Side 12
12 Annual report A/S Storebælt Corporate Governance A/S Storebælt is 100 per cent owned by Sund & Bælt Holding A/S. Through its 100 per cent ownership of Sund & Bælt Holding A/S, the Danish State is Storebælt A/S’s supreme authority and exercises its ownership in accordance with the legislative guidelines set out in the publication, "The State’s ownership policy”. The two-tier management structure consists of a Board of Directors and a Management Board, which are independent of each other. No individual is a member of both boards. A/S Storebælt endeavours to ensure that the company is managed in accordance with the principles of sound corporate governance at all times. NASDAQ Copenhagen’s corporate governance recommendations correspond to the recommendations from the Committee for Corporate Governance updated in November 2017. A/S Storebælt generally complies with NASDAQ Copenhagen’s corporate governance recommendations. Exceptions to the recommendations are owing to the Group’s special ownership structure where the Danish State is the sole shareholder. The exceptions to the recommendations are: In connection with elections to the Board of Directors, the shareholder assesses the necessary expertise that the Board should possess. There is no nomination committee. The shareholder determines the remuneration of the Board of Directors while the Board of Directors decides the salaries of the Management Board. Performance-related remuneration or bonuses for the Management Board and Board of Directors are not employed. No remuneration committee has, therefore, been established or a remuneration report prepared. Members of the Board of Directors elected by the Annual General Meeting stand for election every second year. According to the recommendations, members should stand for election every year. A/S Storebælt meets the diversity requirements at senior management levels. There is a 33/67% distribution between the genders among board members. The company has set up an Audit Committee which, as a minimum meets half-yearly. The members of the Audit Committee comprise Ruth Schade (Chair) and Peter Frederiksen. The Board of Directors held four meetings during the year and all members were considered independent in 2019. In relation to significant concurrent positions held by the senior management outside the company, please refer to the section Board of Directors, Board of Management and Senior Executives. The Board of Directors conducted a self-evaluation in 2019 in accordance with the State's ownership policy and Corporate Governance recommendations. The Chair has submitted the conclusions of the self-evaluation to the company's owner – The Ministry of Transport and Housing. The recommendations from the Committee for Corporate Governance are available at www.corporategovernance.dk CSR – Corporate Social Responsibility Statutory statement regarding Corporate Social Responsibility, c.f. section 99a of the Danish Financial Statements Act. As regards the company’s formal compliance with section 99a of the Danish Financial Statements Act concerning a statement on social responsibility, please refer to the parent company’s management report 2019 under CSR – Corporate Social Responsibility, Corporate Governance, Environment and Climate, Employees and Targets for CSR work in 2020. Statutory statement regarding the underrepresented gender in accordance with section 99b of the Danish Financial Statements Act. There is gender balance at top management level, and no target figures have been set for this. Moreover, as the company has no employees, no policy has been established for increasing the underrepresented gender at other management levels. The annual report for Sund & Bælt Holding A/S is available at www.sundogbaelt.dk/årsrapport
Side 13
A/S Storebælt Annual report 13 Risk management and control environment Certain events may prevent A/S Storebælt from achieving its objectives in whole or in part. The consequences and likelihood of such events occurring is an element of risk of which the company is well aware. Some risks can be managed and/or reduced by the company itself while others are external events over which the company has no control. The company has identified and prioritised certain risks based on a holistic approach. As part of the work with these issues, the Board of Directors receives a report on an annual basis. The greatest risk to accessibility is prolonged disruption to a traffic link caused by a ship colliding with a bridge, terrorist activity, flooding or the like. The likelihood of such incidents is remote, but the potential consequences are significant. The potential financial losses for the company from such events, including operating losses for up to two years, are, however, covered by insurances. A/S Storebælt’s objective is to ensure that safety on the links should be high and at least as high as on similar Danish facilities. So far, this objective has been met and the proactive safety work continues. The work is supported by regularly updated risk analyses. In the light of a number of accidents in the autumn of 2018, in December of the same year, A/S Storebælt initiated a review of further initiatives on the motorway section across Storebælt to increase accessibility and safety of road users and employees. The main conclusions from the review include proposals for a number of measures, including improved detection of incidents on the bridge, more signage related to incidents, and the option to direct traffic around incidents that obstruct traffic on the bridge. The planning and procurement of the initiatives is ongoing with a view to continuous and rapid implementation over the coming years. With regard to the tragic train accident on the West Bridge on 2 January 2019, the Accident Investigation Board of Denmark found that the main reason for the accident was that the semi-trailer’s main bolt was not secured to the freight wagon. Wind tunnel tests conducted by DTU for the Accident Investigation Board Denmark show that wind speed data from A/S Storebælt’s wind meters on the West Bridge were accurate. At the same time, it was confirmed that the average wind speed on the West Bridge did not exceed the limits for the passage of freight trains, and that a correctly secured trailer would not be able to blow free from the wagon with the measured wind force. One of the recommendations of the Accident Investigation Board of Denmark is that the Danish Transport, Building and Housing Authority ensures that Banedanmark and A/S Storebælt analyse the need for updated safety requirements for wind restrictions on Storebælt. In view of climate change, which is increasing the risk of generally elevated water levels and an increased risk of dangerous weather conditions, the risk of flooding to the infrastructure facilities is assessed on an ongoing basis. In the past year, the dikes on Sprogø have been raised and similar projects have also been planned for other parts of the facility. In partnership with the relevant authorities, A/S Storebælt maintains a comprehensive contingency plan, including an internal crisis management programme for handling accidents etc. on the company’s traffic facilities. The programme is tested regularly through exercises. Long-term traffic development is a significant factor in the repayment period of the debt, c.f. notes 22 and 23, where the calculations and uncertainty factors are described. In addition to the general uncertainties that are inherent in such long-term forecasts, there is a special risk related to adjustment to prices introduced by the authorities, e.g. in the form of EU directives. The introduction of road taxes may also impact on the bridges’ market position. Development in the long-term maintenance and reinvestment costs is subject to some uncertainty too. A/S Storebælt works proactively and systematically to reduce such factors and it is unlikely that these risks will have a major effect on the repayment period. Work on holistic risk management has defined and systemised certain risks linked to the company’s general operations. These include the risk of computer breakdowns or a failure of other technical systems, unauthorised access to computer systems, delays to, and cost increases for, maintenance work etc. These risks are handled by day-to-day management and the line organisation. A/S Storebælt’s risk management and internal controls in connection with the financial statements and financial reporting are intended to minimise the risk of material error. The internal control system contains clearly defined roles and areas of responsibility, reporting requirements and procedures for attestation and approval. Internal controls are examined by the auditors and reviewed by the Board of Directors through the Audit Committee.
