This statutory report on corporate governance covers the period 1 January – 31 December 2017 and is pursuant to the Danish Financial Statements Act art. 107b. The report is part of the Management’s Review in the Annual Report for 2017. The report includes a description of DSV’s management structure, a description of the Group’s internal control and risk management systems in relation to the financial reporting process and DSV’s comments on the status with the Recommendations on Corporate Governance. The report is not covered by the auditors’ report prepared in connection with the Annual Report for 2017. Management structure Together, the Board of Directors and the Executive Board constitute the governing body of DSV. The ultimate authority rests with the shareholders in general meeting. The Board of Directors supervises and outlines the overall visions, strategies and objectives for the development of the Group’s business activities. The Executive Board is responsible for the day-to-day management and the execution of the strategy, and further more contributes essential input to the work of the Board of Directors. The Board of Directors has established audit, nomination and remuneration committees to perform various preparatory tasks relating to key areas of the Board’s work. The allocation of responsibilities between the Board of Directors and the Executive Board is laid down in the relevant Rules of Procedure. The individual Division Managers are responsible for the day-to-day operations of the Divisions supported by centralised Group functions. Board of Directors Composition The Board of Directors of DSV currently has six members (Directors). According to the Company’s Articles of Association, the Board of Directors must comprise at least five and not more than nine Directors. Directors are elected for a term of one year at a time, and new Directors are elected according to the applicable rules of the Danish Companies Act. The composition of the Board of Directors is intended to ensure the diversity of the Board’s competency profile and that the Board is able to perform its duties as effectively as possible. Reference is made to page 37 of the 2017 Annual Report for a description of the individual Directors’ skills and experience in relation to the work of the Board. Board meetings The Board of Directors held nine ordinary board meetings in 2017. The content of the meetings is partly determined by the annual cycle of the Board, thus ensuring that all important policies are reviewed. Besides the work laid down in the annual cycle, the Board also focused on the integration of UTi Worldwide Inc. Board of Directors self-evaluation Once a year, the Board of Directors performs an overall self-evaluation, which focuses on the results, composition and competencies of the Board as a whole. The Chairman of the Board is in charge of the self-evaluation process, which is driven by our Group Compliance department acting as an DSV A /S STATUTORY CORPOR ATE GOVERNANCE REPORT independent intermediary. When completed, the self-evaluation report is discussed by the Board. The result of the self-evaluation conducted in 2017 did not give rise to any significant considerations and supports the current composition of the Board. Independence of Board members According to the Danish Recommendations on Corporate Governance, four of the six members of the Board of Directors are regarded as independent. Kurt K. Larsen (Chairman) and Jørgen Møller were members of the Executive Board and Division Management, respectively, until joining the Board of Directors and are therefore not regarded as independent Board members as defined in the Recommendations. Board committees Audit committee The Audit Committee consists of three members, with expertise and experience in financial accounting. The overall tasks of the Audit committee are: • To monitor and report on the statutory audit and financial reporting processes including compliance with legislation, standards and regulations; • To monitor internal controls and risk management systems; • To monitor auditor independence and reporting, and to facilitate the auditor selection processes. The Committee held four meetings in 2017. Besides the work laid down in the annual cycle, the change of auditors, the integration of UTi, the adoption of new IFRS standards and other specific accounting matters were focus areas in 2017. The Rules of Procedure of the Audit Committee are available at investor. investor.dsv.com/policies.cfm Nomination committee The Nomination Committee consists of four members, who focus on ensuring an optimal composition of the Board of Directors and the Executive Board. The overall tasks of the Nomination committee are: • To define the competencies required of candidates for the Board of Directors and the Executive Board, including considerations on the balancing of skills, knowledge and experience of the two management bodies; • To evaluate once a year the structure, size, composition and performance of the Board of Directors and the Executive Board including the skills, knowledge and experience of the individual members; • To identify and suggest new candidates for the Board of Directors and the Executive Board. The Committee held two meetings in 2017, mainly focusing on the selfevaluation process of the Board of Directors, talent management and succession planning processes in DSV. The Rules of Procedure of the Nomination Committee are available at investor.dsv.com/policies.cfm Remuneration committee The Remuneration Committee consists of two members, who address the general remuneration policy of DSV. The overall tasks of the Remuneration committee are: • To make recommendations on DSV remuneration policies; • To make proposals on the remuneration of members of the Board of Directors and the Executive Board; • To ensure compliance with DSV remuneration policies for members of the Board of Directors and Executive Board. The Committee held two meetings in 2017, focusing among other issues on the implications of the European Union Shareholders Rights Directive for the DSV remuneration policies and reporting. 2
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