FAQ

Read about:

• Annual General Meeting
• Governance principles
• Internal controls
• Board of Directors
• Executive Board and Committee
• Compensation
• Reporting and audit
• Statutory provisions

General questions

1) Does Danske Bank follow the Corporate Governance Recommendations of the Copenhagen Stock Exchange?
Danske Bank follows almost all the recommendations of the Copenhagen Stock Exchange. For example, Danske Bank has chosen to explain concerning the time devoted to board meetings and the number of directorships as well as the term of office. Read specifical "comply-or-explain" responses to the recommendations.
"Comply-or-explain"

2) Does Danske Bank prepare a corporate governance fact sheet?
Yes. The fact sheet presents an overview of the corporate governance principles at the Danske Bank Group. Download fact sheet.Fact sheet(PDF 256 KB)

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Annual General Meeting

3) What are the decision-making powers of the annual general meeting?
The annual general meeting is the ultimate decision-making body of the Danske Bank Group. A number of items must appear on the agenda of the annual general meeting including submission of the annual report for adoption and appointment of external auditors.
Annual general meeting
4) What rules apply at the annual general meeting?
The annual general meeting is held every year after the Group has presented its annual report. All shareholders have equal rights to attend, speak, make proposals and vote. Each share entitles the holder to one vote at the general meeting. The Danske Bank Group has not adopted limits on ownership and voting rights.
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5) What formalities must apply in regards to proposals of business to be dealt with by the general meeting?
All shareholders may propose business to be dealt with by the general meeting. Proposals regarding the standing items on the agenda may be submitted at the general meeting. New business and proposals must be submitted to the Board of Directors in writing by February 1.

6) May shareholders be represented by proxy at the general meeting?
A shareholder has the right to appoint a proxy for the general meeting. The proxy must be written, and can only be made valid for up to a year at a time.

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Governance principles

7) What are the principles behind the management of the Danske Bank Group?
As a Danish public company, the Danske Bank Group has a two-tier executive management structure. The Board of Directors sets forth the general principles for Danske Bank's affairs and is responsible for the overall organisation of the Group. The Executive Board is responsible for the day-to-day management of the Group and follows the guidelines and instructions set forth by the Board of Directors. No executive officers in the Danske Bank Group serve on the Board of Directors of the parent company.
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8) What role does the Articles of Association play in relation to law and regulations?
Danish Company law and the articles of association constitute the basis for the activities of Danske Bank. The articles must comply with the provisions of the Danish Companies Act. Read more

9) Has Danske Bank taken precautions against hostile takeovers?
The Danske Bank Group does not have share classes and has not adopted limits on ownership and voting rights. Most of the Danske Bank shares are traded freely in the market. A resolution proposing the dissolution of Danske Bank through a merger is subject to a majority of three-fourths of the votes.

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Internal controls

10) What are the principles behind the Danske Bank Group's risk and capital management?
The Board of Directors sets out the general policies and limits for credit, market and operational risk. The Board also lays down the general rules for managing and monitoring risk.

On the basis of the general risk policies, operational risk policies are prepared for the business areas. These policies also apply to units outside Denmark and subsidiaries.

The operational risk policies form the basis for the written business procedures and for reconciliation and control procedures. They also form the basis for the Group's system development work.

Within the limits set, the managements of the individual business areas are responsible for the risks undertaken by the areas and for active management of these risks.

The Danske Bank Group's capital management aims to ensure efficient use of capital to meet the Group's overall capital targets. The Group's risk profile complies with the capital targets and implies, among other things, that the Group must have sufficient capital to cover both organic growth and current fluctuations in the Group's exposure.

A separate Web site details the risk and capital management of the Group.
Web site
11) How does Danske Bank's financial management work?
The Danske Bank Group aims to match best practices in financial management. The Group's financial management is currently based on risk-adjusted performance measurement, Balanced Scorecard, Activity Based Costing and Service Level Agreements. Read more
12) What is the role of the Danske Bank Group's internal Audit Department?
One of the duties of the Internal Audit Department is to evaluate the risks in the individual audit areas in the Group. The Internal Audit Department's work must be organised in such a way that material irregularities are discovered as quickly as possible. The division of labour between the external auditor and the Internal Audit Department is arranged so that the Internal Audit Department conducts an audit and the external auditor ensures that the work is planned, executed, documented and reported as agreed upon.

In the annual report, the Internal Audit Department states among other things that business procedures, internal control procedures and risk management measures function satisfactorily.
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13) How does Danske Bank ensure compliance with the insider rules?
The Danske Bank Group has clear guidelines for the treatment of inside information and the execution of equity trades. For example, the Group has set up an insider register of relevant persons and established so-called "Chinese Walls".
Read more
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Board of Directors

14) How many members are on the Board of Directors of Danske Bank, and how long is their term of office?
Danske Bank's Board of Directors has fifteen members. Ten are elected by the general meeting and the remaining five are employee representatives.
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Members of the Board of Directors of Danske Bank are elected by the general meeting for a two-year term. Half the members of the Board of Directors elected by the general meeting are up for election every year. According to the law, employee representatives are elected for four-year terms.
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15) What are the decision-making powers of the Board of Directors?
According to the Group's two-tier executive management structure, the Board of Directors sets the general principles for Danske Bank's affairs. The Board is responsible for ensuring that the Group's organisation is sound and in this capacity appoints the Executive Board, the Group Chief Auditor, the Deputy Group Chief Auditor and the Secretary to the Board of Directors.
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Danske Bank's "Rules of procedure for the Board of Directors and the Executive Board" lays down rules for the responsibilities of the Board of Directors and the Executive Board and for the division of responsibilities between them.
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The Board of Directors of Danske Bank lays down the overall risk policy and guidelines for risk management. For example, it determines the general principles for managing and monitoring risks. The Board of Directors is kept informed of material elements of risk management, such as rating systems and underlying parameters for risk management models.
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16) Who takes part in the meetings of the Board of Directors?
As a general rule, the members of the Executive Board attend meetings of the Board of Directors. The external auditors and the group chief auditor are entitled to attend meetings of the Board of Directors when the Board considers matters of importance to the audit or to the preparation of accounts.
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17) How many independent members does the Board of Directors have?
All members of the Board of Directors elected by the shareholders at the general meeting are considered independent.

18) How are candidates for Danske Bank's Board of Directors nominated?
In Danske Bank, new members of the Board of Directors may be nominated by any shareholder or by the Board of Directors itself. Before any annual general meeting, any shareholder may make a proposal to replace board members who are not up for re-election.
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A special nomination committee identifies potential candidates and recommends them to the Board of Directors for nomination for election by the general meeting.
Charter of the committee
19) How is the performance of the Board of Directors evaluated?
At Danske Bank the Chairman of the Board of Directors is responsible for undertaking an ongoing evaluation of the Board of Directors and the Executive Board.
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20) What committees have been set up by the Board of Directors?
The Board has appointed four committees that monitor special areas or prepare cases that are afterwards treated by the entire Board including audit, credit, salary, and bonus and nomination committees.
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21) Have clear charters been set for the committees of the Board of Directors?
Yes. The work of all committees is based upon clearly defined charters and purposes. Read their charters
22) What is the role of the employee representatives?
Legislation gives employee representatives the same rights, duties and responsibilities as the other Board members.
Employee representatives
23) What is the distribution of responsibilities between the Board of Directors and the Executive Board?
Danske Bank's "Rules of procedure for the Board of Directors and the Executive Board" lays down rules for the responsibilities of the Board of Directors and the Executive Board and for the division of responsibilities between them.
Read more
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Executive Board and Committee

24) Who are the members of the Executive Board of Danske Bank?
The Executive Board is chaired by a chairman appointed by the Board of Directors and given the title of chairman of the Executive Board and chief executive officer. Currently, the Executive Board consists of five members and is chaired by Peter Straarup.
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25) Who are the members of the Executive Committee of Danske Bank, and what is the role of the committee?
The Executive Committee is made up of fourteen executive managers representing the Group's business and ressource areas. The Committee constitutes the day-to-day executive management and is a co-ordinating forum. Its objective is to take an overall view of activities across the Group, focusing on the collaboration between support functions and product suppliers on the one hand and divisions and individual country organisations on the other.
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26) Who appoints the Executive Board?
The Board of Directors appoints the Executive Board.
Board of Directors

Executive Board
27) What are the decision-making powers of the Executive Board?
The Executive Board carries out the day-to-day management and is authorised to make decisions in matters pertaining thereto, with the exception of matters that, according to the Rules of Procedure, fall under the authority of the Board of Directors. Business of an unusual nature or of material importance must always be submitted to the Board of Directors.

In addition to the day-to-day management of the Bank, the Executive Board is responsible in particular for regularly monitoring trends in the Group's market situation in order to lay down strategies and propose new strategies or changes to existing strategies to the Board of Directors as needed.
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Compensation

28) Which general principles apply to the remuneration of the Board of Directors and the Executive Board?
The remuneration policy for the Board of Directors and Executive Board reflects the objectives of a sound governance process and long-term value creation for the Group's shareholders.
Read the entire policy
29) How is the Board of Directors remunerated, and who determines the fee?
Danske Bank's directors receive a fixed fee and are not covered by any type of incentive- or performance-based remuneration. The remuneration of the Board of Directors is subject to approval by the general meeting on the latter's consideration of the annual report.

The actual remuneration of members of Danske Bank's Board of Directors is disclosed in the annual financial accounts and also on the Corporate Governance Web site.
Board of Directors remuneration
30) How is the Executive Board remunerated, and who determines the remuneration?
Executive Board members are employed on a contractual basis. Their remuneration is subject to annual reassessment. The elements of the Executive Board's total remuneration are combined on the basis of market practice and the Group's specific requirements. The Executive Board's remuneration consists of salary and bonus, share options, conditional shares and pension.

The actual remuneration of members of Danske Bank's Executive Board is based on the annual financial results and is also disclosed on the Corporate Governance Web site.
Executive Board remuneration
31) What incentive programmes are used by the Danske Bank Group and what criteria form the basis for the allocation of performance-based compensation?
The Group's incentive programmes for management and staff build on value creation within the Group and include share options, rights to purchase conditional shares, employee shares and cash bonuses. The Group's incentive programmes are based on value creation in the organisation. Incentive payments reflect individual performance and also depend on financial results, customer development and other measures of value creation.
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Reporting and audit

32) What sets of rules governs the Danske Bank Group's financial reporting?
Danske Bank Group publishes an annual report and three interim reports according to International Financial Reporting Standards (IFRS). In addition, Danske Bank prepares accounts for its various business units. The accounts for the parent company are prepared according to the principles of the Danish Financial Supervisory Authority.

The Board of Directors has also adopted an information policy, a CR policy and an Investor Relations policy.
Information policy

CR policy

Investor Relations policy
33) Who appoints the auditors of the Danske Bank Group?
According to Danish law, external auditors are appointed by the general meeting.
External auditors

General meeting

34) Does the executive management guarantee and is it liable to the correctness of the financial accounts?
Yes. Danske Bank's annual report is signed by the Board of Directors and the Executive Board in addition to the external and internal auditors.
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35) What are the guidelines for the performance of audits?
The audit must be performed in accordance with good auditing practices and must include a critical review of the individual companies' accounting materials and their conditions in general.

The external auditor has overall responsibility for the audit review. The external auditor assesses the quality of the internal auditor's work on the basis of an evaluation of significance and risk for the individual areas. In addition, the external auditor evaluates the independence of the internal auditor.
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Danske Bank's Board of Directors has established an Audit Committee, which reviews accounting, auditing and security issues that the Board itself has chosen and that the external auditor or Head of Internal Auditing may propose for investigation. The Committee reports to the Board of Directors, and its function is preparatory only.
Read charter
36) What is the distribution of responsibilities between internal audit and external audit?
The division of labour between the external auditor and the Audit Department is arranged so that the Audit Department conducts an audit and the external auditor ensures that the work is planned, executed, documented and reported as agreed upon.

In accordance with Danish law, Danske Bank has prepared a written functional description and an auditing agreement for its audit department. The functional description sets the scope and duties of the Audit Department, while the audit agreement gives guidelines for both internal and external auditing duties and the collaboration between the two units. Read more
37) May the external auditors perform non-audit services?
According to applicable rules, the auditor's field of activity is limited to the auditing of accounts and supplementary reports and advisory services and assistance related to this and similar areas. Thus, Danske Bank's external auditors perform few non-auditing services to the Group.
External auditors
38) How long may the same auditor issue an opinion on the Danske Bank-Groups annual report?
According to current rules, Danske Bank's external auditors must be replaced at least every seven years.
External auditors
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Statutory provision

39) What legislation affects the Danske Bank Group's governance structures?
The Danske Bank Group is a public limited company, which means that special requirements apply to the management structure, the influence of the shareholders and the protection of minority owners, among other things.

As a financial enterprise, the Group is also subject to other regulations, including specific requirements for governing bodies, internal controls and regular reporting to the Danish Financial Supervisory Authority, among other things.
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40) What governance standards are relevant to the Danske Bank Group?
The Danske Bank Group is managed in accordance with Danish statutory provisions. The Group's corporate governance must therefore be understood in the framework of that legislation including the Copenhagen Stock Exchange's Recommendations for Corporate Governance. The international ownership structure of Danske Bank means that among others Sarbanes-Oxley and Combined Code are also relevant to the Group as a global standard for corporate governance.

Read "comply-or-explain" as to the recommendations of Copenhagen Stock Exchange and view a comparison of selected aspects of Sarbanes-Oxley and Combined Code with Danish legislation and Danske Bank's practice.
"Comply-or-explain"

Comparison
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Last updated/revised on April 29, 2008