Corporate Governance in NORDEN
Table of content
- A two-tier management structure
- The Board of Directors
- NASDAQ OMX Copenhagen A/S's recommendations on best corporate practice
NORDEN continuously works on corporate governance issues and seeks to provide its shareholders and other stakeholders in due time with precise and relevant information about the Company’s strategy, operations, results and expectations.
The Board of Directors and the Board of Management closely follow the debate on corporate governance matters. The Board of Directors assesses that NORDEN complies with most of the corporate governance guidelines issued by the NASDAQ OMX Copenhagen A/S.
Download whitepaper on NORDEN’s corporate governance practice. 
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1. A two-tier management structure
NORDEN has a two-tier executive management structure consisting of a Board of Directors elected by the shareholders and the employees and a Board of Management appointed by the Board of Directors. There is no duality between the two bodies.
The Board of Management is responsible for the day-to-day management, organisation and development of the Company, the preparation and implementation of the strategy and internal and external reporting and follow-up. The Board of Directors evaluates the Board of Management’s work and performance.
NORDEN’s vision, mission and values are the cornerstones of the Company’s management. The management focus is long term, and the goal is for the Company to continuously develop for the benefit of its stakeholders and to achieve a reasonable performance within the risk framework set out by the Board of Directors.
2. The Board of Directors
2.1. Role
The Board’s guiding principle is to add value for the benefit of shareholders, customers and employees through controlled growth of the dry cargo and tanker activities.
The Board of Directors determines strategies, action plans, goals and budgets and sets out the risk management framework and supervises the Board of Management's performance as well as NORDEN's procedures and policies. The Board of Directors appoints the Board of Management and sets out its terms and tasks.
According to the Articles of Association, the Board of Directors has the authority to distribute extraordinary dividends and also has a 1-year authority to authorise NORDEN’s acquisition of treasury shares. The Board of Directors is not authorised to increase the Company’s share capital, however.
2.2. The work of the Board of Directors
The Board of Directors sets out a work schedule to ensure that all relevant issues are taken up and discussed during the year and that important policies, rules of procedure, internal rules, etc. are discussed at least once a year. Strategy and budgets are discussed and adopted in November and December.
In 2009, the Board of Directors held 15 meetings – 1 more than the previous year. There were 11 ordinary meetings, 4 of which were in the form of conference calls, and 4 extraordinary meetings, 1 of which was in the form of a conference call.
The Board of Directors has appointed a remuneration committee which is responsible for the implementation of NORDEN’s remuneration policy. The committee’s three members held three meetings in 2009. More details about remuneration committee.
The Board of Directors has also decided that the whole board will handle the statutory audit committee tasks. The task of the audit committee is to supervise control and risk management systems, audits, financial reporting, etc. 4 meetings included this work, including discussions of counterparty risk, impairment test, management and reporting tools and IT systems, the latter based on a Risk Review prepared by the auditors. More details about audit committee
Like previous years, the Board of Directors in 2009 carried out a systematic self-assessment on the basis of a questionnaire in order to improve its own work and its interaction with the Board of Management.
2.3. Board composition
Four to six members of the Board are elected by the shareholders by the shareholders in general meeting and the additional number of members are elected by the employees according to Danish legislation. All board members elected by the shareholders are independent of NORDEN. They hold no interests in the Company other than their interests as shareholders or representatives of shareholders.
2.4. Election
At each annual general meeting, two of the longest serving members elected by the general meeting retire. At the annual general meeting on 22 April 2010 Mogens Hugo and Alison J. F. Riegels retired by rotation and both were re-elected.
The age limit for board members is 72.
2.5. Continuity
The seniority of the board members is high, and the Board of Directors has managed NORDEN in periods of high growth as well as during economic downturns. This experience and insight is considered a great asset. The Board of Directors is considered to possess the capabilities necessary to perform its managerial and strategic tasks and act as good sparring partner to the Board of Management. Particularly relevant capabilities are: insight in the shipping industry in general and specifically within the areas of tankers and dry cargo, general management, strategy development, risk management, investment management, finance and accounting.
2.6. Order of business
The Board’s work is set out in an order of business, which is revised annually. In addition, the Company is governed by the principles that regulate the interaction between its management and its stakeholders, e.g. the Danish Companies Act; the Danish Financial Statements Act; the rules of NASDAQ OMX Copenhagen A/S and NORDEN's articles of association, policies and directives.
Since 2006, the Board of Directors has carried out annual, systematic self-assessments on the basis of a questionnaire in order to improve its own work and its interaction with the Board of Management. The Board of Directors has also set up a remuneration committee to set out a framework for the Company’s remuneration and bonus payments.
The Board of Directors has established an audit committee and has decided that the whole board will handle the statutory audit committee tasks. Four meetings was held in 2009 in the audit committee.
In 2009, the Board of Directors held 15 meetings – 1 more than the previous year. There were 11 ordinary meetings, 4 of which were in the form of conference calls, and 4 extraordinary meetings, 1 of which was in the form of a conference call.
Eight ordinary meetings have been scheduled for the Board of Directors in 2010. A fixed annual calendar ensures that all relevant issues are taken up and discussed during the year.
3. NASDAQ OMX Copenhagen A/S's recommendations on best corporate practice
NASDAQ OMX Copenhagen A/S has adopted a set of corporate governance recommendations. NORDEN complies with the vast majority of the recommendations, but has chosen a different and more suitable practice in the folloiwing areas:
NORDEN does not have a ceiling on the number of directorships a board member may hold. NORDEN believes that what is important is each individual member’s capacity, capabilities and contribution – not some automatic limit. The Board of Directors regularly reviews its members’ workload and finds it appropriate to the members' positions with NORDEN.
NORDEN does not have a stakeholder policy as recommended, but does have an IR policy, among other things. Consideration for the Company’s stakeholders is deeply integral to NORDEN’s corporate values, mission and day-to-day operations.
According to the recommendations, all board members elected by the shareholders should stand for re-election every year, but at NORDEN, the 2 board members elected by the shareholders with the longest term retire every year. 5 of the 8 board members (including those elected by the employees) are new members elected within the past 2 years.
The recommendations propose that the composition of the Board of Directors should factor in diversity in respect of gender and age. NORDEN considers many aspects, particularly knowledge and competences.
NORDEN does not disclose the remuneration of each member of the Board of Management and the Board of Directors as recommended. NORDEN believes that what is important is that the shareholders are able to consider the total amount of remuneration. Remuneration 
The board members’ other directorships in Danish and foreign companies and foundations are disclosed here (Profile - Board of Directors), but the Board of Directors has chosen not to include a few directorships that are considered insignificant.
A systematic examination (whitepaper) of NORDEN’s corporate governance practice as compared with NASDAQ OMX Copenhagen A/S is available in the top section above.
3.1. Initiatives in 2010
The Board of Directors has planned 8 ordinary meetings. The Board of Directors will discuss its remuneration in light of market conditions, workload, requirements, etc. and present the results of these discussions to the shareholders at the annual general meeting.
The Danish Corporate Governance Committee has proposed a number of changes to its recommendations. Most of the changes match NORDEN’s existing practice, others can easily be implemented, whereas a few proposals do not fit in with NORDEN’s customs. NORDEN will systematically consider the new recommendations when they become effective.
A systematic examination (whitepaper) of NORDEN’s corporate governance practice as compared with NASDAQ OMX Copenhagen A/S is available in the top section above.
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