Corporate Governance
Corporate governance in Auriga Industries A/S
Content
1. Role of shareholders and interaction with the management of the company
2. Role of stakeholders and their importance to the company
3. Openness and transparency
4. Tasks and responsibilities of the Board of Directors
5. Composition of the Board of Directors
6. Remuneration to the Board of Directors and the Board of Executives
7. Risk management
8. Audit
The Board of Directors sees it as its most important task to look after the long-term interests of Auriga, and thereby of the shareholders. The guidelines for the overall management of Auriga are based on the articles of association, objectives, strategy and values and on the corporate governance principles laid down in, for example, legislation, best practice and recommendations.
The recommendations for good corporate governance form part of the code of conduct for companies listed on OMX Nordic Exchange in Copenhagen. The company must adhere to the recommendations adopted on the basis of the “comply-or-explain” principle.
Auriga generally complies with the OMX recommendations for good corporate governance, but has nevertheless chosen a different practice in a few areas, as described below.
The statement can also be found in the annual report 2007.
Board of Directors
The Board of Directors in Auriga is composed of six members elected by the general meeting (g) and three employee representatives (e):
Ole Steen Andersen, Chairman (g)
Povl Krogsgaard-Larsen, Deputy Chairman (g)
Gunnar Krarup Andersen (e)
Kenneth Bro (e)
Torben Skriver Frandsen (g)
Johannes Jacobsen (g)
Karl Anker Jørgensen (g)
Jan Stranges (g)
Jørn Sand Tofting (e)
Board of Executives
The day-to-day management in Auriga is undertaken by a Board of Executives with two members:
Bjørn Albinus, President and CEO in Auriga
Kurt Pedersen Kaalund, President and CEO in Cheminova and registered Vice President in Auriga.
The rules of procedure prepared for the Board of Directors and the Board of Executives lay down detailed guidelines for their activities and duties, it being noted that no members are members of both boards.
Capital and share structure
The Board of Directors at regular intervals assesses the expediency of the company’s capital and share structures. Auriga has two share classes, Class A shares with a nominal value of DKK 75 million, and Class B shares with a nominal value of DKK 180 million, where each Class A share carries ten votes, while each Class B share carries one vote. The Class B shares are listed on OMX, Nordic Exchange, Copenhagen, while the Class A shares are non-negotiable. According to the charter of the Aarhus University Research Foundation, the foundation must hold all Class A shares and at least 51 per cent of the votes in Auriga. In the opinion of the Board of Directors and the management, the existing share structure is expedient for the continued positive development of the company.
General meetings
Auriga’s annual general meeting is normally held in April, and the agenda must include the following items:
1. Report by the Board of Directors on Auriga's activities in the past financial year.
2. Presentation of the annual report with auditor’s report for adoption, including resolution
about the discharge of obligations of the Board of Executives and the Board of Directors.
3. Resolution concerning appropriation of profits or cover of losses in accordance with the
adopted annual report.
4. Election of members to the Board of Directors.
5. Appointment of auditor.
6. Any proposals submitted by the Board of Directors or by shareholders.
General meetings are called subject to 2-4 weeks’ notice, and proposals from shareholders must, in order to be considered by the annual general meeting, be submitted to the Board of Directors within two months of the end of the financial year at the latest.
Proxies given to the Board of Directors do not include the positions of shareholders regarding individual items on the agenda. The reason for this deviation from the recommendations is that, in the opinion of the Board of Directors, the inclusion of the position of the shareholder regarding each item on the agenda on the proxy form does not take account of the development of the debate at the general meeting.
The group management endeavours to strike a continuous balance in the value creation for all stakeholders. Moreover, Auriga is keen to contribute to responsible behaviour, as reflected, among other things, in Cheminova’s annual CSR (Corporate Social Responsibility) report and in the environmental accounts.
Information and investor relations
Through active and structured investor relations and information activities, an open and trustworthy dialogue is preferred with investors, analysts, stockbrokers and other stakeholders. All communication is in accordance with the code of conduct of the stock exchange.
Every year, the Board of Directors discusses and decides on the overall strategic management of the group, and the level of internal reporting to ensure a satisfactory financial and managerial supervision of the company. The procedures of the Board of Directors are also reviewed once a year with a view to matching the current needs of the company.
The Board of Directors is composed of a wide variety of competences, and the selection of new candidates is based on the degree of professional qualifications, possibly combined with broadly based international experience, deemed by the Board of Directors to be required to supplement those of the existing members. The Board of Directors of Auriga is independent pursuant to the OMX guidelines and has no standing committees. A total of seven meetings were held by the Board of Directors in 2007, with the same number of meetings being planned for 2008.
Auriga has not defined how many honorary positions a member of the Board of Directors may hold, as emphasis is being placed on the input, qualifications and capacity of individual members. The Board of Directors believes that it is sufficient to state the members’ combined holding of shares in the company. At the beginning of 2008, the Chairman of the Board of Directors has, with the assistance of an external consultant, carried out an evaluation of the collaboration and working methods of the Board of Directors.
No information on individual remuneration is given as the information on developments in the combined remuneration paid to the Board of Directors and the Board of Executives is regarded sufficient.
Members of the Board of Directors receive fixed remuneration and are not part of any incentive schemes.
The Board of Directors determines the remuneration for the Board of Executives once a year. The basic pay received by members of the Board of Executives is often supplemented by incentive programmes. Other members of the management also receive basic pay supplemented with incentive programmes.
Other employee groups typically receive basic pay as well as bonus/profit-sharing.
The general meeting approves the remuneration for the Board of Directors and the Board of Executives, including any performance-related pay as described in further detail in Note 3 in the annual report for 2007.
No agreement has been made with any member of the Board of Executives which imposes obligations of an unusual nature on the group over and above one year of severance pay.
The most significant business risks are identified and described in Auriga’s annual report, while the most important risk-reducing procedures are described at an operational level. The Board of Directors monitors Cheminova’s commercial and financial risk management, while also regularly evaluating the general risk exposure as such.
The Board of Directors reviews the internal control systems at least once a year, and for the time being the Board of Directors sees no need for the establishment of internal audits as such.
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