Corporate Governance
Pursuant to Section 36 of the Disclosure Requirements for issuers
of shares listed on OMX Nordic Exchange Copenhagen, Danish
companies must in their Annual Report explain how they will
address the recommendations of the OMX Nordic Exchange
Copenhagen for corporate governance based on the ‘comply or
explain’ principle.
In general, the FLSmidth Group complies with the recommendations
for corporate governance, however with a few exceptions
as described in the following account of the management of the
FLSmidth Group.
1. Shareholders’ role and interaction with
Board and Management
General Meeting
According to the Articles of Association, a notice convening the
general meeting including the agenda of the meeting must be
issued at least eight days and not more than four weeks prior
to the meeting. A complete agenda including explanation of
the business to be transacted must be available at least eight
days before the general meeting at the Company’s address. In
order to be considered at the Annual General Meeting, business
proposed by shareholders must be submitted to the Board of
Directors in writing by 1 March of the year in question.
Investor meetings
After the quarterly interim reports are released, investor meetings
and telephone conferences are held at which all stakeholders
may ask questions direct to the Corporate Management. In
addition, it is possible to contact the Corporate Management
and Board of Directors via the Shareholders secretariat and the
Investor Relations function whose purpose is to maintain an
ongoing dialogue between the Company and its present and
potential shareholders.
Capital and share structure
FLSmidth & Co. A/S has been listed on the OMX Nordic Exchange
Copenhagen since 1968. The share capital amounts to
DKK 1,064,000,000 consisting of 53,200,000 issued shares at
DKK 20 each. There is only one class of shares.
2. Stakeholders’ role and significance
to the company
As to the role of the stakeholders and their significance to the
company, please see the chapter ‘Stakeholder relations’ on
pages 44-47.
3. Openness and transparency
Disclosure of information
The full wording of FLSmidth & Co. A/S’s public relations policy
is available at the Company website www.flsmidth.com. In accordance
with the policy, procedures have been drawn up for
the timely disclosure of all important information pursuant to the
Stock Exchange rules. All company announcements are published
and distributed in both Danish and English (translation) by the
Hugin news distribution service and appear simultaneously on
the company website www.flsmidth.com.
Interim reports and the 2007 Annual Report are presented in
accordance with the International Financial Reporting Standards
(IFRS) issued by the International Accounting Standards Board
and in accordance with the guidelines fixed by OMX Nordic
Exchange Copenhagen for the financial statements of listed
companies.
4. Duties and responsibilities of the Board
of Directors
According to general practice in Denmark, FLSmidth & Co. A/S
maintains a clear division of responsibility and separation between
Board and Management. Tasks and responsibilities are laid
down at an overall level via rules of procedure for the Board of
Directors and a set of instructions from the Board to the Management.
There is no other specific description of the duties and
tasks of the Chairman and the Vice Chairman.
The Management is responsible for the day-to-day business of the
Company, whilst the Board of Directors oversees the Management and handles
overall managerial issues of a strategic nature. The Chairman is
the Board of Directors’ primary liaison with the Management.
Apart from the Remuneration Committee mentioned below,
no other independent Board committees have been set up.
The Board of Directors generally meets in ordinary sessions six to
eight times a year and additional meetings are held on an ad
hoc basis. Immediately after the Annual General Meeting the
Board of Directors elects from its own number a Chairman and a
Deputy Chairman.
No formalised structure exists for self-evaluation
of the Board of Directors. The Chairman from time to time
evaluates the work of the Board of Directors.
5. Composition of the Board of Directors
The Board of Directors consists of experienced business executives
who each bring with them insight and hands-on experience
that match the challenges and practical issues currently
facing the Group.
Information about the positions held by the individual members
of the Management and Board of Directors is available on pages
18-19. Of the six members elected at the General Meeting
for a period of one year, one is not independent. This is Board
member Søren Vinther, who has been in the Company’s employ
within the past five years. The retirement age is 70 years. Pursuant
to Danish legislation, the Group’s employees are represented
on the Board of Directors by members elected for four years.
6. Remuneration of the Management and the
Board of Directors
The Board has set up a Remuneration Committee to handle negotiations
of pay to the Management and Board. The members
of the committee appear from page 18.
Information regarding the Management’s and the Board’s holding
of shares and share options in FLSmidth & Co. appears from
the chapter on Shareholder information on pages 48-50. Adequate
information about the remuneration of the Management
also appears from Notes 7 and 36 to the consolidated accounts
in the Annual Report.
Since 2002 the Board of Directors has not participated in incentive
programmes and has therefore no share options. Information
regarding the individual Board members’ holdings of shares
in FLSmidth & Co. appear from page 18.
7. Risk management
For further details on commercial and financial risks, please
see the section on Risk Management in this Annual Report on
pages 38-39.
8. Auditors
The auditors are appointed at the General Meeting based on the
recommendations of the Board of Directors. The auditor’s fee is
approved by the Board of Directors.th the guidelines fixed by OMX Nordic
Exchange Copenhagen for the financial statements of listed
companies.