Board Perspectives

Welcome to Board Perspectives – an innovation from Board Network, The Danish Professional Directors Association. Board Perspectives is aimed at everyone who is interested in the board agenda in Denmark. As with all board network’s other initiatives, the ambitions are high; we want to publish the leading Danish publication with a focus on Corporate Governance and board leadership. board Perspectives will be published quarterly – and each time will feature several articles written by leading external experts as well as interviews, news and much more. The focus is on content over form – and on news angles and approaches with an edge. In this first issue, we bring “4 sharp questions” twice to a couple of Denmark’s most experienced board chairmen; Sanna Suvanto-Harsaae and Thomas Thune Andersen. both are – despite their considerable experience – representatives of the renewal in the boards, and not least they are two of the most international board profiles in our country, which we definitely will get to see more here. In addition, we have allied ourselves with four sharp advisers / service providers, each of whom focuses on new Corporate Governance measures in the financial sector, digitization of board work, audit committees and audit tenders, as well as an update on the latest developments in the area of ​​board responsibility. again, these are not just news reports, but clear statements of opinion on best practices!

INTERESTING TOPICS 2014

From the board network’s own lookout tower, we see several topics that fade into the horizon, and which will become hot topics in the boardrooms either in the run-up to and at spring’s upcoming general meetings or later in the year in more closed forums. some of these are repeats from last year, some even older. examples of this are replacements in the boards due to the EU Crd-iv directive’s limitations on the number of board positions in the financial sector as well as an ever-increasing focus on carrying out a proper evaluation of the board. finally, increased diversity – understood as both competence-related, international and gender diversity – is a point that all major boards must discuss.

The boards of the C20 companies have gained a markedly more international profile over the last few years, but there is still a tendency to recruit either pure industry specialists or “generic” CEO and CFo representatives. On the other hand, functional specialties are only fleetingly represented – in contrast to the trend that we, among other things, looking in the USA, the UK, Canada, Australia, and other places, where governance development is typically a few years further along than at home. In these countries can be seen, among other things, heavy profiles with expertise in digitalization, marketing, Hr., supply chain and strategy consultants among those who are at the highest rate for new recruitments to the boards. Gender diversity is a chapter. At the end of 2013, both the EU Commission and the EU Parliament adopted very strict rules in this area, but since the Council of Ministers must also ratify it, due to strong opposition in certain EU countries, it is doubtful whether the rules will be implemented as they are now.

It is certain, however, that the companies that do not prepare for the future – and with it a greater equality between the sexes – will stand as the losers in the recruitment processes. Because when they finally see the light – by themselves or by force – the race to attract the most talented women will be won by other companies and by other countries that chose a more proactive stance on this issue. at the time of writing, the proportion of women elected by general meetings in Danish listed companies is still only 12%. and this despite not only legal regulations and EU initiatives, but even more importantly solid documentation of the positive effect that gender diversity has on the bottom line, cf. studies and reports from both Catalyst, McKinsey & Co, and Credit Suisse over the last few years year. however, one of the completely new trends is the explosive increase in focus on the interaction between the board and shareholders, which Danish listed companies can also expect. institutional investors make greater and greater demands – and at the same time experience that the outside world is making increasing demands on the investors’ actions in this area. in a country like the UK, the UK Stewardship Code was introduced a few years ago, which sets out a number of recommendations for the cooperation between the board and shareholders, and a country like Japan is on the way with similar rules. Here at home we have for many years been used to the agenda in this area being set by atP and ld, but with a greatly increased international investor profile on naSdaQ oMX, players such as blackrock, the Carlyle Group, Aberdeen asset management, Fidelity investments and the Norwegian oil fund have become very important for the price development of a large number of shares – and thus also for an ever-increasing number of boards. these investors require insight into and influence on nomination processes, remuneration policy, board evaluation, succession planning at C-level, CSR policy, etc. At the same time, their funds under management have increased so strongly over the past few years that, for some, they find it difficult even to follow all portfolio companies in detail.

Therefore, the Proxy Agent also has greater influence – and the boards can only do one thing; follow suit. the skilled board is, of course, also proactive on this point – not reactive. But in Denmark many places still need to get used to this new agenda.

STRATEGY EXCELLENCE

Finally, we see the board’s value-creating, active involvement in the company’s strategy, as the major driver behind the sorting of sheep and goats among the companies. How this takes shape differs significantly from company to company and not least from board (chairman) to board (chairman). the traditional division of labor, where the executive board determined the strategy and the board only generally kept informed/involved, is becoming a thing of the past in most companies. it has thus become a more tightly controlled role that the executive boards play today, while the boards, on the other hand, have to get used to the fact that the increased influence they have assumed will also soon translate into responsibility. Because when you have taken over the helm, after a while you are not only part of the solution, but equally part of the problem if the strategic measures do not work as intended. there is a big difference between the definition and the practice of Strategy excellence. The benchmarks currently consist of e.g. apple, blackrock, Google, alibaba, leGo, Huawei, Samsung, etc. at the board network, we are proud to be able to present at the third edition of the Great Danish Board Conference a large number of the leading exponents who, in different ways, characterize what we understand by Strategy excellence – and who over the coming years (hopefully) will could prove what we predicted in this premiere edition of board Perspectives as particularly excellent in the field. Meet i.a. chairman of the board Flemming Besenbacher (Carlsberg), chairman of the board lars v. Frederiksen (Matas), Chairman of the board Jens Due Olsen (Kompan), Ceo Jeff Gravenhorst (iSS), CFo Lene Skole (Coloplast), Managing director Zehrid Osmani (Blackrock), Principal Michael Haaning (Nordic Capital), associate Professor Morten Sørensen (Columbia business School) and Partner Finn l. Meyer (KPMG). It will happen on the 18th of March 2014 at 12 p.m. -7 p.m. in the odd Fellow Palæet in Copenhagen. once again welcome to board Perspectives. We wish you a good reading. Ditte Kirstein Brammer & Jakob Stengel