STATUTORY REPORT ON CORPORATE GOVERNANCE

Monberg & Thorsen A/S has a clear segregation of duties between the Board of Directors and the Executive Board. Duties and responsibilities are determined at overall level through rules of procedure for the Board of Directors.

The Executive Board is in charge of the day-to-day management of the company, and the Board of Directors oversees the Executive Board and takes care of overall strategic management tasks. The chairman is the Board of Directors’ principal contact with the Executive Board.

Monberg & Thorsen A/S ’s sole activity is MT Højgaard A/S’s activities. As part of the management of Monberg & Thorsen A/S’s activities, representatives of Monberg & Thorsen A/S’s Board of Directors serve on the Board of Directors of MT Højgaard A/S.

Board of Directors

Composition of the Board of Directors
The Board of Directors is elected by the shareholders in general meeting. The Board consists of not less than three and not more than six members, currently three members.

In elections to the Boards of Directors of both Monberg & Thorsen A/S and MT Højgaard A/S, efforts are made to ensure a professionally composed Board of Directors that, collectively, possesses the necessary knowledge and experience of board work as well as knowledge of social, commercial and cultural factors in the markets in which the companies have their principal business activities. Efforts are also made to achieve a diverse composition for the Board.

Two of the three Board members are women, and no target has therefore been set for the number of women on the Board of Directors of Monberg & Thorsen A/S.

The current Board of Directors does not meet the independence criteria as only Anders Heine Jensen can be considered to be independent.

An annual self assessment procedure has been established for the Board.

In connection with the election of a new member to the Board of Directors, the Chairman of the Board interviews the selectively chosen candidate to ensure that his or her profile suits the vacant seat.

In connection with the notice convening the general meeting, a description of the background of the nominated candidates is given, along with information on memberships of executive boards or boards of directors in both Danish and foreign companies as well as any demanding organisational posts. A description is also provided of the candidates’ educational background, professional qualifications and the expertise deemed to be relevant to the Board’s work.

All members of the Board elected by the shareholders in general meeting retire by rotation each year. This provides the company’s shareholders with an opportunity to discuss the recruitment criteria, composition and diversity of the Board at the Annual General Meeting each year.

There are no formal requirements with respect to the number of seats on other boards of directors the individual Board members may hold, but on election it is pointed out to new Board members that it is important for them to ensure that they have sufficient time for their duties and that they perform them diligently and conscientiously. In Monberg & Thorsen A/S’s experience, Board members are rarely absent from Board meetings.

According to the Board of Directors’ rules of procedure, Board members must retire not later than at the first general meeting following their 70th birthday, except where special circumstances apply.

The Board met a total of six times in 2017 and at present expects to meet six times in 2018. In accordance with its rules of procedure, the Board always meets at least six times between Annual General Meetings.

Audit Committee
The full Board of Directors functions as Audit Committee.

Remuneration of the Board of Directors
Monberg & Thorsen A/S has not introduced incentive pay for the Board. Board remuneration for 2017/18 was reduced to DKK 100,000 for ordinary members, with a supplement to the Chairman. Besides their normal remuneration, the Chairman or members may be paid remuneration for special tasks undertaken by them, although the total remuneration received by a Board member may not exceed twice the Chairman’s ordinary remuneration. Details of total remuneration paid to the Board are disclosed in note 7 to the financial statements.

Executive Board
The Executive Board consists of the President and CEO, whose background and practical experience match the company’s current needs.

Remuneration of the Executive Board
Executive Board remuneration is fixed. Details of remuneration paid to the Executive Board are disclosed in note 7 to the financial statements.

Corporate governance recommendations
Monberg & Thorsen A/S’s B shares are listed on Nasdaq OMX Copenhagen, and Monberg & Thorsen A/S in principle complies with the corporate governance recommendations as set out at www.corporategovernance.com.

Monberg & Thorsen A/S has taken a position on all recommendations based on the ‘comply-or-explain’ principle, as described in detail at Corporate Governance details, to which reference is made.

The Board of Directors is  of the opinion that these recommendations are being practised in the management of Monberg & Thorsen A/S. In some areas, the principles are complied with in part only, as the corporate governance recommendations are not all relevant in their entirety in view of the company’s size and activities.

Financial reporting process
With effect from 1 January 2017, a management agreement has been entered into with Albjerg Statsautoriseret Revisionspartnerselskab, which takes care of the day-to-day management and bookkeeping, including assistance in connection with the preparation of interim financial reports and annual reports, etc., for Monberg & Thorsen A/S.

The accounting and control systems are designed to ensure that internal and external financial reporting gives a true and fair view without material misstatement and that appropriate accounting policies are defined and applied.

The Board of Directors and the Executive Board regularly review material risks and internal controls in connection with the companies’ activities and their potential impact on the financial reporting process.

The responsibility for maintaining adequate and effective internal controls and risk management in connection with the financial reporting lies with the Executive Board. The Board of Directors monitors the financial reporting process on an ongoing basis, including that applicable legislation is being complied with, that the accounting policies are relevant, including the manner in which material and/or exceptional items and accounting estimates are accounted for, and the overall disclosure level in Monberg & Thorsen A/S’s financial reporting.