Corporate Governance – management and ownership

Plesner offers advice on Corporate Governance in practice, and in cooperation with the Faculty of Law at the University of Copenhagen we offer Bestyrelsesakademiet (The Board Academy), a senior executive master’s degree for present and future board members.

What is Corporate Governance?

Corporate Governance may be defined as the values according to which the company is managed and the general principles and structures regulating the interaction between the management bodies of the company, the owners and other stakeholders directly affected by company operations.

Corporate Governance is a concept which has in recent years been of high priority on the agenda of the corporate sector and the public at large, reflecting the need to reduce the distance between management, shareholders and other stakeholders.

Recommendations for good corporate governance

The Committee for Good Corporate Governance recommends that management and the board of directors consider the following eight areas: 

• The role of shareholders in the interaction with management
• The role and importance of stakeholders vis-à-vis the company
• Openness and transparency
• The duties and responsibilities of the board of directors
• The composition of the board of directors
• Remuneration of the members of the board of directors and the supervisory board
• Risk management
• Audit

Active positioning

The recommendations for good governance imply, among other things, that management and the board of directors take an active position on each aspect of the recommendations and decide on their implementation in the company.

Companies decide on the degree of involvement

The recommendations for good governance fall under the headings of "soft law" or "best practice", implying that the companies are not directly bound to follow them.

The recommendations are based on the comply-or-explain principle, implying that it is up to each individual company to decide to what extent it wants to comply with the recommendations. Where a company does not comply with a recommendation, it must explain why and what measures have been taken instead. Thus, non-compliance with a recommendation does not constitute regulatory breach, but is an indication that the company has made other arrangements than those included in the recommendations.