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 27th of February 2020. 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 Lárus L. Blöndal, Chairman, Vilhjálmur Vilhjálmsson and Ólafur Viggó Sigurbergsson.  

The role of the Remuneration Committee includes preparing the Company’s Remuneration Policy, 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 are Chairman Hrund Rudolfsdóttir, Vilhjálmur Vilhjálmsson, and Gudrún Blöndal.


The Company’s CEO is responsible for day-to-day operations in accordance with law, regulations, and the Company’s Articles of Association. The CEO must also follow the policies and instructions laid down by the Board. The CEO must at all times conduct his work with integrity and take account for the Company’s interests. Day-to-day operations do not include matters which 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 obligated to abide by all instructions of the Board of Directors and shall 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 that are reserved to the Board under its Rules of Procedure. The CEO shall ensure that Directors of the Board are regularly provided with accurate information on the Company’s finances, development, and operations to enable them to perform their duties. The information shall be in the form and of the quality determined by the Board. The information shall be available when needed and as up-to-date and accurate as possible. The CEO is to inform the Board on all major issues involving the operations of the Company or its subsidiaries and is to attend the Board meetings. He participates in the Boards of the subsidiaries within the group.


The Executive Management of Eimskip consists of the Chief Executive Officer and the Executive Vice Presidents of Finance, Operations, International Operations, Human Resources, Iceland Sales and Business Management, and Iceland Domestic Operations. All the executives have extensive experience within the Company. Further information on the Executive Management is provided on the Company’s website.


Internal control and active risk management play an important role at Eimskip and aim 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 can 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 advocate the UN Global Compact and its Ten Principles through available communication channels and report 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 Corporate Social Responsibility Policy can 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 returns for shareholders with profitable growth, create value for customers with outstanding solutions and services, be an outstanding workplace for employees with great team spirit and ambition, and show concern for society with social responsibility and a reduced ecological footprint.

Eimskip’s Code of Conduct focuses on Human Resources, the Market, and 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

Share Capital

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 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 4,121,584 shares in treasury, corresponding to 2.2% of the total issued share capital of the Company. Outstanding shares are 182,878,416. There were 667 shareholders at the end of 2019.

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 financial position statement 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.

Largest shareholders

At the end of 2019, three of Eimskip’s shareholders each owned over 10% in the Company: Samherji Holding ehf. owned 27.1% of issued share capital, Lífeyrissjódur verzlunarmanna owned 14.9%, and Gildi – lífeyrissjódur was the third largest with 12.4%. The 20 largest shareholders held 91.2% of the total shares at year-end 2019.

As at 31 December 2019


  Shareholders Shares %
1. Samherji Holding ehf. 50,600,000 27.1%
2. Lífeyrissjóður verslunarmanna 27,785,070 14.9%
3. Gildi - lífeyrissjóður 23,116,139 12.4%
4. Lífeyrissj.starfsm.rík. A-deild 12,070,000 6.5%
5. Birta lífeyrissjóður 11,278,215 6.0%
6. Stapi lífeyrissjóður 9,331,897 5.0%
7. Global Macro Absolute Return Ad 8,699,370 4.7%
8. Lífeyrissj.starfsm.rík. B-deild 4,693,700 2.5%
9. Global Macro Portfolio 4,064,445 2.2%
10. Almenni lífeyrissjóðurinn 3,611,558 1.9%
11. Festa - lífeyrissjóður 3,588,414 1.9%
12. Söfnunarsjóður lífeyrisréttinda 3,302,823 1.8%
13. Sjóvá-Almennar tryggingar hf. 1,635,653 0.9%
14, Lífeyrissjóður Vestmannaeyja 1,297,800 0.7%
15. Kvika banki hf. 1,291,004 0.7%
16. IS Hlutabréfasjóðurinn 1,049,237 0.6%
17. A1988 hf. 1,000,000 0.5%
18. ÍV Stokkur 716,779 0.4%
19. Lífsverk lífeyrissjóður 688,500 0.4%
20. Landsbankinn hf. 660,886 0.4%
  20 largest shareholders total 170,481,490 91.2%
  647 other shareholders total 12,396,926 6.6%
  Eimskipafélag Íslands hf. - treasury shares 4,121,584 2.2%
  667 shareholders total 187,000,000 100.0%

As at 31 December 2019


Shareholding Number of shareholders % Number of shares %
1 - 5,000 457 68.6% 950,827 0.5%
5,001 - 10,000 53 8.0% 423,067 0.2%
10,001 - 100,000 104 15.6% 3,456,392 1.8%
100,001 - 200,000 19 2.9% 2,931,333 1.6%
200,001 - 1,000,000 17 2.6% 7,701,472 4.1%
1,000,001-10,000,000 11 1.7% 42,565,901 22.8%
10,000,001 + 5 0.8% 124,849,424 66.8%
Total without treasury shares 666 100.0% 182,878,416 97.8%
Treasury shares     4,121,584 2.2%
Issued shares total     187,000,000 100.0%

2019 and 2020

The closing price of Eimskip’s shares on 20 March 2020 was ISK 148.0 per share with market capitalization based on outstanding shares in the amount of ISK 27.7 billion, equal to EUR 179.4 million.


The policy of Eimskipafélag Íslands hf. is to pay an annual dividend that equals an amount in the range of 10-65% of net earnings. Decisions on dividend payments and their 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 3.50 per share on 10 April 2019. Total dividend payments amounted to ISK 653.2 million, which represented 64.8% of net earnings for the year 2018. The paid dividend was equivalent to EUR 4.8 million.

The Board of Directors proposed to the Annual General Meeting 2020 that no dividend will be paid for the year 2019.


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 Investor Relations (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.


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 risk factors that 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 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 tasked with reviewing 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, which is then approved by The Board of Directors. Deviations from the strategy and budget are carefully monitored on a monthly basis.

Active risk management plays an important role at Eimskip. Its purpose is to ensure 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 that the Company could potentially face. Risk management within Eimskip is governed by the Board of Directors, while the Audit Committee is responsible for its review on a regular basis.

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 outlined in the Annual Report.

Eimskip monitors its financial risk factors and has defined treasury policies and procedures that set acceptable risk limits and stipulate 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.


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 or with regard to significance or likelihood of occurrence.


Demand for transportation services has historically been highly cyclical and closely correlates 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, 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 21 in the Consolidated Financial Statements 2019.




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. In 2019, the Company introduced a target capital structure with the aim of keeping an equity ratio around 40% and leverage ratio in the range of 2x - 3x net interest-bearing debt to EBITDA.


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, to some extent, the Company’s current funding structure limits risk against an increase in interest rates. The Company currently holds an interest rate swap to fix parts of its interest rates denominated in the USD and EUR. 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 18 in the Consolidated Financial Statements 2019.


Eimskip has liabilities and obligations that 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 access to 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 21 in the Consolidated Financial Statements 2019.


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 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 127.9 million at the end of 2019, which represents 18.8% 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. That may result in future fuel supply shortages and price increases.

Fuel costs accounted for 6.2% of Eimskip’s expenses in 2019. The Company is exposed to fluctuations in 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 further minimize 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.

The 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%. New regulations were implemented as of 1 January 2020 where all ocean areas outside ECA have changed its sulphur limit to 0.5%. The new rules for 2020 will increase the bunker cost for the Company and in order to compensate for higher cost the Company increased its Low Sulphur Surcharge (LSS) paid by customers. Furthermore, the Company has invested in an exhaust gas cleaning system (scrubbers) for one of its vessels to further lower the cost.

COVID-19 Pandemic

Eimskip is impacted by the COVID-19 pandemic and faces related risks. Many countries have closed their borders to limit the influx of travelers, but the same countries still emphasize that the flow of cargo continues efficiently to secure supply chains.

Eimskip has taken various important measures, where the primary focus has been on securing employee safety and maintaining the logistic chain to service our customers. We have been operating a COVID-19 emergency team that has been working hard on these measures, as well as guidelines for employees, customers, and suppliers. Subsequently, we have substantially increased the flow of information to everyone and frequently communicate implemented and foreseeable measures as well as the prevention steps necessary to reduce operational risk.

Eimskip has performed an analysis to mitigate the risks to its day-to-day operations and to secure its employees.

The primary risks that Eimskip faces that relate to COVID-19 are:

Delays or disruptions in the logistics chain. Any delays or disruptions in the logistics chain can affect Eimskip. To mitigate the risk, Eimskip is in close contact with service providers in ports, terminals, and on roads to help secure the logistics chain.

Changes in supply or demand for consumer products. As expected, the supply and demand of customer products is shifting due to the pandemic, which in turn affects Eimskip’s customers.

Financial risks such as liquidity of customers, which can affect collections; fluctuations in foreign currencies; and oil prices. Eimskip has a strong cash position and a strong equity ratio.

COVID-19 pandemic global timeline. How Eimskip is affected, and to which extent,  is directly related to when the COVID-19 pandemic begins to diminish. A delay in recovery is a risk that the global economy faces.

It is still premature to elaborate on the financial effect the COVID-19 pandemic will have on Eimskip. The situation and outlook is constantly evolving. It is expected that the financial effect will be more clear at the end of May, when Eimskip publishes the results for the first quarter of 2020.