Corporate Governance in NORDEN
- Whitepaper on NORDEN’s corporate governance practice
- A two-tier management structure
- The Board of Directors
- Board remuneration
- Recommendations from the Danish Corporate Governance Committee/Nasdaq Copenhagen 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 Copenhagen.
1. Whitepaper on NORDEN’s corporate governance practice
Covering the financial year 2014:
Covering the financial year 2013:
Covering the financial year 2012:
Covering the financial year 2011:
|Whitepaper - updated 1 March 2012|
|Whitepaper - updated 1 March 2012|
Covering the financial year 2010:
Covering the financial year 2009:
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 members of the Executive Management are responsible for the daily management, organisation and development of NORDEN, for managing assets, liabilities and equity, accounting and reporting, and also prepare and implement the strategies. The ongoing contact between the Board of Directors and the Executive management is primarily 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 when relevant.
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
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 2014, a total of 12 board meetings have been held, of which 4 were teleconferences. Attendance was 100% for the shareholder-elected board members and 89% 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 two meetings in 2014. More details about remuneration committee (terms of reference).
The Board of Directors has an audit committee responsible for supervising financial reporting, transactions with closely related parties, control and risk management systems, auditing etc. During 2014, the committee held 4 meetings at which the Company's liquidity, ship values and provision for onerous contracts have been discussed. More details about audit committee (terms of reference)
Explanation of control and risk management in connection with the financial reporting is available here
In 2014, the Board of Directors established a nomination committee. More details about nomination committee (terms of reference).
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.
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. 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 dry cargo and tankers), general management, strategic development, risk management, investment, finance/accounting as well as international experience. The 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.
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.
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 Copenhagen and NORDEN's articles of association, policies and directives.
The Board of Directors has an audit committee. More details about audit committee
In 2014, the Board of Directors held 12 meetings.
For 2015, 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 chairmanship meetings as well as meetings in the committees. As previously, the Board of Directors will discuss strategy and budget at 2 meetings at the end of 2015. 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 receive a supplement fee. The total annual remuneration for 2014 for the 9 board members is unchanged in DKK corresponding to USD 1.0 million. Additionally, Klaus Nyborg has been extraordinarily remunerated for his work as interim CEO in 2014.
5. Recommendations from the Danish Corporate Governance Committee/Nasdaq Copenhagen on best corporate practice
In 2014, the Board of Directors has discussed the updated recommendations from the Danish Committee on Corporate Governance.
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. These include;
- shareholder-elected board members, where NORDEN attaches great importance to ensuring continuity for which reason only 2 board members stand for election per year.
- 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.
- discretionary bonus, which in NORDEN is on an annual basis as 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.
- remuneration, where NORDEN discloses the total remuneration of the Board of Directors and the Executive Management, respectively, as 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 Copenhagen is available in the top section above.