Investor

Corporate Governance in NORDEN

Table of content

  1. Whitepaper on NORDEN’s corporate governance practice
  2. A two-tier management structure
  3. The Board of Directors
    1. Role
    2. The work of the Board of Directors
    3. Board composition
    4. Election
    5. Continuity
    6. Order of business
  4. Board remuneration
  5. Recommendations from the Danish Corporate Governance Committee/NASDAQ OMX Copenhagen A/S 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 Executive Management closely follow the debate on corporate governance matters. The Board of Directors assesses that NORDEN complies with the vast majority of the corporate governance guidelines issued by the  NASDAQ OMX Copenhagen A/S.

1. Whitepaper on NORDEN’s corporate governance practice


Covering the financial year 2014:

Whitepaper pdf
Whitepaper pdf

 


 

Covering the financial year 2013:

Whitepaper pdf
Whitepaper pdf

 

 

Covering the financial year 2012:

Whitepaper pdf
Whitepaper pdf

 

 

Covering the financial year 2011: 

Whitepaper - updated 1 March 2012 pdf
Whitepaper - updated 1 March 2012 pdf
Whitepaper previous pdf
Whitepaper previous pdf


Covering the financial year 2010:

Whitepaper pdf
Whitepaper pdf


 

Covering the financial year 2009:

Whitepaper pdf
Whitepaper pdf  


   

2. A two-tier management structure

As customary in Denmark, NORDEN has a two-tier management structure consisting of a Board of Directors and an Executive Management. There is not duality between the two bodies. The majority of the Board of Directors are elected by the shareholders at the general meeting, the rest is elected by the employees. The general meeting is the supreme authority, and resolutions are adopted by simple majority of votes, unless otherwise provided by legislation or by NORDEN’s articles of association

The Board of Directors appoints the Executive Management and sets out its responsibilities and conditions. The Executive Management is responsible for the daily management, organisation and development of NORDEN, for managing assets, liabilities and equity, accounting and reporting, and it also prepares and implements the strategies. The ongoing contact between the Board of Directors and the Executive management is chiefly handled by the Chairman and the CEO. The Executive Management participates in the board meetings and is supplemented by other selected executives in the stratey meetings.

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 develop for the benefit of its stakeholders - also in fluctuating markets - to achieve reasonable and fairly predictable earnings within the risk framework set out by the Board of Directors. See also Risk Management.

3. The Board of Directors

3.1. Role

The Board of Directors determines strategies,policies, goals and budgets. In addition, it sets out the risk management framework and supervises the work, procedures, etc. carried out by the daily management.

According to the Articles of Association, the Board of Directors has the authority to distribute extraordinary dividends and a 1-year authority to authorise the Company’s acquisition of treasury shares. The Board of Directors is, however, not authorised to increase NORDEN’s share capital.

3.2. The work of the Board of Directors

The Board of Directors sets out a work schedule to ensure that all relevant issues are discussed during the year and that important policies, rules of procedure, internal rules, etc. are discussed at least once a year. The strategy and budget process is initiated at a seminar in October/November, while final adoption takes place at a meeting in December.

During 2013, a total of 11 board meetings have been held, of which 4 were teleconferences. Attendance was 97% for the shareholder-elected board members and 88% for the employee-elected board members. To this should be added that the employee-elected board members include seafaring staff, who might be otherwise occupied at sea and therefore cannot attend.

The Board of Directors has a remuneration committee responsible for supervising the implementation of NORDEN’s remuneration policy. The committee held three meetings in 2013. More details about remuneration committee.

4 of the board meetings in 2013 included the tasks which the Board of Directors undertakes as audit committee. These responsibilities include supervision of control and risk management systems, auditing, financial reporting, etc. The Board of Directors evaluates its composition, performance and interaction with the Executive Management on an ongoing basis.  More details about audit committee

 Explanation of control and risk management in connection with the financial reporting is available here

3.3. 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. 

The Board of Directors currently has 9 members – 6 elected by the shareholders and 3 elected by the employees in NORDEN. None of the members elected by the shareholders have previously been employed with the Company, nor do they have any interest in NORDEN other than their natural interests as shareholders.See board members here

In order for the Board of Directors to be able to both perform its managerial and strategic tasks and at the same time act as a good sparring partner to the Executive Management, the following skills are deemed particularly relevant: insight into shipping (specifically within dry cargo and tankers), general management, strategic development, risk management, investment, finance/accounting as well as international experience. The current Board of Directors is considered to possess these skills. See board members' skills here

In 2013, the Board of Directors set target figures for the share of the underrepresented gender on the Board and formulated a policy to increase the share of the underrepresented gender on the other management levels. The target for the share of shareholder-elected women on the Board of Directors is to retain representation of at least 16% and aim at increasing this share to 33% before 2017.

3.4. Election

At each annual general meeting, two of the longest serving members elected by the general meeting retire. At the annual general meeting on 23 April 2014 Erling Højsgaard and Arvid Grundekjøn retired by rotation and both were re-elected. 

The age limit for board members is 72.

The members elected by the employees are elected for a 3-year term.

3.5. 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.

3.6. 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.

The Board of Directors has an audit committee. The responsibilities of the audit committee are undertaken by the Board of Directors in unison. More details about audit committee

In 2013, the Board of Directors held 11 meetings.

For 2014, the Board of Directors has planned 11 meetings, 4 of which are teleconferences in connection with the annual and interim reports. To this should be added 4 planned chairmanship meetings as well as meetings in the remuneration committee. As previously, the Board of Directors will discuss strategy and budget at 2 meetings at the end of 2014. A fixed annual calendar ensures that all relevant issues are taken up and discussed during the year.

4. Board remuneration

Each member receives a base fee, and the Chairman and Vice Chairman also receives a supplement fee. The total annual remuneration for 2013 for the 9 board members is unchanged in DKK corresponding to USD 1.1 million.

5. Recommendations from the Danish Corporate Governance Committee/NASDAQ OMX Copenhagen A/S on best corporate practice

In 2013, the Board of Directors has discussed the updated recommendation from the Danish Corporate Governance Committee.

In the top section above a systematic summary can be found of the 47 recommendations, which NORDEN follows by and large. Though in some areas, the Company has chosen a different and for NORDEN more suitable practice.

  • It is recommended that the board members elected by the shareholders should stand for re-election every year at the annual general meeting. In NORDEN, 2 of the shareholder-elected board members stand for election every year. NORDEN attaches great significance to ensuring the necessary continuity.
  • It is recommended that the majority of the members of a board committee are independent. However, NORDEN’s audit committee is made up of the entire Board of Directors as the modest size of the Board of Directors allows for an efficient handling of matters. The Chairman of the Board is also Chairman of the audit committee.
  • It is recommended that the Board of Directors appoints a nomination committee. Currently, NORDEN does not have a nomination committee. The tasks are undertaken by the chairmanship, who ensures that ongoing discussions are held and decisions are made by the entire Board of Directors.
  • It is recommended that there is clarity on performance criteria and measurability for award of variable parts of variable components in the remuneration policy. At NORDEN, the general meeting has adopted a remuneration policy which for members of the Executive Management both includes bonus agreements with performance criteria and discretionary award of cash bonuses based on i.a. performance, competitive environment, market situation and outlook as well as personal performance. The members of the Executive Management have the opportunity to earn discretionary bonuses based on achievement of pre-determined targets or criteria for success in relation to their specific management function. The work and performance of the Executive Management are assessed on an ongoing basis and always in connection with the annual negotiations on remuneration.
  • It is recommended that the qualifying period for a variable part of a remuneration agreement is longer than one calendar year. At NORDEN, any discretionary bonus is on an annual basis. Long-term focus and value creation are ensured partly through continuous dialogue on priorities, focus areas and results and partly by determining relevant performance criteria in the bonus agreement.
  • It is recommended that total remuneration received by each member of the Board of Directors and Executive Management from the company and other companies in the group is disclosed in the annual report. NORDEN does not disclose remuneration of each separate member of the Board of Directors or the Executive Management as NORDEN finds that the important thing must be for the shareholders to be able to consider the total amount of remuneration and its development.

A systematic examination (whitepaper) of NORDEN’s corporate governance practice as compared with the Danish Corporate Governance Committee/NASDAQ OMX Copenhagen A/S is available in the top section above.