The revised ‘recommendations for good company management’, which are applicable for the annual reports of quoted companies and which are published for the financial years that start on January 1st 2006 or later, have been evaluated by the board of directors and management team, and they abide by them.
It is the opinion of the board and the management team that Flügger essentially abide by the given recommendations with the following exceptions:
Structure of capital and share
We have stated the board of directors finds the current division into A and B shares appropriate, and therefore have no current plans – or possibilities – for any changes in this respect.
Openness and transparency
It is the policy of Flügger to be open and honest, but we have decided, for instance, to declare the aggregate remuneration of the board and the aggregate remuneration of the management team, as we feel that information on an individual basis has a limited relevance for the majority of the shareholders. We have equally decided not to produce information in English on the basis that only 1 1/2% of the named shareholders in the company are domiciled outside of Scandinavia.
The constitution and remuneration of the board
It is the norm in Flügger to have 4 board members elected at the annual general meeting and 2 staff representatives. At the composition of the board it is the aim that 3 members are independent of the company, the main shareholder and significant supplier or customer interested parties, and that 1 member is nominated by the main shareholder. We have decided against an age limit, as it is thought useful to have a free hand in certain special instances. The main shareholder recommends – on behalf of all shareholders – the remuneration of the board of directors. If significant changes have been decided, the shareholders will be informed at the ordinary general meeting. Further details relating to the work of the board can be seen under ‘Order of business for the board of directors.
Share options, incentive schemes etc.
Flügger has decided against the use of incentive schemes for the board as well as the management team. The managing director has an agreed salary plus bonus, which is related to the top and bottom line of the company. Key staff members equally have a bonus agreement, which is related to the balance scorecard and personal goals. The company has since 2005 offered Danish staff members to receive staff bonds against reduced salary.
The use of working groups and committees
Flügger has decided against the use of working groups and committees for the use of nomination, remuneration and audit. The reason for this decision is that the board and the management team is sufficiently narrow so that this can be avoided. This does not exclude the possibility of an occasional use of external assistance.
The order of business – click here
Detailed position relating to ‘Recommendations for good practice/Corporate Governance’ – click here