Corporate Governance

In recent years, the debate about the importance of good Corporate Governance has grown, both in Denmark and abroad. In Denmark, the Committee on Corporate Governance is responsible for ongoing examination of a range of issues considered to be part of proper, responsible, corporate management. At TORM, we are pleased to support the ultimate goal of this ongoing debate: the achievement of better, more responsible corporate management.

In our effort to communicate clearly with our international investors, we believe that it is helpful to describe how corporate governance in Denmark is different from that which applies in the US.
There are a number of ways in which key differences between Danish and US corporate management practices affect our business:

- TORM’s Board of Directors is elected at our annual general meeting (AGM), and is entirely composed of people who are not engaged in the daily management of the company.

- The function of non-executive members is to oversee the work of the management, who are, in turn, responsible for the daily management of the business. They follow the guidelines set by our Board of Directors. By Danish law, the Chairman of the Board of Directors cannot be a Managing Director, CEO, or similar of TORM.

- Danish law also stipulates that employees may elect members of the Board. In accordance with the legislation, employee representatives have the same rights, duties and responsibilities as the other members of the Board.

- At the Company’s annual general meeting held on 22 April 2009, the shareholders adopted overall guidelines for the Company’s incentive schemes to members of the Board of Directors and Management Board, cf. Section 69b of the Danish Companies Act. Click here to download the incentive scheme.

 - In accordance with Danish corporate governance, each share in TORM accords the shareholder a single vote. We regard each share as equal – that is, there are no different ‘classes’ of shares.

- Under the terms of our NASDAQ listing, TORM is required to comply with the US Sarbanes-Oxley Act. Among other things, this requires that public companies such as TORM develop and document disclosure controls and procedures and that the CEO and CFO certify the truthfulness of financial statements.