STATUTORY REPORT ON CORPORATE GOVERNANCE

Management structure
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.

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 representation of the underrepresented gender on the Board of Directors of Monberg & Thorsen A/S.

The current Board of Directors does not meet the independence criteria.

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 international companies as well as any demanding organisational posts. A description is also provided of the candidates’ educational background, professional qualifications and the skills 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 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.

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

Nomination and Remuneration Committee
The full Board functions as Nomination and Remuneration Committee. 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.

Each year, the shareholders in general meeting approve the remuneration for the members of the Board of Directors for the coming year. Further details on remuneration received by the Board of Directors are provided in the remuneration report below.

The work of Board of Directors
The Board met a total of six times in 2018 and at present expects to meet six times in 2019. In accordance with its rules of procedure, the Board always meets at least six times between Annual General Meetings.

Monberg & Thorsen A/S holds one annual Audit Committee meeting only as this meets current needs and also because its activities are placed in MT Højgaard A/S.

Evaluation of the Board of Directors
An annual self-evaluation procedure has been established for the Board. In 2018, the annual evaluation was conducted in the form of completion of a questionnaire by all members of the Board. Overall, Board members concluded that the information level was satisfactory, that their skills are being satisfactorily drawn upon and that members have a high degree of influence on and involvement in the Board’s decisions.

Composition of the Executive Board
The Executive Board consists of the CEO, whose background and practical experience match the company’s current needs. Further details on remuneration to the Executive Board are provided in the remuneration report below.

Gender composition of management
We do not discriminate on grounds of gender, race or religion when recruiting, training or promoting employees. The Board of Directors consists of two women and one man, which is considered an even distribution. Because the company has one employee only, no further management information is provided on Monberg & Thorsen A/S.

Remuneration report
General remuneration policy
Remuneration received by the Board of Directors and Executive Board is exclusively in the form of a fixed fee. Monberg & Thorsen A/S has not introduced incentive pay for the Executive Board or the Board of Directors.

Board of Directors
The Board of Directors receive remuneration in the form of a fixed fee. 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 a fee for special tasks undertaken by them, although the total remuneration received by a Board member may not exceed twice the Chairman’s ordinary remuneration. Members are not paid a separate fee for participation in the Audit or Nomination and Remuneration Committees.

Executive Board
Executive Board remuneration is fixed.

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.

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 laws are 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.