1. Recruitment and election of supervisory board members
It is recommended that the supervisory board ensure a formal, thorough and transparent process for selection and nomination of candidates with a view to ensuring a board composition that provides the competence needed to enable the supervisory board to perform its tasks in the best possible manner.
As a way to achieve this, it is recommended that:
• the supervisory board include a description of the nominated candidates’ background in the notice convening the general meeting when the election of the members to the supervisory board is on the agenda, and that such description include information about other managerial positions and directorships held by the candidates in both Danish and foreign companies as well as demanding organisational tasks performed by the individual persons.
• the recruitment criteria established by the supervisory board be stated, including the requirements for professional qualifications, international experience, etc., which, in the opinion of the supervisory board, represent essential qualities with regard to the supervisory board, and that the owners of the company are given an opportunity to discuss these criteria.
• every year, the supervisory board publishes a profile of its composition and provide information about any special competence possessed by the individual members that is important for the performance of their duties.
|
Complied with in part.
DLH-Fonden and the group of family shareholders both expect to nominate 1 or more candidates to the supervisory board. The supervisory board – including the chairman – is obliged to ensure that the composition and competencies of the board meet the company’s needs. The supervisory board highlights the qualifications of nominees to the board and any executive positions they may hold in other companies and important organisations in the notice convening the general meeting.
The supervisory board regards the informal internal evaluation as being sufficient to ensure the presence of the necessary competencies. The executive functions published reflect the competencies of the individual board members.
|
2. Training and introduction for members of thesupervisory board
It is recommended that new members joining the supervisory board be given an introduction to the company and that the chairman, in collaboration with each individual supervisory board member, decide whether it is necessary to offer the member in question relevant supplementary training.
It is recommended that every year, the supervisory board assess whether the competence and expertise of the members need to be updated in some respect.
|
Complied with in part.
Board members receive an introduction to their duties through a meeting with the chairman and the president & CEO. In addition, they may participate in relevant courses as the need arises.
The supervisory board regards it as sufficient that the individual members in consultation with the chairman assess the need for any development of competencies.
|
3. The number of supervisory board members
It is recommended that the supervisory board have only so many members as to allow a constructive debate and an effective decision-making process that enables all the members of the supervisory board to play an active role
and so that the size of the supervisory board allows the competence and experience of the supervisory board members to match the requirements of the company.
It is recommended that at regular intervals, the supervisory board considers whether the number of supervisory board members is appropriate in relation to the requirements of the company.
|
Complied with.
There are 7 board members elected by the shareholders at the general meeting. The articles of association allow for the election of 5-7 board members to be elected by the shareholders. The supervisory board finds the present number expedient.
|
4. The independence of the supervisory board
In order for the supervisory board members to act independently of special interests, it is recommended that at least half of the supervisory board members elected by the general meeting be independent persons. In this context, an independent supervisory board member elected by the general meeting may not:
• be an employee of the company or have been employed by the company within the past five years.
• be or have been a member of the executive board of the company.
• be a professional consultant to the company or be employed by, or have a financial interest in, a company which is a professional consultant to the company.
• have some other essential strategic interest in the company other than that of a shareholder.
Furthermore, any person related, in terms of business or in any other way, to the company’s major shareholder, is not regarded as an independent person.
Family ties with persons not regarded as independent persons also imply a situation of non-independence.
It is recommended that at least once a year, the supervisory board list the names of the members of the supervisory board who are not regarded as independent persons and also disclose whether new candidates for the supervisory board are considered independent persons and state the grounds for such consideration.
It is recommended that the members of the executive board of a company not be members of the supervisory board of the same company.
It is recommended that the annual report contain the following information about supervisory board members:
• occupation of the individual supervisory board member.
• other managerial positions or directorships held by the supervisory board member in Danish and foreign companies as well as demanding organisational tasks performed by that individual.
• number of shares, options and warrants held by the supervisory board member in the company and group enterprises as well as changes in the member’s portfolio of the mentioned securities having taken place during the financial year.
|
Complied with.
The majority of the members of the supervisory board elected by the shareholders, including the chairman, are deemed to be free of private interests. No members of the executive board sit on the supervisory board. Information on the members of the supervisory board is contained in the annual report as recommended.
The deputy chairman of the supervisory board is also a board member of the principal shareholder’s fund.
|
5. Supervisory board members elected by thestaff
It is recommended that the individual company consider the need to explain the system of staff-elected supervisory board members in the company’s annual report or on its website.
|
Complied with.
Employees in limited liability companies which employ at least 35 members of staff (Danish Companies Act, s. 49) are entitled to appoint a number of board members from among the employees corresponding to half the board members appointed by the general meeting. The term of office for board members elected by employees is 4 years.
|
6. Meeting frequency
It is recommended that the supervisory board meet at regular intervals according to a predetermined meeting and work schedule or when meetings are deemed necessary or appropriate as required by the company and that the annual
meeting frequency be published in the annual report.
|
Complied with.
The supervisory board normally holds 6 ordinary meetings a year plus one strategy meeting. The annual frequency of meetings is published in the annual report.
|
7. Time allocated to supervisory board work andthe number of directorships
It is recommended that a supervisory board member who is also a member of the executive board of an active company hold not more than three ordinary directorships or one chairmanship and one ordinary directorship in companies not forming part of the group unless in exceptional circumstances.
|
Complied with in part.
See page 17 of the 2005 annual report. Directorships in affiliated companies are not regarded as independent directorships.
|
8. Retirement age
It is recommended that the company agree on a retirement age for members of the supervisory board and that the annual report contain information about the age of the individual members of the supervisory board.
|
Complied with.
The annual report contains information on the ages of board members. The articles of association stipulate an age limit of 70.
|
9. Election period
It is recommended that members of the supervisory board be up for re-election every year at the general meeting and that the supervisory board in this connection makes special efforts to ensure the balance between replacement and continuity on the supervisory board as regards the chairmanship and the deputy chairmanship.
It is recommended that the annual report state when the individual member of the supervisory board joined the board, whether the member of the supervisory board was re-elected and when the new election period expires.
|
Complied with.
Board members are elected for one year at a time. There is no upper limit for the number of years for which a member may be re-elected. The annual report describes changes in the composition of the supervisory board, including board members joining and retiring. The supervisory board meets the recommendation of giving notification on changes in employment.
|
10. Use of supervisory board committees
It is recommended that the supervisory board consider and decide whether to establish committees, including nomination, remuneration and audit committees.
If the supervisory board appoints a committee, it is recommended that such appointment take place only in connection with matters relating to specific issues for the purpose of preparing decisions to be made by all the members of the supervisory board.
In the event of appointment of a supervisory board committee, it is recommended that the supervisory board draw up terms of reference for that committee setting out its responsibilities and powers.
It is recommended that the company’s annual report describe important issues included in the terms of reference of the individual supervisory board committee and that the annual report list the names of the members of the individual supervisory board committee as well as the number of meetings of that committee held during the financial year.
|
Complied with.
At present DLH do not consider the use of board committees relevant.
|
11. Assessment of the supervisory board’s work
It is recommended that the supervisory board establish an assessment procedure that regularly and systematically evaluates the work, results and composition of the supervisory board as well as the work and results of the individual members, including the chairman, for the purpose of improving the supervisory board’s work and that the criteria of assessment are clearly defined.
It is recommended that such assessment be made once a year, that the chairman of the supervisory board be in charge of this process, drawing on external support, if necessary, that the outcome be discussed by the entire supervisory board and that the supervisory board provide details of its procedures of self-assessment in the company’s annual report.
It is recommended that the supervisory board assess the executive board’s work and results once a year according to previously established explicit criteria.
It is recommended that the executive board and the supervisory board establish a procedure to assess the collaboration between the two boards at an annual meeting between the CEO and the chairman of the supervisory board and that the outcome of such assessment be presented to the entire supervisory board.
|
Complied with.
The supervisory board does not consider an actual, formal self-assessment procedure relevant. The work and the results of the executive board are assessed once a year by the chairman of the supervisory board based on already established criteria. Subsequently, the co-operation with the executive board is assessed and formally discussed by the executive board.
|