1. Capital structure
The company shall have a well-balanced capital structure that takes into account anticipated net profit, cash flow, financial status, investment levels and capital cost, seen over an entire economic cycle.
Regularly communicating the company’s perception of its optimal and long-term capital structure and needs serves to clarify its dividend capacity for shareholders. In line with this strategy, capital that cannot effectively be used to secure or develop the company’s operations should be distributed to its shareholders.
When the board determines how surplus liquidity is to be distributed to the shareholders, it must consider the particular risks associated with the repurchase of shares, as well as market-generated price fluctuations, the relationship between different asset classes and their impact on variable compensation schemes. These risks shall be considered in relation to the individual company’s situation and compared to the available alternatives. The board shall justify its proposal.
In principle, new share issues should respect the preferential rights of existing shareholders. Directed placements may nevertheless be justified in special cases. In such cases, the board shall provide clear justification for its action.