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. In addition, the Executive Management participates in the board meetings, just as other selected executives particpate 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 volatile 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 first discussed at a seminar in October/November, while final adoption takes place at a meeting in December.

In 2012, the Board of Directors held 14 meetings - 9 physical meetings and 5 teleconferences.  Attendance was 97% for the shareholder-elected board members while the figure was 69% for the employee-elected board members. To this should be added that the figure for employee-elected board members includes seafaring staff, who might be at sea at the time of the meetings and therefore is unable to attend.

The Board of Directors has appointed a remuneration committee which responsibility is to oversee the implementation of NORDEN’s remuneration policy. The committee held three meetings in 2012. More details about remuneration committee.

The task of the audit committee is to supervise control and risk management systems, audits, financial reporting, etc. The responsibilities of the audit committee are undertaken by the Board of Directors in unison, and 4 meetings included this work. The audit committee has placed special focus on discussing impairment test and write-downs as well as counterparty and credit risks. 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 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. In the generational change of the Board of Directors, special emphasis is placed on shipping knowledge and international management experience. See board members' skills here

In the first quarter of 2013, the Board of Directors will set target figures for the share of the underrepresented gender on the Board and formulate a policy to increase the share of the underrepresented gender on the other management levels of the Company.

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 11 April 2012 Mogens Hugo and Arvid Grundekjøn retired by rotation and both were re-elected. In addition, Klaus Nyborg was newly elected.

The age limit for board members is 72.

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

At the general meeting on 24 April 2013, it will be proposed that Alison J. F. Riegels and Karsten Knudsen be re-elected to the Board of Directors.

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.

During 2012, the Board of Directors has built on the recommendations which appeared from the evaluation of its work,composition and interaction with the Executive Management, which was conducted in 2011 with impartial consultancy support. The evaluation found that the cooperation and interaction within the Board of Directors and with the Executive Management is very satisfactory.

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

In 2012, the Board of Directors held 14 meetings.

For 2013, 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 2013. 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 receives a supplement fee. Due to the extension of the Board of Directors, the total annual remuneration for the 9 board members has increased by approximately 9% to DKK 5,750,000 in 2012 or a total of just above USD 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.

  • In NORDEN, 2 of the shareholder-elected board members stand for election every year. NORDEN attaches great significance to ensuring necessary continuity.
  • It is recommended that the majority in a board committee be independent. However, NORDEN’s audit committee is made up of the entire Board of Directors as this committee’s deliberations are of such importance that no board member should be excluded from these, and the modest size of the Board of Directors also allows for a manageable handling of matters. The Chairman of the Board is also Chairman of the audit 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.
  • The work and performance of the Executive Management are assessed on an ongoing basis and always in connection with the annual negotiation with regard to remuneration of the Executive Management. A continuous dialogue on priorities, performance and results is deemed more important than some mechanical yearly criteria proposed in the recommendations.
  • NORDEN’s remuneration policy follows the recommendations with one exception: the Board of Directors has decided that the granting of possible cash bonuses to members of the Executive Board may be made discretionarily based on i.a. results, competitive environment, market situation and outlook as well as personal performance.
  • Severance payments to the Executive Management constitute 1 year’s salary, but in case of a merger/takeover an additional severance of 2 years’ salary may be provided. The recommendations prescribe a maximum of 2 years’ salary.
  • NORDEN does not disclose total 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.