual or of great significance. The CEO shall make sure that the Company’s accounts are kept in accordance with law and practice and that the Company’s assets are kept in a secure manner. The CEO is obliged to abide by all instructions of the Board of Directors and to give the auditor any information requested. The CEO does not have the authority to make decisions concerning any matters that are assigned to others by law or are reserved for the Board under its Rules of Procedure.


Eimskip’s Executive Management consists of the Chief Executive Officer and the Directors of Finance, Human Resources, Operations, Sales and Marketing, Iceland Domestic Operations and Logistics, and International Operations and Logistics. All the executives have extensive experience within the Company. Further information on the Executive Management is to be found Organization and Executive Management.


Internal control and active risk management play an important role at Eimskip to ensure stable operations and earnings. The internal control and risk management procedures regarding financial processes are designed to minimize the risk of material misstatements. The Audit Committee monitors the Company’s internal control systems. The Risk Management Policy is aimed at minimizing potential negative effects on operations and earnings from marketing, operational and financial activities and to keep risks at acceptable levels. Risk management within the Company is governed by the Board of Directors, while the Audit Committee is responsible for its review on a regular basis. Further information on risk management and risk factors is to be found under Risk Management and Risk Factors.


Eimskip is a registered participant of the UN Global Compact, the United Nation’s initiative for social responsibility with respect to human rights, labor, environment and anti-corruption. With its participation, the Company has committed to manage its business operations so that the UN Global Compact and its Ten Principles become a part of the Company’s strategy, culture and day-to-day operations. The Company has also committed to advocating the UN Global Compact and its Ten Principles through available communication channels and communicating annually on implementation efforts.

Eimskip’s Corporate Social Responsibility (CSR) Policy is based on the Nasdaq ESG Reporting Guide, published in March 2017. The Nasdaq voluntary reporting guide focuses on 33 environmental, social and governance (ESG) performance indicators.

Further information on Eimskip’s social responsibility and its CSR Policy is to be found under Corporate Social Responsibility.


The Board of Directors approved a revision of the Company’s Code of Conduct in February 2018. The Code of Conduct is closely linked to the Company’s values: Achievement, Cooperation and Trust. The Code is also based on Eimskip’s aim to secure good return for shareholders with profitable growth, create value for customers with outstanding solutions and services, provide an outstanding workplace for employees with great team spirit and ambition and show concern for society by endorsing social responsibility and reducing its ecological footprint.

Eimskip’s Code of Conduct focuses on Human Resources, the Market and on Social Responsibility. It includes the Company’s Human Rights Policy and its Anti-Corruption and Bribery Policy. The Code of Conduct is accessible on the Company’s website.

Shareholder Information


Eimskip’s shares started trading on Nasdaq Iceland on 16 November 2012 with the ISIN number IS0000019800 and under the ticker symbol EIM.

The total number of Eimskip’s shares is 187,000,000. Each share has a nominal value of ISK 1.00 and entitles its holder to one vote. The Company holds 360,770 shares in treasury, corresponding to 0.2% of the total issued share capital of the Company and the number of outstanding shares is 186,639,230. There were 703 shareholders at the end of 2018.

Shares owned by A1988 hf.

A1988 hf. is the current name of the company formerly known as HF. Eimskipafélag Íslands, for which a composition agreement was accepted by all creditors in August 2009. The composition agreement included a provision by which unsecured creditors received shares in a new company, Eimskipafélag Íslands hf.

Under the composition agreement for A1988 hf., a 4.2% shareholding in Eimskip was not distributed to creditors, but reserved for A1988 hf. to satisfy contingent claims that might arise in the coming periods resulting from events prior to the composition agreement. These shares do not carry voting rights.

If the value of the shares exceeds the contingent claims accepted by A1988 hf. in accordance with the composition agreement, the remaining shares will be transferred to Eimskipafélag Íslands hf. without any compensation. These shares are not recognized in the statement of financial position at year-end. To date, no material unrecorded contingent claims have been accepted by A1988 hf.

In March 2014, Eimskip received 7,441,950 shares from A1988 hf. The shares corresponded to 3.7% of total share capital in Eimskip. A1988 hf. still holds 1,000,000 shares, corresponding to 0.5% of total share capital in Eimskip.

Largest shareholders

Three of Eimskip’s shareholders each owned over 10% in the Company at the end of 2018. Samherji Holding ehf. owned 27.1% of issued share capital. Lífeyrissjódur verzlunarmanna owned 14.9% and Gildi – lífeyrissjóður was the third largest with 12.4%. The 20 largest shareholders held 91.7%% of the total shares at year-end 2018.

As at 31 December 2018

  Shareholders Shares %
1. Samherji Holding ehf. 50.600,000 27.1%
2. Lífeyrissjódur verslunarmanna 27,785,070 14.9%
3, Gildi - lífeyrissjódur 23,116,139 12.4%
4. Lífeyrissj.starfsm.rík. A-deild 12,070,000 6.5%
5. Stapi lífeyrissjódur 9,231,897 4.9%
6. Global Macro Absolute Return Ad 8,699,370 4.7%
7. Birta lífeyrissjódur 8,441,706 4.5%
8. Lífeyrissj.starfsm.rík. B-deild 4,693,700 2.5%
9. Global Macro Portfolio 4,274,170 2.3%
10. Almenni lífeyrissjódurinn 3,611,558 1.9%
11. Festa - lífeyrissjódur 3,588,414 1.9%
12. The Wellington Trust Company Na 3,422,871 1.8%
13. Söfnunarsjódur lífeyrisréttinda 2,761,188 1.5%
14, IS Hlutabréfasjódurinn 2,139,033 1.1%
15. Frjálsi lífeyrissjódurinn 1,771,977 0.9%
16. Pacific Select Fund-Global Abso 1,684,100 0.9%
17. The Wellington Trust Company Na 1,052,146 0.6%
18. A1988 hf. 1,000,000 0.5%
19. Lífeyrissjódur Vestmannaeyja 825,000 0.4%
20. Lífsverk lífeyrissjódur 808,500 0.4%
  20 largest shareholders total 171,576,839 91.7%
  683 other shareholders total 15,062,391 8.1%
  Eimskipafélag Íslands hf. - treasury shares 360,770 0.2%
  703 shareholders total 187,000,000 100.0%

As at 31 December 2018

Shareholding Number of shareholders % Number of shares %
1 - 5,000 475 67.7% 1,000,371 0.5%
5,001 - 10,000 57 8.1% 458,347 0.2%
10,001 - 100,000 112 16.0% 3,859,650 2.1%
100,001 - 200,000 23 3.3% 3,402,446 1.8%
200,001 - 1,000,000 18 2.6% 8,975,077 4.8%
1,000,001-10,000,000 13 1.9% 55,372,130 29.6%
10,000,001 + 4 0.6% 113,571,209 60.7%
Total without treasury shares 703 100.0% 186,639,230 99.8%
Treasury shares     360,770 0.2%
Issued shares total     187,000,000 100.0%

2018 and 2019


The price of Eimskip’s shares in the IPO in 2012 was ISK 208.0 and the closing price on the first day of trading was ISK 225.0. As shown on the above graph of share prices in 2018 and 2019, there have been some fluctuations during the period. The closing price of the year 2018 was ISK 228.0 which represented Eimskip’s market capitalization based on outstanding shares at year-end 2018 in the amount of ISK 42.6 billion, the equivalent of EUR 320.0 million.

The closing price of Eimskip’s shares on 15 March 2019 was ISK 182.0 per share with market capitalization based on outstanding shares in the amount of ISK 34.0 billion, equal to EUR 255.0 million.

Dividend Policy

The policy of Eimskipafélag Íslands hf. is to pay annual dividend that equals an amount in the range of 10-65% of net earnings. Decisions on dividend payment, and the exact amount, are subject to the Company’s future investment plans, market outlook and satisfactory capital structure at any given time. The dividend policy is accessible on the Company’s website.

Eimskip paid dividends in the amount of ISK 6.8 per share on 18 April 2018. Total dividend payments amounted to ISK 1,269.1 million which represented 61.0% of net earnings for the year 2017. The paid dividend was equivalent to EUR 10.4 million.

The Board of Directors proposed to the Annual General Meeting 2019 a dividend payment of ISK 3.50 per share in 2019, amounting to a total of ISK 653.2 million or EUR 4.8 million, which represents approximately 64.8% of net earnings for the year 2018.

Investor Relations Policy

Eimskip recognizes the value of transparent and open communication with the Company’s stakeholders, consistent with commercial confidentiality and regulatory considerations. Stakeholders include investors, employees, customers, suppliers, the media, local communities and authorities.

The Board has issued an IR Policy which outlines the objectives and processes for effective communication between Eimskip and its various audiences. The IR Policy is available on the Company’s website.

Other Shareholder Information

Eimskip’s Investor Relations website provides information for investors, market participants and others. The website contains information about the Company, such as Corporate Governance documents, financial reports and presentations, Annual Reports, documents relating to Annual General Meetings, a general presentation on Eimskip, share information, news releases and investor contacts.

Risk Management and Risk Factors


Risk management is the process of analyzing and assessing the risk factors, which could prevent the Company from achieving its set goals. It also includes any necessary remedial action to minimize the anticipated effects of such risk factors.

Eimskip’s internal control and risk management procedures regarding financial processes are designed to minimize the risk of material misstatements. The Company does not have an internal audit function, but it uses internal control systems that are monitored by the Audit Committee.

An independent auditing firm is elected at the Annual General Meeting each year. The auditors are supposed to review the Company’s accounting records and material related to the Company’s operations and financial position and they are to have access to the Company’s books and documents at all times. They must examine the Company’s consolidated financial statements in accordance with international standards on auditing. Significant findings regarding accounting and internal control deficiencies are reported to the Board of Directors through the Audit Committee. Independent auditors are not allowed to own shares in the Company.

The Company goes through a detailed strategic and budgeting process each year and a strategy and budget report is prepared. The Board of Directors approves the Company’s strategy and budget each year. Deviations from the strategy and budget are carefully monitored on a monthly basis.

Active risk management plays an important role at Eimskip ensuring stable operations and earnings. The risk management policy aims to minimize potential negative effects on operations and earnings from marketing, operational and financial activities and to keep risk at acceptable levels.

The Board of Directors regularly communicates with the CEO regarding the identification of, description of and response to business risks potentially faced by the Company. Risk management within Eimskip is governed by the Board of Directors, while the Audit Committee is responsible for its review on a regular basis. The Executive Management is responsible for identifying material risks and developing the Company’s risk management strategy. The Company’s risk exposure is discussed at Board meetings and its risk management and risk factors are discussed in the Annual Report.

Eimskip monitors its financial risk factors and has defined treasury policies and procedures which sets acceptable risk limits and stipulates how to identify, measure and manage financial risk exposure. The Company has a financial reporting and internal control manual to which the group reporting entities must adhere to.


Detailed information about risk factors, presented as of the date of the Company’s Prospectus, 22 October 2012, can be found in Chapter 1 of the Registration Document, which is a part of the Prospectus. The Prospectus is accessible on the Company’s website.

The risk factors and uncertainties described in the following text are not the only risks that the Company as a whole faces; nor are they listed in order of priority with regard to significance or likelihood of occurrence.


Demand for transportation services has historically been highly cyclical and closely correlated with global economic activity. Eimskip is thus exposed to a possible economic downturn or recession, either globally or in one or more of the Company’s main markets. The Company is also sensitive to foreign exchange fluctuations and changes in its competitive position.


Eimskip’s operations are dependent upon many factors, e.g. access to terminals, IT systems, operation and ownership of vessels, supply of and demand for fuel, international and EU regulations on lower sulphur emissions, inflation, the reputation of the Company and its ability to retain key personnel and customer contracts. Furthermore, refugees and stowaways and incidents involving significant damage, loss or environmental pollution are a risk factor to the Company. Changes in the legislative, political, governmental and economic framework may have a material impact on the Company’s business. The Company is dependent on various licenses relating to its operations and is subject to contractual risk in relation to its obligations to fulfil various provisions of its contracts.


Eimskip is exposed to financial risk factors, including currency risk, risk related to availability of funding, interest rate risk, liquidity risk, credit risk, tax risk, fuel price risk, risk related to the financial reorganization of A1988 hf. and risk in relation to potential amendments to International Financial Reporting Standards (IFRS).

Some of the financial risk factors are addressed as follows.


Eimskip is exposed to currency risk on sales, expenses and borrowings that are denominated in currencies other than the functional currencies of the Company and its entities. The majority of the Company’s revenue and assets, and of its obligations and interest-bearing debt, are denominated in currencies other than the ISK. Subsidiaries use the local currency where they are based, except Eimskip Ísland ehf where the functional currency is the EUR.

As can be seen from the graphs below, the revenue and expenses of Eimskip provide, to a certain degree, a natural currency hedge. The Company believes that the natural currency balance of its operations provides hedging and is investing in some external hedging instruments, such as derivatives. When planning for large investments in a non-EUR currency, due consideration is given to whether hedging is prudent. Decisions on this are made on a case-by-case basis.

Assets and liabilities in the balance sheet are mostly denominated in EUR or the relevant operating currency of the entities. The mismatch of other non-operating currencies on the balance sheet is mainly related to the USD, as is shown in a table under note 19 in the Consolidated Financial Statements 2018.
Revenue 2018




Eimskip is exposed to risks related to the availability of funding. The Company is, to some extent, dependent on access to sufficient funding at acceptable terms and may not be able to secure new sources of liquidity or funding, should projected or actual liquidity fall below the levels it requires. These factors could also impact the ability of Eimskip’s shareholders to provide it with liquidity and there can be no assurance that the Company could obtain additional shareholder funding. To manage this risk factor the Company seeks long-term borrowings where applicable, maintains a healthy and stable current ratio and produces internal short-term cash flow reports on a regular basis.


Interest rate risk is the risk borne by an interest-bearing liability, such as a loan or a bond, due to variability of interest rates. Eimskip’s interest rate risk exposure is due to its debt and lease liabilities, which are mainly denominated in EUR. The Company’s long-term debt is primarily based on floating interest rates and consequently Eimskip is exposed to fluctuations in the general level of interest rates. However, the Company’s current funding structure limits to some extent risk against an increase in interest rates. The Company currently holds an interest rate swap to fix its interest rates denominated in the USD. Its interest rate exposure is carefully monitored and reviewed in line with interest rate developments on financial markets. For further information on Eimskip’s nominal interest rates, reference is made to note 17 in the Consolidated Financial Statements 2018.


Eimskip has liabilities and obligations which arise over time and the Company may not have the liquidity to meet its liabilities as they fall due. Eimskip’s approach to managing liquidity, i.e. cash on hand or short-term marketable securities, is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. For further information on liquidity status, reference is made to note 19 in the Consolidated Financial Statements.


Credit risk is the risk of financial loss to the Company if a customer or counterparty in a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and its investment in securities.

Eimskip’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, no single customer accounts for more than 5% of the Company’s revenue.

Eimskip has established a credit policy under which each new customer is individually analyzed for creditworthiness before the Company’s standard payment and delivery terms and conditions are offered. The Company’s review includes external ratings when available and in some cases bank references. Customers that fail to meet the Company’s creditworthiness benchmark may transact business with the Company on a pre-payment basis only.

In spite of these precautionary measures, a general downturn in financial markets and economic activity may result in a higher volume of late payments and outstanding receivables. Eimskip’s sales will depend on the financial position of its counterparties and there can be no guarantee that the financial position of the Company’s customers and other contract parties will be sufficient to honor their obligations under their contracts with the Company. Even though the Company seeks to recover all outstanding receivables, the amounts of write-offs may increase. Trade and other receivables of Eimskip amounted to EUR 124.1 million at the end of 2018, which represents 18.0% of the Company’s revenue.


The supply and demand of fuel is unpredictable and price fluctuations are based on events that are outside of Eimskip’s control. Therefore, the Company cannot accurately predict the future availability or price of fuel. A number of issues, including geopolitical developments, supply of and demand for oil, actions by the Organization of Petroleum Exporting Countries (OPEC) and other oil producers, war and unrest in oil-producing countries and regions, regional production patterns, environmental concerns and other unpredictable events can affect the availability and price of fuel and may result in future fuel supply shortages and price increases.

Fuel costs accounted for 6.7% of Eimskip’s expenses in 2018. The Company is exposed to fluctuations in the price of crude oil and oil products. In order to minimize its exposure to fluctuations in oil prices, the Company adds a surcharge to its prices, commonly referred to as the Bunker Adjustment Factor (BAF) and the Bunker Adjustment Trucking (BAT) depending on the oil prices at the time of transport. The Company is also investing in some hedging instruments to minimize further the fuel price risk. The BAF, BAT and other pricing adjustments compensate for approximately 80% of Eimskip’s risk relating to fluctuations in oil prices. However, significant increases in oil prices could lead to downward pressure on the Company’s tariffs from its customers.

Majority of Eimskip’s sailing routes lie through Emission Control Areas (ECA). Within ECA shipping companies are obliged to use fuel with a sulphur content no higher than 0.1%, which is more expensive than fuel with higher sulphur content. In order to compensate for the higher cost, the Company charges its customers a Low Sulphur Surcharge (LSS).