Recommendations

Recommendations for Corporate Governance from the Committee on Corporate Governance

In May 2013 the most recent version of Recommendations for Corporate Governance was published. The recommendations were most recently updated in November 2014. Topdanmark has a defined approach to each of the items. See Topdanmark's appoach under each item:

1. Communication and interaction with investors and other stakeholders

1.1. Dialogue between Company, shareholders and other stakeholders

1.1.1. The Committee recommends that the Board of Directors ensure ongoing dialogue between the Company and its shareholders in order for the shareholders to gain relevant insight into the Company’s potential and policies, and in order for the Board of Directors to be aware of the shareholders’ views, interests and opinions on the company.

Topdanmark recognises the value and necessity of an open dialogue with its shareholders and therefore it is giving, and has for many years given, high priority to its Investor Relations activities.

Topdanmark is striving to be active and proactive towards investors at home and abroad by using information and communication channels such as

• Investor meetings
• Conference calls
• Web casts, and
• Investment and insurance conferences.

Topdanmark holds around 150-200 investor meetings each year. Presentations from the investor meetings are available on the Company's website.

1.1.2. The Committee recommends that the Board of Directors adopt policies on the Company’s relationship with its stakeholders, including shareholders and other investors, and that the Board of Directors ensures that the interests of the shareholders are respected in accordance with company policies.

Topdanmark has identified clear guidelines for the company's relationship with its main stakeholders (shareholders, customers, employees). Topdanmark has also adopted policies for its Investor Relations activities. Read more about Topdanmark's objectives, goals and strategies, Topdanmark's customer-oriented values, Topdanmark's management values (in Danish only) and Topdanmark's Investor Relations philosophy.

1.1.3. The Committee recommends that the Company publish quarterly reports.

Topdanmark publishes quarterly reports.

1.2. Annual General Meeting (AGM)

1.2.1. The Committee recommends that, when organising the Company’s AGM, the Board of Directors plans the meeting to support active ownership.

Topdanmark recognises the value of active ownership and, for example, through its significant Investor Relations activities, it endeavours to support both the commitment shown by its shareholders and its dialogue with them.

Topdanmark convenes the AGMs in accordance with legislation and the Company's Articles of Association. Furthermore, about one month prior to the AGM, the Company sends a written invitation to all the Danish and foreign shareholders who had requested it and at that time were inscribed or registered by name, thus endeavouring to ensure the largest possible shareholder attendance at its general meetings.

Topdanmark regularly assesses whether to hold the AGM by physical attendance or as a part or full electronic AGM. The Board of Directors is not dismissive of a part electronic Annual General Meeting, but at present, it is awaiting the market's development of technically safe solutions to handle it. The Board of Directors believes that such solutions are not yet available.

1.2.2. The Committee recommends that proxies granted for the AGM allow shareholders to consider each individual item on the agenda.

Topdanmark is only requesting proxies for one specific AGM.

Shareholders may grant the Board of Directors a proxy to vote for or against each individual item on the agenda and they may also actually vote by post. A proxy/postal vote form is sent to all shareholders who have requested it, and are inscribed or registered by name prior to the AGM. Electronic proxy/postal vote may be cast on Topdanmark’s Investor Portal. Furthermore, proxy/postal vote forms  are available for downloading from the Company's website.

1.3. Takeover bids

1.3.1. The Committee recommends that the Company set up contingency procedures in the event of takeover bids from the time that the Board of Directors has reason to believe that a takeover bid will be made. According to such contingency procedures, the Board of Directors should not without the acceptance of the AGM, attempt to counter the takeover bid by making decisions which in reality prevent the shareholders from deciding on the takeover bid themselves.

The Board of Directors has adopted a contingency plan for uninvited takeover bids. The plan is revised regularly and at least once a year.

Topdanmark's contingency plan in the event of an uninvited takeover bid is intended to allow shareholders to consider the terms offered on an accurate and well-informed basis. Except for the authorisations granted in Articles 3A-3G to increase the Company's share capital, Topdanmark's Articles of Association have no provisions enabling the Board of Di-rectors to establish measures to resist an attempted takeover unless accepted by the shareholders.

Topdanmark believes that a share price reflecting the future earnings potential is the only actual protection against an uninvited takeover bid.

2. Tasks and responsibilities of the Board of Directors

2.1. Overall tasks and responsibilities

2.1.1. The Committee recommends that the Board of Directors take a position on the matters related to the Board of Directors’ performance of its responsibilities at least once a year.

Topdanmark’s rules of procedure lay out the guidelines for the tasks of the Board of Directors’ in more detail.

The Board of Directors has adopted a work plan (an annual wheel) in order to ensure appropriate planning of the tasks of the Board of Directors. The plan is revised regularly and at least once a year.

In the same way, the rules of procedure for the Board of Directors is revised regularly and at least one a year. The review of the work plan and the rules of procedure are part of the work plan of the Board of Directors.

2.1.2. The Committee recommends that at least once a year, the Board of Directors take a position on the overall strategy of the Company with a view to ensuring value creation in the Company.

Topdanmark's Board of Directors holds an annual Board seminar to discuss and establish, among other things, the Company's overall strategy including how to ensure future value creation. Furthermore, the Board of Directors regularly considers all these matters.

2.1.3. The Committee recommends that the Board of Directors ensure that the Company has a capital and share structure ensuring that the strategy and long-term value creation of the Company are in the best interest of the shareholders and the Company, and that the Board of Directors presents this in the management review in the Company’s Annual Report and/or on the company’s website.

For a number of years, Topdanmark was working towards gradually removing the restrictions on, for example, voting rights. See Corporate Governance on the website for a historical review of Corporate Governance related initiatives taken by the Company since 1995.

The last restrictions on voting rights and the voting ceiling set out in the Articles of Association were removed at Topdanmark's 2001 AGM. Therefore, today the Articles of Association set out no restrictions on voting rights.

The Board of Directors has adopted a policy for capital structure and regularly ensures that Topdanmark's capital and share structures continue to be appropriate and support the Company’s strategy and long-term value creation, for example when a quarterly report is published. Information on Topdanmark's capital and earnings distribution model is updated on the website when the quarterly reports are published and also described in the management's review in the Annual Report.

2.1.4. The Committee recommends that the Board of Directors annually review and approve the guidelines for the Executive Board; this includes establishing requirements for the Executive Board on timely, accurate and adequate reporting to the Board of Directors.

As a financial services company, Topdanmark is subject to detailed regulatory requirements on the distribution of duties between the Board of Directors and the Executive Board and on the reporting from the Executive Board to the Board of Directors. Of course, Topdanmark meets these requirements and the Board of Directors has adopted a wide range of policies and guidelines for the Executive Board, including Reporting policy and guidelines.

2.1.5. The Committee recommends that at least once a year, the Board of Directors discuss the composition of the Executive Board, as well as developments, risks and succession plans.

The Board of Directors holds an evaluation meeting at least once a year. The Executive Board does not participate in this meeting. Prior to the evaluation meeting, the Executive Board’s discussion paper on management succession planning of the Topdanmark Group has been presented to the Board of Directors. At the evaluation meeting, the Board of Di-rectors discusses, among other things, the composition of the Executive Board, development initiatives, risks and succession plans.

2.1.6. The Committee recommends that once a year, the Board of Directors dis-cuss the Company’s activities to ensure relevant diversity at management levels, including setting specific goals and accounting for its objectives and progress made in achieving the objectives in the management review in the company’s Annual Report and/or on the website of the Company.

Topdanmark believes that diversity provides business value and that it is important that employees, irrespective of gender, nationality, religion or other characteristics, have equal access to executive positions at all levels.

In accordance with legislation, the Board of Directors has set target figures for the gender composition of the Board of Directors and adopted ”Policy for diversity”, which includes target figures for the underrepresented gender, and “Policy for diversity and the underrepresented gender in executive functions in Topdanmark”. The Board of Directors meets its goal and the statutory definition of an equal gender distribution.

Topdanmark has also signed up to the UN Global Compact intended to ensure, among other things, the prevention of discrimination in businesses.

Topdanmark explains both its objective and the progress made in achieving it in its management's review and CSR Report published on the Company’s website.

The Board of Directors discusses regularly, and at least once a year, the Company’s activities of diversity and the current state of diversity.

2.2 Corporate Social Responsibility

2.2.1. The Committee recommends that the Board of Directors adopt policies on Corporate Social Responsibility.

Topdanmark has adopted policies for its Corporate Social Responsibility and in accordance with the Danish accounting Order, it adopts and publishes an annual CSR report.

Read more about Topdanmark's CSR policy and CSR report.

2.3. Chairman and Deputy Chairman of the Board of Directors

2.3.1. The Committee recommends appointing a Deputy Chairman of the Board of Directors who will assume the responsibilities of the Chairman in the event of the Chairman’s absence, and who will also act as effective sparring partner for the Chairman.

There is and has always been a Deputy Chairman on Topdanmark's Board of Directors. The Deputy Chairman replaces the Chairman in the Chairman's absence. The Deputy Chairman attends chairmanship meetings with the Executive Board prior to each Board meeting in order, among other things, to be an effective sparring partner for the Chairman.

2.3.2. The Committee recommends ensuring that, if the Board of Directors, in exceptional cases, asks the Chairman of the Board of Directors to perform special operating activities for the Company, including briefly participating in the day-to-day management, a board resolution to that effect be passed to ensure that the Board of Directors maintains its independent, overall management and control function. Resolutions on the Chairman’s participation in the day-to-day management and the expected duration hereof should be published in a company announcement.

The Chairman does not - not even briefly - participate in the day-to-day management of the company, nor does the Chairman perform other special tasks for the Company be-sides the duty as Chairman of the Board of Directors.

3. Composition and organisation of the Board of Directors

3.1 Composition

3.1.1. The Committee recommends that the Board of Directors annually
accounts for:

a) the skills it must have to best perform its tasks,
b) the composition of the Board of Directors, and
c) the special skills of each member.


The Board of Directors has addressed the composition and qualifications of the Board of Directors in "Policy for diversity in the Board of Directors".

Topdanmark considers it important to have a small and active Board of Directors. The Board of Directors believes that by imposing very specific requirements on its members in advance, it risks to prevent the election of evidently qualified Board candidates if they do not fully meet the requirements.

Topdanmark wishes to make a specific decision on each Board candidate based upon an overall consideration of the candidate's qualifications as compared with the Company's business model and associated risks, present needs and the composition of the rest of the Board of Directors.

Topdanmark believes that in a company like Topdanmark, between them, its Board members should possess skills within organisation, strategic management, insurance operations, reinsurance, long-tail business, financial and insurance reporting, general statistics, risk management and assessment, sales in the personal and professional markets, marketing/branding, outsourcing, finance, own funds, solvency and minimum capital requirements, rules for internal models, auditing, financing, investment, statutory limits, compliance, IT and IT security, digitalisation and recruitment/HR. With its current composition, Topdanmark's Board of Directors possesses all these skills.

Based on the Company's current needs, the Board of Directors evaluates, at least once a year, when assessing itself at the Board seminar, its composition, the need for renewal/supply of new skills, including whether, specifically or generally, there is a need for supplementary training of the existing Board members.

Compulsory introduction training is given to Board members elected by employees after each election of employee representatives. As of 1 January 2017, new requirements to compulsory basic training for Board members at financial businesses came into force. Topdanmark will ensure that the new requirements are met, when new Board members join the Board of Directors after 1 January 2017. Additionally, dependent on each Board member's qualifications and needs, all newly elected Board members receive targeted introduction to Topdanmark and supplementary training, if required. Furthermore, training sessions are held regularly at Board meetings and seminars.

On its website and in its management's review in the Annual Report, Topdanmark specifies the skills Topdanmark's Board of Directors should currently have and whether the Board of Directors believes that it currently has these skills. Furthermore, when convening its Annual General Meeting, Topdanmark describes the specific criteria on which the nomination of each Board candidate has been based.

As the members of the Board of Directors are eligible for election each year, information on their profiles and qualifications is published every year when the Annual General Meeting is convened. Furthermore, this information is available in the management's review in the Annual Report which also includes a description of Topdanmark's recruitment philosophy, necessary skills and diversity. Finally, the information is available on the Company's website. The information on the website is updated regularly and at least quarterly.

3.1.2 The Committee recommends that the selection and nomination of candi-dates for the Board of Directors be carried out through a thoroughly transparent process approved by the entire Board of Directors. When assessing its composition and nominating new candidates, the Board of Directors must take into consideration the need for integration of new talent and diversity in relation to age, international experience and gender.

The Board of Directors regularly discusses its composition, specifically at the Board seminar when the annual evaluation is made. The Board of Directors takes into consideration whether it possesses the necessary and relevant skills, diversity etc. needed to operate the Company. To the extent there is a need for one or more new Board candidates, the Board of Directors analyses the necessary and relevant skills, and on this basis it starts a process held by the Nomination Committee of the Board of Directors to find one or more relevant candidates.

The Board of Directors has adopted "Policy for diversity in the Board of Directors"

3.1.3. The Committee recommends that a description of the nominated candidates’ qualifications, including information about the candidates'

a) other executive functions, e.g. memberships in Executive Boards, Boards of Directors, and Supervisory Boards, including Board committees in foreign enterprises, be accompanied by the notice convening the Annual General Meeting when election of members to the Board of Directors is on the agenda,
b) demanding organisational tasks, and information
c) about whether candidates to the Board of Directors are considered independent.


The Board of Directors is eligible for election each year.

The proposal made by the Board of Directors for Board candidates is accompanied by a detailed description of each candidate, stating their CVs including information on their education, current and previous occupation, other executive functions in Danish and foreign companies, demanding organisational tasks and offices held and whether the candidate is considered to be independent.

3.1.4 The Committee recommends that the Company’s Articles of Association stipulate a retirement age for members of the Board of Directors.

The Annual report and Topdanmark's website discloses information on the Board members' year of birth.

At the 2016 AGM, it was decided to abolish the existing age limit of 70 years for Board members set out in the Articles of Association. The decision was made on the basis of the general social development where age limits are increasingly abolished to prevent age discrimination, and due to the fact that age in itself is not decisive for the capacity of board members. Furthermore, it is the opinion of the Board of Directors and the AGM that an age limit of 70 years may be a limiting factor in connection with future recruitment of Board members.

Topdanmark’s Board of Directors has established a thorough self-evaluation process used for annual evaluation of each Board member’s competences and discharge of Board duties. Due to the self-evaluation process, Topdanmark’s Board of Directors is able to assess the eligibility of each Board member on a regular basis. In Topdanmark’s opinion, this is a better guideline than an undifferentiated age limit laid down in the Articles of Association.

3.1.5. The Committee recommends that members of the Board of Directors elected by the Annual General Meeting be up for election every year at the Annual General Meeting.

All of Topdanmark's Board members elected by the AGM are up for election each year.

3.2. Independence of the Board of Directors

3.2.1. The Committee recommends that at least half of the members of the Board of Directors elected by the Annual General Meeting be independent persons, in order for the Board of Directors to be able to act independently of special interests. To be considered independent, this person may not:

a) be or, within the past five years, have been member of the Executive Board, or senior staff member in the Company, a subsidiary undertaking or an associate,
b) within the past five years, have received larger emoluments from the Company/Group, a subsidiary undertaking or an associate in another capacity than as member of the Board of Directors,
c) represent the interests of a controlling shareholder,
d) within the past year, have had significant business relations (e.g. personal or indirectly as partner or employee, shareholder, customer, supplier or member of the executive management in companies with corresponding connection) with the Company, a subsidiary undertaking or an associate,
e) be or within the past three years have been employed or partner at the external auditor,
f) have been Chief Executive in a company holding cross-memberships with the company,
g) have been member of the Board of Directors for more than 12 years, or
h) have been a close relative with persons who are not considered independent.


Torbjörn Magnusson, Ricard Wennerklint and Petri Niemisvirta, members of the Board of Directors, represent the interests of a controlling shareholder. Annette Sadolin has been a member of the Board of Directors for more than 12 years. Consequently, these four members of the Board of Directors do not meet the definition of independence set out by the Committee on Corporate Governance. During the last three years, Lone Møller Olsen has been a partner at Deloitte, Topdanmark’s external auditor. Thus, Lone Møller does not meet the definition of independence set out by the Committee on Corporate Governance either. However, since Lone Møller Olsen has left Deloitte and has not worked with Topdanmark for the last 20 years, it is the opinion of the Board of Directors that Lone Møller Olsen meets the definition of independence Jens Aaløse is independent.

Thus, Topdanmark does not meet the recommendation of item 3.2.1 that at least half of the members of the Board of Directors elected by the Annual General Meeting should be independent persons. Since the AGM in 2017, Topdanmark’s major shareholder has had a 50% representation in the Board of Directors, corresponding to its equity interest in Topdanmark. It is natural and widely recognized that a major shareholder’s representation on the Board of Directors corresponds to its equity interest. With such a strong representation of just one major shareholder, two newly elected members of the Board of directors and two members of the Board of Directors with just one year’s seniority, it is desirable and in the interest of all Topdanmark’s shareholders that, due to high seniority and thorough knowledge of the insurance business, one of the members of the Board of Directors has extensive knowledge of Topdanmark and the ability to enter into a critical dialogue with the Executive Board and the representatives of the controlling shareholder on the Board of Directors. Therefore, it is the opinion of the Board of Directors that Annette Sadolin is particularly suited for being a member of Topdanmark’s Board of Directors due to her high seniority, although it means that Topdanmark does not meet the recommendation of item 3.2.1.

3.3. Members of the Board of Directors and the number of other executive functions

3.3.1. The Committee recommends that each member of the Board of Directors assess the expected time commitment for each function in order that the member does not take on more functions than he/she can manage satisfactorily for the Company.


Topdanmark believes that it is up to each individual Board member to decide how many other positions they can handle and that the amount of managerial work varies significantly from company to company. Therefore, each Board member is responsible for not taking on more functions than he/she can handle in a satisfactory way.

Regularly and specifically when assessing itself once a year and when nominating candidates for the annual election of Board members, the Board of Directors assesses whether each Board member/candidate has been and will continue to be able to allocate sufficient time and attention to perform his/her Board duties in Topdanmark.

3.3.2. The Committee recommends that the management’s review, in addition to the provisions laid down by legislation, includes the following information about the members of the Board of Directors:

a) the position of the relevant person,
b) the age and gender of the relevant person,
c) whether the member is considered independent,
d) the date of appointment to the Board of Directors of the member,
e) expiry of the current election period,
f) other executive functions, e.g. memberships in executive boards, boards of directors, and supervisory boards, including board committees in foreign enterprises and
g) demanding organisational tasks, and
h) the number of shares, options, warrants and similar in the Company, and other Group companies of the Company, owned by the member, as well as changes in the portfolio of the member of the securities mentioned which have occurred during the financial year.


The management’s review, Topdanmark's website and the notice convening the AGM disclose information on, among other things, each Board member’s – and Candidate’s – position, age, gender, independence, date of joining the Board, his/her other executive functions and demanding organisational tasks.

The period of election for Board members elected by the AGM in Topdanmark is one year. The date of expiry of the election period is self-explanatory.

On its website, Topdanmark discloses information on holding of shares, options etc. at Group level, i.e. for the entire Board of Directors, the entire Executive Board etc. The management’s review and/or the Annual Report contain information of the number of shares, options, warrants etc. in Topdanmark and Topdanmark’s subsidiaries owned by the individual Board members and the changes in these holdings during the financial year. The transactions of the members of the Board of Directors and the Executive Management in Topdanmark shares, options etc. are reported to the Danish FSA in accordance with current rules.

3.4. Board Committee (or Committees)

3.4.1. The Committee recommends that the Company publish the following on the Company’s website:

a) the terms of reference of the Board Committees,
b) the most important activities of the committees during the year, and the number of meetings held by each committee, and
c) the names of the members of each committee, including the Chairmen of the Committees, as well as information on which members are independent members and which members have special qualifications.


Topdanmark has set up a joint Audit Committee in accordance with the rules of the Danish Audit Act.

Topdanmark has set up a joint Remuneration Committee in accordance with the relevant rules of the Danish Executive Order on wage policy and remuneration at insurance companies and insurance holding companies.

Topdanmark has set up a Nomination Committee for the whole Topdanmark Group.

The terms of reference for the committees, their rules of procedure and most important activities have been published on Topdanmark's website. The website also discloses in-formation on the number of meetings held by the committees, the names, qualifications and independence of the members, the Chairmen of the committees and the members with special qualifications, when specifically required.


3.4.2. The Committee recommends that a majority of the members of a Board Committee be independent.

Topdanmark's Board Committees comprise those Board members considered most suitable by the Board of Directors to attend to the function concerned.

The Audit Committee has three members. Within the last three years, Lone Møller Olsen, Chairman of the Audit Committee, has been a partner at Deloitte, Topdanmark’s external auditor. Consequently, Lone Møller Olsen does not meet the definition of independence set out by the Committee on Corporate Governance. However, since Lone Møller has left Deloitte and has not worked with Topdanmark for the last 20 years, the Board of Directors finds that Lone Møller Olsen is sufficiently independent. One member has been on Topdanmark’s Board of Directors for more than 12 years and the other member represents the interests of a controlling shareholder. Thus, none of these members of the Audit Committee meet the definition of independence set out by the Committee on Corporate Governance.

The Remuneration Committee has three members, and the Nomination Committee has two members. These committees comprise Topdanmark's Chairmanship and in respect of the Remuneration Committee, also a Board member elected by employees in accordance with the statutory rules. Topdanmark's Chairmanship comprises a Chairman who represents the interests of a controlling shareholder and a Deputy Chairman who has been a member of Topdanmark’s Board of Directors for more than 12 years. Consequently, the majority of the members of the Remuneration and Nomination Committee is not independent.

The Board of Directors believes that it has greater value for Topdanmark to ensure that the Board Committees comprise those persons who are best qualified and to ensure a balance in the committees between members attending to the interest of Topdanmark’s controlling shareholder and members who, due to high seniority and thor-ough knowledge of the insurance business and/or audit conditions, have extensive knowledge of Topdanmark and the ability to enter into critical dialogue with the repre-sentatives of the controlling shareholder in the committees, rather than ensuring that the majority of the members of a small committee meets the definition of independence set out by the Committee on Corporate Governance.


3.4.3. The Committee recommends that the Board of Directors set up a formal Audit Committee composed such that

a) the Chairman of the Board of Directors is not Chairman of the Audit Commit-tee, and
b) between them, the members should possess such expertise and experience as to provide updated insight into and experience in the financial, accounting and audit aspects of companies whose shares are admitted to trading on a regulated market.


Topdanmark has set up a joint Audit Committee for the Topdanmark Group in accordance with the rules of the Danish Audit Act.

The Chairman of the Board of Directors is not a member of or Chairman of the Audit Committee.

The Board of Directors believes that between them, the members of the Audit Committee possess such an amount of expertise and experience as to provide updated insight into and experience in the financial, accounting and audit conditions of companies whose shares are admitted to trading on a regulated market.

3.4.4. The Committee recommends that, prior to approval of the Annual Report and other financial reports, the Audit Committee monitors and reports to the Board of Directors on:

a) significant accounting policies,
b) significant accounting estimates,
c) related party transactions, and
d) uncertainties and risks, including in relation to the outlook for the current year.


The Audit Committee monitors and reports to the Board of Directors on material account-ing policies, significant accounting estimates, related party transactions and uncertainties and risks. The final decision on these matters continues to be made by Topdanmark's en-tire Board of Directors, also after the establishment of the Audit Committee.

Additionally the work of Topdanmark's Audit Committee focuses on accounting processes and risk management.

The Audit Committee reports to the Board of Directors at each Board meeting.

3.4.5. The Committee recommends that the Audit Committee:

a) annually assesses the need for an internal audit, and in such case, makes rec-ommendations on selecting, appointing and removing the head of the internal audit function and on the budget of the internal audit function, and
b) monitors the Executive Board’s follow-up on the conclusions and recommen-dations of the internal audit function.


As a financial services company with more than 125 full-time employees Topdanmark shall have an internal audit function. The internal audit function has been appointed by and refers to the Board of Directors.

The Audit Committee considers and formulates recommendations on the head of the in-ternal audit function and on the budget of the internal audit function.

At each Audit Committee meeting, the Audit Committee receives a report on the Execu-tive Board's follow-up on the conclusions and recommendations of the internal and exter-nal audit functions.

3.4.6 The Committee recommends that the Board of Directors establish a Nomi-nation Committee chaired by the Chairman of the Board of Directors with at least the following preparatory tasks:

a) describe the qualifications required by the Board of Directors and the
Executive Board for a specific membership, and state the time expected to be spent on carrying out the membership, as well as assessing the competences, knowledge and experience of the two governing bodies combined,
b) annually assess the structure, size, composition and results of the Board of Directors and the Executive Board, as well as recommending any changes to the Board of Directors,
c) annually assess the competences, knowledge and experience of the individual members of management, and report to the Board of Directors in this respect,
d) consider proposals from relevant persons, including shareholders and mem-bers of the Board of Directors and the Executive Board for candidates for the Board of Directors and the Executive Board, and
e) propose an action plan to the Board of Directors on the future composition of the Board of Directors, including proposals for specific changes.


Topdanmark has set up a joint Nomination Committee for the entire Topdanmark Group.

The nomination committee consists of Topdanmark's Chairmanship. The Chairman of the
Board of Directors is Chairman of the Nomination Committee.

The Nomination Committee is in charge of the preparatory work for the decisions made by the Board of Directors on the structure and composition of the Board of Directors and the Executive Board.

3.4.7. The Committee recommends that the Board of Directors establish a Remu-neration Committee with at least the following preparatory tasks:

a) to recommend the remuneration policy (including the general guidelines for incentive-based remuneration) to the Board of Directors and the Executive Board for approval by the Board of Directors prior to approval by the Annual General Meeting,
b) make proposals to the Board of Directors on remuneration for members of the Board of Directors and the Executive Board, as well as ensuring that the re-muneration is in compliance with the Company’s remuneration policy and the assessment of the performance of the persons concerned. The Committee should have information about the total amount of remuneration that members of the Board of Directors and the Executive Board receive from other companies in the Group, and
c) recommend a remuneration policy applicable for the Company in general.


Topdanmark has set up a joint Remuneration Committee for the entire Topdanmark Group.

The Board of Directors has adopted a working plan for the Remuneration Committee providing that the Committee submits the remuneration policy including general guide-lines for performance-related pay for approval of the Board of Directors prior to the approval of the AGM, submits proposals to the Board of Directors for remuneration of the Board of Directors, Executive Board, General Managers and other employees of similar or higher ranks, decides the guidelines for reporting on the observance of the remuneration policy, receives and reviews reporting on the observance of the remuneration policy, remuneration of the management of the risk organisation and the management of the part of the organisation that is otherwise in charge of control and audit, and reviews the Annual Report in order to check its information on the remuneration of the Board of Directors.

Topdanmark’s remuneration policy is applicable to the Topdanmark Group in general.

3.4.8. The Committee recommends that the Remuneration Committee do not consult with the same external advisers as the Executive Board of the Company

The Executive Board, Board of Directors and Remuneration Committee do not use external advisers when deciding Topdanmark's remuneration policy.

3.5. Evaluation of the performance of the Board of Directors and the Executive Board

3.5.1. The Committee recommends that the Board of Directors establish an evaluation procedure where contributions and results of the Board of Directors and the individual members, as well as co-operation with the Executive Board are annually evaluated. Significant changes deriving from the evaluation should be included in the Management Review or on the Company’s website.


The Board of Directors regularly evaluates its work and the performance and achievements of the entire Board and each member, as well as its co-operation with the Executive Board.

On the basis of individual interviews between the Chairman and each Board member and a questionnaire about each Board member’s skills, the Board of Directors evaluates itself at the annual Board seminar. The Chairman of the Board of Directors is in charge of the evaluation without the participation of the Executive Board.
The evaluation is included in the rules of procedure and the work plan of the Board of Di-rectors.
The evaluation process and significant resulting changes are described in the Annual Re-port and on the Company's website.

3.5.2. The Committee recommends that in connection with preparation of the Annual General Meeting, the Board of Directors consider whether the number of members is appropriate in relation to the requirements of the Company. This should help ensure a constructive debate and an efficient decision-making pro-cess in which all members are given the opportunity to participate actively.

Topdanmark's Board of Directors comprises six members elected by the AGM and three elected by the employees.

The Board of Directors believes that this size of the Board allows a quorum and efficiency as well as sufficient dissemination on different skills.

The Board of Directors evaluates regularly, and at least when nominating candidates to the annual election of Board members at the Company's AGM, whether the number of Board members continues to be appropriate in relation to the requirements of the Company.

3.5.3. The Committee recommends that at least once every year, the Board of Directors evaluate the work and performance of the Executive Board in accordance with predefined clear criteria.

3.5.4. The Committee recommends that the Executive Board and the Board of Directors establish a procedure according to which their co-operation is evaluated annually through a formalised dialogue between the Chairman of the Board of Di-rectors and the Chief Executive Officer, and that the outcome of the evaluation be presented to the Board of Directors.


The Board of Directors regularly evaluates the work and performance of the Executive Board as well as the co-operation between the Executive Board and itself and discusses it at least once a year at the annual Board seminar without the participation of the Executive Board.

The evaluation is based on, among other things, regular meetings between the CEO and the Chairman of the Board of Directors, a report to the Board of Directors at the annual Board seminar and individual interviews between the Chairman and each Board member.

The evaluation is included in the rules of procedure and the work plan of the Board of Directors. It is described in both the Annual Report and on the Company's website.

4. Remuneration of management

4.1 Form and content of the remuneration policy

4.1.1. The Committee recommends that the Board of Directors prepare a clear and transparent remuneration policy for the Board of Directors and the Executive Board, including:

a) detailed description of the components of the remuneration for members of the Board of Directors and the Executive Board,
b) the reasons for choosing the individual components of the remuneration, and
c) a description of the criteria on which the balance between the individual components of the remuneration is based. The remuneration policy should be approved by the Annual General Meeting and published on the Company’s website.

The Board of Directors has adopted a remuneration policy for itself, the Executive Board, significant risk takers and a number of other employees. The Board of Directors believes that Topdanmark's remuneration policy is clear and easily understandable.

The remuneration policy has been adopted by the AGM and published on the Company's website.

The AGM adopts the remuneration to be paid to the Board of Directors.

In his speech, the Chairman of the Board of Directors explains the remuneration paid to the Company's Board of Directors and Executive Board in accordance with the rules of the Danish Executive Order on wage policy and remuneration at insurance companies and insurance holding companies.

The remuneration policy includes a detailed description of the components of the remuneration for the Board of Directors and Executive Board. The remuneration policy also includes a reason for choosing the individual components of the remuneration and information on the criteria on which the balance between the individual components of the remuneration is based.

4.1.2. The Committee recommends that, if the remuneration policy includes variable components,

a) limits be set on the variable components of the total remuneration package,
b) a reasonable and balanced linkage be ensured between remuneration for governing body members, expected risks and the value creation for shareholders in the short and in the long term,
c) there be clarity about performance criteria and measurability for award of variable components,
d) there be criteria ensuring that qualifying periods for variable components in remuneration agreements are longer than one calendar year, and
e) an agreement is made which, in exceptional cases, entitles the Company to re-claim in full or in part variable components of remuneration that were paid on the basis of data, which proved to be misstated.
 

Topdanmark's remuneration structure which is described in both the Annual Report and on the Company's website, is intended to optimise value creation at Group level. The remuneration to the Executive Board and a number of executives is based on a fixed basic salary. A fixed share, 10%, is paid as share options.

As the expected value creation at Group level is reflected in the share price, the share option scheme encourages the executives to be more holistic in their approach to value creation. Those participating in the share option scheme do not receive performance-related bonuses.

Topdanmark believes that performance-related bonus schemes may encourage executives to manage their business responsibilities to their own benefit, which in certain cases could conflict with Group priorities.

Topdanmark's remuneration agreements take into account the rules, including claw-back rules, of the Danish Financial Business Act.

4.1.3. The Committee recommends that remuneration of members of the Board of Directors does not include share options or warrants.

The remuneration of Topdanmark’s Board of Directors does not include share options or warrants.

4.1.4. The Committee recommends that if share-based remuneration is provided, such programmes be established as revolving programmes, i.e. the options are granted periodically and should have a maturity of at least three years from the date of allocation.

As described in Topdanmark's remuneration policy published on the Company's website, its share option scheme for the Executive Board and a number of the heads of the business sectors and administrative departments is revolving. The options may not be exercised any earlier than subsequent to the publication of the first interim results announced three years after the options were acquired. The strike price is equivalent to the market price on the last trading date in the financial year immediately preceding the granting of options, plus 10%.

4.1.5. The Committee recommends that agreements on termination payments should not amount to more than two years’ annual remuneration.

The maximum termination payments in Topdanmark will represent the last two years' remuneration.  

4.2. Disclosure of the remuneration policy

4.2.1. The Committee recommends that the Company’s remuneration policy and compliance with this policy be explained and justified annually in the Chairman’s statement at the Company’s Annual General Meeting.

The Company's remuneration policy and compliance with this policy is explained and justified in the speech of the Chairman of the Board of Directors at the Company's AGM in accordance with the rules of the Danish Executive Order on wage policy and remuneration at insurance companies and insurance holding companies.

4.2.2. The Committee recommends that the proposed remuneration for the Board of Directors for the current financial year be approved by the shareholders at the Annual General Meeting.

The remuneration paid to the Board of Directors for the current financial is reviewed at the AGM.

4.2.3. The Committee recommends that the total remuneration granted to each member of the Board of Directors and the Executive Board by the Company and other companies in the group, including information on the most important con-tents of retention and retirement/resignation schemes, be disclosed in the Annual Report and that the linkage with the remuneration policy be explained.

In accordance with the provisions of the Danish Financial Business Act, in its Annual Report, Topdanmark discloses information on the remuneration paid to the Board of Directors and the Executive Board at an individual level.

Topdanmark discloses information on the most important contents of retention and retirement/resignation schemes in accordance with the rules of the Danish Accounting Order.

5. Financial reporting, risk management and audits

5.1 Identification of risks and transparency about other relevant information

5.1.1. The Committee recommends that the Board of Directors consider and in the management’s review account for the most important strategic and business-related risks, risks in connection with the financial reporting as well as for the Company’s risk management.

The Board of Directors regularly discusses, and particularly in relation to the relevant rules for insurance companies on Solvency II, Topdanmark's risk profile, including the most important risks associated with the realisation of the Company's strategy and over-all goals, as well as the risks associated with financial reporting. The risk assessment made by the Board of Directors is included in Topdanmark’s annual risk assessment reported to the Danish FSA.

Topdanmark believes that the Company’s future growth should be created by accepting primarily business risks and to a lesser extent financial risks.

Based on reporting and a discussion paper made by the Executive Board, the Board of Directors regularly discusses Topdanmark's risk management, ensuring that efficient risk management systems have been established.

Additionally, the risk profile and risk management of the Company are thoroughly re-viewed at the Audit Committee meetings.

At Topdanmark, risk management is co-ordinated by the cross-organisational risk management function. The risk management function and the decentralised risk management units refer to the Risk Committee. The Risk Committee reports to the Board of Directors at each Board meeting. Once a year, Topdanmark prepares a risk report available on the Company’s website.

Furthermore, Topdanmark has established a compliance function in order to ensure, among other things, knowledge and observance of all relevant acts, rules etc. The compliance function reports to the Board of Directors via the Audit Committee.

The establishment of a risk management policy etc. is included in the rules of procedure and the work plan of the Board of Directors.

Topdanmark's internal auditors control and report to the Board of Directors whether the risk policy adopted on the acceptance of, for example, business risks, including reinsurance cover, meets the frameworks set out by the Board of Directors. Furthermore, they check that the investment restrictions set out by the Board of Directors are observed.

5.2. Whistle blower scheme

5.2.1. The Committee recommends that the Board of Directors decide whether to establish a whistle blower scheme for expedient and confidential notification of possible or suspected wrongdoing.


Topdanmark established a whistle blower scheme in 2012.

5.3. Contact to auditor

5.3.1. The Committee recommends that the Board of Directors ensure regular dialogue and exchange of information between the auditor and the Board of Directors, including that the Board of Directors and the Audit Committee at least once a year meet with the auditor without the Executive Board present. This also applies to the internal auditor, if any.


Topdanmark's Board of Directors has regular contact with both the internal and external auditors.

The internal and external auditors report to the Board of Directors in audit reports. Furthermore, internal auditors attend the Audit Committee meetings on a permanent basis in February and November and additional meetings, if required.

Internal and external auditors attend, on a permanent basis, the Board meeting where the Annual Report is being reviewed and approved. In continuation of this meeting, the Board of Directors meets with the internal and external auditors without the presence of the Executive Board. Furthermore, the Audit Committee/the Chairman of the Audit Committee meets with the auditors without the presence of the Executive Board.

5.3.2. The Committee recommends that the audit agreement and auditors’ fee be agreed between the Board of Directors and the auditor on the basis of a recommendation from the Audit Committee.

The auditor agreement and the auditors' fee, including the framework for the external auditors' provision of non-audit services and the audit plan and budget of the internal audit function, are adopted by the Board of Directors on the basis of a recommendation from the Audit Committee.