3 DSV Panalpina Statutory Report on Corporate Governance 2019 MANAGEMENT STRUCTURE Together, the Board of Directors and the Executive Board constitute the governing body of DSV Panalpina. 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 overall day-to-day management of the Group, execution of the strategies and objectives set, and furthermore 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 responsibilities. The allocation of responsibilities between the Board of Directors and the Executive Board is defined by the Rules of Procedure. Division Management is responsible for the day-to-day operations of the divisions supported by centralised Group functions. BOARD OF DIRECTORS COMPOSITION In accordance with 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. In 2019, Kurt K. Larsen retired from the Board and was replaced by Thomas Plenborg as new Chairman, with Jørgen Møller as new Deputy chairman. In addition, the Board has been expanded with two new members, Marie-Louise Aamund and Beat R. Walti, bringing the total number of Directors to seven. COMPETENCIES OF THE BOARD 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 effectively. Overboarding is also taken into consideration when considering the Board composition. Current competencies required of and possessed by the Board are knowledge of the transport sector, international commercial experience and experience in strategy, M&A, risk management, IT, human resources and accounting. In instances where specialised knowledge or insight is required in supporting the work of the Board, services may be obtained from external advisors or specialists. See page 40 in the annual report for a description of the individual Directors’ competencies and experience. BOARD OF DIRECTORS SELFEVALUATION Once a year, the Board of Directors performs an overall self-evaluation, focusing on the results, composition and competencies of the Board. In this regard, diversity, overboarding, internal management cooperation, succession planning and focus areas for the coming year are also considered. The Chairman of the Board is in charge of the self-evaluation process. When completed, the self-evaluation report is presented to and discussed by the Board. The result of the self-evaluation conducted in 2019 did not give rise to any significant remarks and validated the appropriateness of the member profiles elected for the Board. The current Board composition is considered to have the right competencies supporting the long-term value creation for our shareholders. INDEPENDENCE OF BOARD MEMBERS According to the Danish Recommendations on Corporate Governance, six of the seven members of the Board of Directors are regarded as independent. Jørgen Møller was a member of Division Management until joining the Board of Directors and is therefore not regarded as an independent Board member as defined by the Recommendations. BOARD MEETINGS The Board of Directors held eight ordinary and seven extraordinary board meetings in 2019. The content of the meetings is determined by the annual cycle of the Board, thus ensuring that the strategic and operational policy framework of the Group is reviewed and up to date. Besides the work laid down in the annual cycle, the work of the Board in 2019 mainly focused on the offer made to and acquisition of Panalpina Welttransport (Holding) AG and the subsequent integration of the two companies. 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; • to monitor compliance with applicable legislation, standards and regulations; • to monitor internal controls and risk management systems; • to monitor auditor independence, including the provision of non-audit services, and reporting, and to facilitate the auditor selection process;
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