NORDEN's corporate governance practice

In April 2010, the Danish Corporate Governance Committee issued revised recommendations on corporate governance. Companies are required to consider these recommendations and specifically explain areas in which their practice does not comply with the recommendations.

NORDEN complies with the vast majority of the recommendations, but has chosen a different and more suitable practice in the following areas:

• The board members’ directorships in Danish and foreign companies and foundations are disclosed, but the Board of Directors has chosen not to include a few directorships in personally owned companies that are considered insignificant.
• The recommendations set out a new definition of the independence of a board member. According to this new definition, 3 of NORDEN’s board members elected by the shareholders are no longer independent as they have close ties to a major shareholder and have been members of the Board of Directors for more than 12 years, respectively. NORDEN is of the opinion that it is a valuable asset to have a nucleus of members highly experienced in managing a growing and complex business in a special industry like shipping. To this should be added that there is an ongoing renewal of the Board of Directors: 2 of the board members elected by the shareholders and all board members elected by the employees are serving their first term of office.
• According to the recommendations, all board members elected by the shareholders should stand for re-election every year, but in NORDEN, the 2 board members elected by the shareholders with the longest term retire every year. This model ensures reasonable continuity.
• According to the recommendations, the Board of Directors should normally not perform the functions of the audit committee. NORDEN has decided that all members of the Board of Directors are members of the audit committee because matters such as financial conditions, risk, accounting policies and audit and accounting estimates are considered to be of such importance that they need to be discussed by the entire Board. To this should be added that the Board of Directors consists of relatively few members, and discussions about relevant matters may therefore easily be conducted by all members of the Board. Since the audit committee consists of the entire Board of Directors, it is only natural that the Chairman of the Board of Directors is also the Chairman of the audit committee, although this is not in compliance with the recommendations.
• According to the recommendations, companies should establish a nomination committee. NORDEN does not have a nomination committee. The Chairman of the Board is in charge of ongoing discussions being held to evaluate the structure, size, skills, knowledge and composition of the Board of Directors and decisions are made by the entire Board.
• According to the recommendations, performance criteria should be established for the variable component of the remuneration to the Board of Management. NORDEN has fixed criteria for the CEO but not for the CFO for whom bonuses are awarded at the discretion of the remuneration committee.
• Severance payments to the Board of Management may in case of ”change of control” (e.g. takeover or merger) constitute 3 years’ salary in total while the recommendation is 2 years.
• NORDEN does not disclose the remuneration of each member of the Board of Management and the Board of Directors as recommended, but instead the total amount of remuneration. NORDEN believes that what is important is that the shareholders are able to consider the total amount and development of remuneration.   

Download whitepaper on NORDEN’s corporate governance practice

Covering the financial year 2011:
pdf English. pdf Danish

Covering the financial year 2010:
pdf English. pdf Danish

Covering the financial year 2009:
pdf English. pdf Danish  

Whistleblowing system - SafeLine
Whistleblowing system named SafeLine is established by NORDEN/Norient Product Pool to encourage and safeguard the high standards and best practices within the Group.

 SafeLine