Beginning in 2006, Danske Bank will include a statement in its annual report on how it addresses the Recommendations for corporate governance developed by the Copenhagen Stock Exchange Committee (Now OMX) on Corporate Governance.
In this section Danske Bank addresses the Recommendations, which are divided into eight main areas:
The Committee has been set up by the Board of Directors of the Copenhagen Stock Exchange (OMX). The recommendations form an integral part of the disclosure requirements for issuers of shares listed on the exchange.
The Committee has revised the Recommendations for Corporate Governance published by the so-called Nørby Committee in December 2001. Danske Bank must apply the "comply-or-explain" principle when addressing the Recommendations.
The aspects covered by the Recommendations are to a certain extent governed by the disclosure requirements that apply to listed companies in Denmark.
The Recommendations shall generally be considered supplementary.
The Recommendations shall also be considered parallel to the provisions of the Danish Companies Act regarding governance.
Recommendations on the role of shareholders and their interaction with company management
I.1: The Committee recommends that the companies contribute to improving the communication between the company and the shareholders, and between the individual shareholders in the company via the use of e.g. information technology.
Capital and share structures
I.2: The Committee recommends that the supervisory board, at appropriate intervals, assess whether the company's capital and share structures continue to be in the interests of the shareholders and the company and that the supervisory board account for this assessment in the company's annual report.
Preparations for the general meeting, including notice of meeting and proxy
I.3: The Committee recommends that the general meeting be called at sufficient notice to enable the shareholders to prepare for the meeting and consider the business to be transacted at the general meeting that the notice of meeting, including the agenda, be drawn up in such a way as to give the shareholders a satisfactory picture of the business covered by the items on the agenda and that proxies given to a company's supervisory board, as far as possible, include the position of the shareholders regarding each item on the agenda.
The duties of the supervisory board and the rights of the shareholders in the event of takeover bids
I.4: In connection with a public takeover bid, the Committee recommends that in such situations, the supervisory board does not, without the acceptance of the general meeting or on its own, attempt to counter a takeover bid by making decisions which in reality prevent the shareholders from deciding on the takeover bid.
Danske Bank
Danske Bank complies with the recommendations on the role of the shareholders and their interaction with the management of the company.
Danske Bank complies with the recommendations on the role of the shareholders and their interaction with the management of the company.
Read more about Danske Bank's capital management, IR policy, information policy and about the general meeting of the Danske Bank Group.
Capital management
IR policy
Information policy
General meeting
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Recommendations on the role of the stakeholders and their importance to the company
II.1: The Committee recommends that the supervisory board adopt a policy on the company's relationship with its stakeholders.
II.2: The Committee recommends that the supervisory board ensure that the interests and roles of the stakeholders are respected in accordance with the company's policy on such issues.
Danske bank
Danske Bank complies with the recommendations on the role of the stakeholders and their importance to the company.
Read the Group's CSR policy.
CSR policy
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Recommendations on openness and transparency
III.1: The Committee recommends that the supervisory board adopt an information and communication policy.
Furthermore, the Committee recommends that the company draw up procedures to ensure immediate publication of all essential information of importance for how the shareholders and the financial markets evaluate the company and its activities as well as its business goals, strategies and results in a reliable and sufficient manner unless publication can be omitted according to stock exchange legal rules.
The Committee recommends that information be published in both Danish and English, and, if necessary, in any other relevant languages; this also applies to the company's website, which must display identical information in these languages.
III.2: The Committee recommends that the supervisory board lays the groundwork for an ongoing dialogue between the company and the company's shareholders and potential shareholders.
Annual report
III.3: The Committee recommends that the supervisory board consider to what extent generally accepted accounting standards other than those required, such as US-GAAP, shall be applied as a supplement to the annual report if trade conditions or other circumstances make this relevant in relation to the information needs of the recipients, including the need for comparability.
In connection with the preparation of the annual report, the Committee recommends that the supervisory board decide whether it is expedient that the company publishes details of a non-financial nature, even in instances where this is not required by any applicable legislation or standards.
III.4: The Committee recommends that companies publish quarterly reports.
Danske Bank
Danske Bank complies with the recommendations on openness and transparency.
Read the Group's IR policy, information policy or more about the group's reporting and audit.
IR policy
Information policy
Reporting and audit
Go to the Investor Relations site.
Investor Relations
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Recommendations on the tasks and responsibilities of the supervisory board
IV.1: The Committee recommends that the supervisory board discuss and establish its most important tasks related to the overall strategic management as well as the financial and managerial supervision of the company and regularly evaluate the executive board's work.
The tasks of the chairman
IV.2: The Committee recommends that the company prepare a work and task description specifying the tasks, duties and responsibilities of the chairman, and of the deputy chairman, if required.
The Committee recommends that the chairman ensure that the special knowledge and competence of each individual member of the supervisory board are used in the best possible manner in the supervisory board's work to the benefit of the company.
The Committee recommends that the company appoint a deputy chairman, who must be able to act in the chairman's absence and also to act as an effective sounding board for the chairman.
Procedures
IV.3: The Committee recommends that the procedures always match the needs of the individual company and that all the members of the supervisory board review the procedures at least once a year for this purpose.
Information from the executive board to the supervisory board
IV.4: The Committee recommends that the supervisory board establish procedures for how the executive board reports to the supervisory board and for any other communication between the supervisory board and the executive board with a view to ensuring that such information about the company's business as required by the supervisory board is regularly provided to the supervisory board.
Danske Bank
Danske Bank complies with the recommendations on the tasks and responsibilities of the supervisory board.
Read more about the Board of Directors of Danske Bank, including the rules of procedure for the Board of Directors and the Executive Board.
Board of Directors
Rules of procedure
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 including the compentences of the members.
Evaluation
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Recommendations on the composition of the supervisory board
The recommendations on the composition of the supervisory board are divided into a number of subsections:
With very few exceptions Danske Bank complies with all of the recommendations on the composition of the supervisory board. The Bank has decided to explain regarding the recommendations on time allocated to supervisory board work and election period.
Recruitment and election of supervisory board membersV.1: The Committee recommends 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, the Committee recommends 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.
- that 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.
- that 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.
Training and introduction for members of the supervisory boardV.2: The Committee recommends 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.
The Committee recommends that every year, the supervisory board assess whether the competence and expertise of the members need to be updated in some respect.
The number of supervisory board membersV.3: The Commission recommends 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.
The Commission recommends 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.
The independence of the supervisory boardV.4: In order for the supervisory board members to act independently of special interests, the Committee recommends that at least half of the supervisory board members elected by the general meeting be independent persons.
The Committee recommends that 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.
The Committee recommends that the members of the executive board of a company not be members of the supervisory board of the same company.
The Committee recommends 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.
Supervisory board members elected by the staff
V.5:The Committee recommends 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.
Meeting frequencyV.6: The Committee recommends 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.
Time allocated to supervisory board work and the number of directorshipsV.7: The Committee recommends 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.
Retirement age
V.8: The Committee recommends 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.
Election periodV.9: The Committee recommends 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.
The Committee recommends 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.
Use of supervisory board committeesV.10: The Committee recommends that the supervisory board consider and decide whether to establish committees, including nomination, remuneration and audit committees.
If the supervisory board appoints a committee, the Committee recommends 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, the Committee recommends the supervisory board draw up terms of reference for that committee setting out its responsibilities and powers.
The Committee recommends 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.
Assessment of the supervisory board's work
V.11: The Committee recommends 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.
The Committee recommends 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.
The Committee recommends that the supervisory board assess the executive board's work and results once year according to previously established explicit criteria.
The Committee recommends 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.
Danske Bank
With very few exceptions Danske Bank complies with all of these recommendations.
Read about the committee structure of the Board of Directors including the charter for the Nomination Committee, which assists the Board of Directors with the nomination of candidates for the Board of Directors.
Committee structureRead an extensive selection of the rules and procedures of the Board of Directors and the Executive Board.
Rules and proceduresSome of the Group's Directors hold more directorships than what is recommended by the Corporate Governance Committee. However, Danske Bank does not find a simple count of directorships useful as the workload varies from company to company.
Read more about the members of the Board of Directors. All members are considered independent except members nominated by the Bank's staff.
Members of the Board of DirectorsMembers 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. Read more about the nomination and election of Board members.
Nomination and electionAt 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.
Evaluation Back to top Recommendations on remuneration of the members of the supervisory board and the executive boardThe recommendations on the remuneration of the members of the supervisory board and the executive board are divided into a number of subsections:
Danske Bank complies with these recommendations.
Read moreRemunerationVI.1: The Committee recommends that the total remuneration (basic pay, bonus, price-related incentive schemes, pension schemes, severance pay and other benefits) be at a competitive and fair level, reflecting the independent performance and value creation in the company of the members of the executive board and the supervisory board.
Remuneration policyVI.2: The Committee recommends that the supervisory board adopt a remuneration policy and that the company disclose the contents of such policy in its annual report.
The Committee recommends that the remuneration policy reflect the interests of the shareholders and the company, match the specific conditions of the company and be reasonable in relation to the tasks and responsibilities of the members of the executive board and the supervisory board and that it promotes long-term behaviour and is transparent and easy to understand.
The Committee recommends that the remuneration policy include a statement explaining basic pay, the basis on which bonus is calculated, price-related incentive schemes, pension schemes and other benefits as well as the relationship between basic pay and such benefits.
The Committee recommends that the company's remuneration policy reporting include a statement explaining how such policy was implemented in the past financial year, how such policy is implemented in the current financial year and how the company plans to implement it in the next financial year.
The Committee recommends the company's remuneration policy be mentioned in the statement given by the chairman at the company's general meeting and that the remuneration of the supervisory board for the current financial year be presented for adoption at the general meeting when the annual report for the previous year is submitted for adoption.
Openness about remunerationVI.3: The Committee recommends that the annual report include information about the amounts of total remuneration of the individual members of the supervisory board and the executive board as well as other benefits of a material nature provided or granted to such members by the company or other companies within the same group.
In respect of defined-contribution pension schemes the Committee recommends that details be provided for contributions made or to be made by the company for an executive in the relevant financial year and for defined-benefit pension schemes that details be provided for changes in benefits saved for the individual during the relevant financial year.
Principles for establishing incentive schemes
VI.4: The Committee recommends that as part of the company's remuneration policy, the supervisory board lays down principles and guidelines governing the design of incentive schemes for the company's executive board and supervisory board and that they reflect the interests of the shareholders and the company, match the specific conditions of the company and are reasonable in relation to the tasks and responsibilities of the members of the executive board and the supervisory board.
The Committee recommends that remuneration to the supervisory board not consist of share option schemes, but e.g. bonus schemes and shares at market price and that it be the general meeting that passes resolutions regarding incentive schemes for the supervisory board.
If the remuneration of the members of the executive board consists of share or subscription options, the Committee recommends that the schemes be set up as roll-over schemes (i.e. options are allocated and expire over a number of years) and that the redemption price be higher than the market price at the time of allocation.
Moreover, the Committee recommends that the schemes be designed in a way that promotes long-term behaviour and are transparent and easy to understand (even for outsiders) and that valuation be made according to generally accepted methods.
Information about the introduction of incentive schemes
VI.5: The Committee recommends that the notice convening a general meeting to consider the introduction of subscription options or any other share-based incentive scheme include an easy-to-understand statement for the shareholders explaining such decision and that the statement include information about the most important terms and conditions of the scheme and list the names of the members of the supervisory board and the executive board participating in the scheme.
Severance schemes for the members of the executive board
VI.6: The Committee recommends that information about the most important aspects of severance schemes be disclosed in the company's annual report.
Danske BankDanske Bank complies with all of the recommendations on the remuneration of the members of the supervisory board and the executive board.
Read the Group's remuneration policy for Board of Directors and Executive Board.
Remuneration policy
Information on the remuneration and salaries of the individual directors and the members of the Executive Board is available on the site. Read more about the remuneration of the Board of Directors and the Executive Board and see their individual shareholdings.
Board of Directors
Executive Board
Read more about the Group's incentive schemes for management and staff. The Board of Directors is not included in the Group's incentive programmes.
Incentive schemes
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Recommendations on risk management
VII.1: The Committee recommends that the supervisory board and the executive board, when formulating the company's strategy and overall goals, identify the greatest business risks involved in achieving such strategy and goals.
VII.2: The Committee recommends that the executive board prepare a plan for the company's risk management on the basis of the risks identified and submit this plan to the supervisory board for approval, and that the executive board regularly report to the supervisory board to allow the latter to systematically follow the trends in significant risk areas.
VII.3: The Committee recommends that the company's annual report include information about the company's risk management activities.
Danske Bank
The risk management and risk reporting of Danske Bank comply with the recommendations.
A separate Web site details the Group's risk and capital management policies and practices.
Risk and capital management
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Recommendations on audit
VIII.1: The Committee recommends that having consulted the executive board, the supervisory board make a specific and critical assessment of the auditor's independence and competence, etc., to be used in connection with the nomination of a candidate at the general meeting.
VIII.2: The Committee recommends that the auditor agreement and the auditor's fee be agreed between the company's supervisory board and the auditor.
VIII.3: The Committee recommends that every year, the supervisory board lay down the overall, general scope of the auditor's provision of non-audit services with a view to ensuring the auditor's independence, etc.
Internal control systems
VIII.4: The Committee recommends that at least once a year, the supervisory board review and assess the internal control systems within the company as well as the management's guidelines for and supervision of such systems and that the supervisory board consider the extent to which this function is able to assist the supervisory board in this work.
Accounting policies and accounting estimates
VIII.5: When the supervisory board reviews the annual report (or a draft of it) together with the auditor, the Committee recommends that particular efforts be made to discuss the accounting policies applied in the most important areas as well as important accounting estimates and that the expediency of the accounting policies applied be assessed.
Result of the audit
VIII.6: The Committee recommends that the result of the audit be discussed at meetings with the supervisory board for the purpose of reviewing the auditor's observations and opinion, possibly on the basis of the long-form audit report.
Audit committee
VIII.7: In companies with complex accounting and audit conditions, the Committee recommends that the supervisory board consider establishing an audit committee to assist the supervisory board in accounting and audit matters.
Danske Bank
Danske Bank complies with the recommendations on auditing.
Read more about the Group's internal controls.
Internal control
Danske Bank discloses the extent of non-audit services in the annual report, and the Audit Committee examines the general framework for the external Auditor's non-audit services. Consequently, there is no additional need to formalise the cooperation with the Group auditors.
Read more about internal audit, the Audit Committee of the Board of Directors and external audit.
Internal audit
Audit Committee
External audit
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