In pursuing our corporate objective, we are committed to the highest level of governance and to cultivating a value-based performance culture that rewards exemplary ethical standards, respect for the environment and personal and corporate integrity. We believe that there is a link between high-quality governance and the creation of shareholder value.

The work of the board of directors is based on the existence of a clearly-defined division of roles and responsibilities between the shareholders, the board of directors and the management of StatoilHydro

Our governing structures and controls help to ensure that we run our business in a profitable manner for the benefit of our shareholders, employees and other stakeholders in societies in which we operate.

The following principles underline our approach to corporate governance: All shareholders will be treated equally StatoilHydro will ensure that all shareholders have access to up-to-date, reliable and relevant information about the company's activities StatoilHydro will have a board of directors that is independent of the group's management. The board focuses on there not being any conflicts of interest between owners, the board of directors and the company's management The board of directors will base its work on the principles for good corporate governance applicable at all times

Corporate governance in StatoilHydro is subject to annual reviews and discussions by the corporate board of directors.

StatoilHydro's board of directors endorses the 'Norwegian Code of Practice for Corporate Governance', last revised 4 December 2007. The company's compliance with and, if applicable, deviation from the Code of Practice is commented on and these comments made available. 

It is the board's view that StatoilHydro has complied with the code of practice throughout the year ended 31 December 2008. In the statutory report, the board presents its statement on corporate governance, sequenced as the Norwegian code of practice stipulates. 

Compliance with NYSE listing standards

StatoilHydro is a public limited company with a governance structure based on Norwegian law. StatoilHydro's primary listing is on the Oslo stock exchange (Oslo Børs). The group is also registered with the US Securities and Exchange Commission and listed on the New York Stock Exchange (NYSE). As a consequence, StatoilHydro is required to disclose any significant ways in which its corporate governance practices differ from those applicable to US companies under the NYSE listing standards. A statement of difference, pursuant to Rule 303A.11 of the NYSE Listed Company Manual, is below.

Committees

NYSE rules applicable to US companies require that there be certain board committees composed of independent directors with responsibility for certain matters.

In accordance with Norwegian law, managing the company is the responsibility of the board of directors.

StatoilHydro has an audit committee and a compensation committee (called remuneration committee), which are responsible for preparing certain issues for the board of directors.

The committees operate pursuant to charters that are broadly comparable to the form required by the NYSE rules.

The committees report on a regular basis to and are subject to continuous oversight by the board of  directors.

The membership of StatoilHydro's audit committee includes one employee-elected director, who meets the requirements for independence under Rule 10A-3(b)(1) of the US securities  Exchange Act of 1934, but would not be considered independent for purposes of the NYSE rules.

Among other things, the audit committee evaluates the qualifications and independence of the company's external auditor. However, in accordance with Norwegian law, the auditor is elected by the annual general meeting of the company's shareholders.

StatoilHydro does not have a nominating/corporate governance committee. Instead, the roles prescribed for a nominating/corporate governance committee under the NYSE rules are principally carried out by the corporate assembly and the election committee.

StatoilHydro's corporate governance principles are developed by management and the board of directors.

Oversight of the board of directors and management is carried out by the corporate assembly.

Independence

StatoilHydro's board of directors consists of members elected by shareholders and employees, none of whom are executive officers of the company.

The directors elected among StatoilHydro's employees would not be considered "independent", as defined under NYSE Rule 303A.02, but are independent for the purposes of Rule 10A-3(b)(1) of the US securities Exchange Act of 1934, which applies to members of the company's audit committee.

The NYSE rules require that the board of directors must affirmatively determine that each "director has no material relationship with the listed company."

StatoilHydro's board of directors has determined that, in its judgement, all of the shareholder-elected directors are independent.

Shareholder approval of equity compensation plans

The NYSE rules require that all equity compensation plans, with limited exemptions, must be subject to shareholder vote.

Although issuance of shares and authority to buy back company shares must be approved by StatoilHydro's annual general meeting of shareholders under Norwegian company law, approval of equity compensation plans is normally reserved for the board of directors.