2023

Statutory statement regarding corporate governance, cf. the Danish Financial Statements Act, section 107b

The statutory statement regarding corporate governance of RIAS A/S is a part of the management's review in the annual report for 2022/23. The statement's section on the code for corporate governance is not covered by the audit opinion about the management's review in the annual report of RIAS A/S. The information about the company's control and risk management systems and the composition of the company's management bodies etc. is covered by the audit opinion about the management's review in the company's annual report.

Code for corporate governance

In December 2020, the Committee on Corporate Governance in Denmark has published new recommendations to be used for financial years starting on the 1st of January or later.

In connection with the publishing of the annual report for 2022/23, RIAS A/S has prepared a statement that is based on the recommendations of 2nd of December 2020 published by the Committee on Corporate Governance. This creates the best possible overview of which recommendations RIAS A/S complies fully with and which recommend-dations the company has chosen not to comply with or is still working on.

Links to statement regarding corporate governance:

Corporate Governance Report 2022/23 Report
The Committee on Corporate Governance in Denmark Recommendations December 2020

 

Good corporate governance

The management of the company places emphasis on good company management and is continuously making an effort to improve the management of the company. The overall framework for the management of RIAS A/S has been arranged with a view to ensuring that the company lives up to its obligations towards shareholders, customers, employees and authorities as well as other stakeholders as well as possible and supporting the long-term value creation.

The board of directors of RIAS A/S is constantly working on ensuring that the company lives up to the policies and procedures drawn up by the Committee on Corporate Governance in Denmark and NASDAQ OMX Copenhagen. The board of directors discusses how the company's corporate governance in practice can always ensure that the management of RIAS A/S is of the highest quality and that the work of the board supports the company's future business potential. A key factor is transparency.

The board of directors has chosen to publish the statutory statement regarding corporate governance cf. the Danish Financial Statements Act, section 107b, on the company website. Thus, the views of the board of directors with regard to NASDAQ Copenhagen's recommendations for good corporate governance are available on the website of RIAS A/S. The statutory statement regarding corporate governance covers the accounting period from the 1st of October 2022 to the 30th of September 2023 and is part of the management's review.

The management has considered NASDAQ Copenhagen's recommendations regarding corporate governance carefully and the board of directors and the management have decided to derogate from the code and therefore take different steps in the following areas:

No. Recommendation Reasons for not complying with the recommendations:
1.1.3.

The Committee recommends that the company publishes quarterly reports.

RIAS A/S only publishes Half Year reports and Interim Reports – due to cost and competition considerations.
1.2.1 The Committee recommends that the board of directors organises the company’s general meeting in a manner that allows shareholders, who are unable to attend the meeting in person or are represented by proxy at the general meeting, to vote and raise questions to the management prior to or at the general meeting. The Committee recommends that the board of directors ensures that shareholders can observe the general meeting via webcast or other digital transmission. If there is open to the public for a general meeting, there will be no digital transmission.
3.1.1.

The Committee recommends that the board of directors on an annual basis reviews and in the management commentary and/or on the company’s website states

  • which qualifications the board of directors should possess, collectively and individually, in order to perform its duties in the best possible manner, and
the composition of and diversity on the board of directors.		 RIAS A/S’ Board of Directors reviews the work and qualifications of the Board of Directors on an on-going basis. The qualifications of the Board members are not published separately, but the Board of Directors endeavours to ensure diversity of qualifications in the Board of Directors.
3.1.4.

The Committee recommends that the notice convening general meetings, where election of members to the board of directors is on the agenda - in addition to the statutory items - also includes a description of the proposed candidates’

  • qualifications,
  • other managerial duties in commercial undertakings, including board committees,
  • demanding organisational assignments and
independence.		 Information about the qualifications of candidates nominated for the Board of Directors forms part of the meeting material accompanying the agenda of the annual general meeting. RIAS A/S has one main shareholder, who owns all the A-shares and thereby represents more than 50% of the votes, and a row of minority shareholders. The ownership structure influences the composition of the Board of Directors and this is reason for partially complying with this recommendation.
3.2.1.

The Committee recommends that at least half of the members of the board of directors elected in general meeting are independent in order for the board of directors to be able to act independently avoiding conflicts of interests.

In order to be independent, the member in question may not:

  • be or within the past five years have been a member of the executive management or an executive employee in the company, a subsidiary or a group company,
  • within the past five years have received large emoluments from the company/group, a subsidiary or a group company in another capacity than as member of the board of directors,
  • represent or be associated with a controlling shareholder,
  • within the past year have had a business relationship (e.g. personally or indirectly as a partner or an employee, shareholder, customer, supplier or member of a governing body in companies with similar relations) with the company, a subsidiary or a group company, which is significant for the company and/or the business relationship,
  • be or within the past three years have been employed with or a partner in the same company as the company’s auditor elected in general meeting,
  • be a CEO in a company with cross-memberships in the company’s management,
  • have been a member of the board of directors for more than twelve years, or
  • be closely related to persons, who are not independent, cf. the above-stated criteria.
Even if a member of the board of directors does not fall within the above-stated criteria, the board of directors may for other reasons decide that the member in question is not independent.		 RIAS A/S has one main shareholder, who owns all the A-shares and thereby represents more than 50% of the vote, and a row of minority shareholders. The ownership structure influences the composition of the Board of Directors and this is reason for not complying with this recommendation.
3.4.1.

The Committee recommends that the management describes in the management commentary:

  • the board committees’ most significant activities and number of meetings in the past year, and
  • the members on the individual board committees, including the chairperson and the independence of the members of the committee in question.
In addition, it is recommended that the board committees’ terms of reference are published on the company’s website.		 Due to the size of the Board of Directors and the Board Members’ qualifications, the Board of Directors has decided not to establish a board committee. The Board of Directors itself manages all such functions of such board committee.
3.4.2. The Committee recommends that board committees solely consist of members of the board of directors and that the majority of the members of the board committees are independent. RIAS A/S has one main shareholder, who owns all the A-shares and thereby represents more than 50% of the votes, and a row of minority shareholders. The ownership structure influences the composition of the Board of Directors and this is reason for not complying with this recommendation.
3.4.3.

The Committee recommends that the board of directors establishes an audit committee and appoints a chairperson of the audit committee, who is not the chairperson of the board of directors. The Committee recommends that the audit committee, in addition to its statutory duties, assists the board of directors in:

  • supervising the correctness of the published financial information, including accounting practices in significant areas, significant accounting estimates and related party transactions,
  • reviewing internal control and risk areas in order to ensure management of significant risks, including in relation to the announced financial outlook,
  • assessing the need for internal audit,
  • performing the evaluation of the auditor elected by the general meeting,
  • reviewing the auditor fee for the auditor elected by the general meeting,
  • supervising the scope of the non-audit services performed by the auditor elected by the general meeting, and
  • ensuring regular interaction between the auditor elected by the general meeting and the board of directors, for instance, that the board of directors and the audit committee at least once a year meet with the auditor without the executive management being present.

If the board of directors, based on a recommendation from the audit committee, decides to set up an internal audit function, the audit committee must:

  • prepare terms of reference and recommendations on the nomination, employment and dismissal of the head of the internal audit function and on the budget for the department,
  • ensure that the internal audit function has sufficient resources and competencies to perform its role, and
supervise the executive management’s follow-up on the conclusions and recommendations of the internal audit function.		 Due to the size of the Board of Directors, the Board of Directors itself manages all functions of the audit committees. The Board of Directors in RIAS A/S evaluates that the audit committee possesses sufficient financial qualifications, including special knowledge of accounting and auditing issues in a company noted at the stock exchange. Due to the size of the Board of Directors, the Chairman has also been elected Chairman of the audit committee.
3.4.4.

The Committee recommends that the board of directors establishes a nomination committee to perform at least the following preparatory tasks:

  • describing the required qualifications for a given member of the board of directors and the executive management, the estimated time required for performing the duties of this member of the board of directors and the competencies, knowledge and experience that is or should be represented in the two management bodies, 
  • on an annual basis evaluating the board of directors and the executive management’s structure, size, composition and results and preparing recommendations for the board of directors for any changes,
  • in cooperation with the chairperson handling the annual evaluation of the board of directors and assessing the individual management members’ competencies, knowledge, experience and succession as well as reporting on it to the board of directors,
  • handling the recruitment of new members to the board of directors and the executive management and nominating candidates for the board of directors' approval,
  • ensuring that a succession plan for the executive management is in place,
  • supervising executive managements’ policy for the engagement of executive employees, and
supervising the preparation of a diversity policy for the board of directors’ approval.		 Please refer to the above mentioned recommendation.
3.5.1.

The Committee recommends that the board of directors once a year evaluates the board of directors and at least every three years engages external assistance in the evaluation. The Committee recommends that the evaluation focuses on the recommendations on the board of directors’ work, efficiency, composition and organisation, cf. recommendations 3.1.-3.4. above, and that the evaluation as a minimum always includes the following topics:

  • the composition of the board of directors with focus on competencies and diversity
  • the board of directors and the individual member’s contribution and results,
  • the cooperation on the board of directors and between the board of directors and the executive management,
  • the chairperson’s leadership of the board of directors,
  • the committee structure and the work in the committees,
  • the organisation of the work of the board of directors and the quality of the material provided to the board of directors, and
the board members’ preparation for and active participation in the meetings of the board of directors.		 The company’s chairman and the vice-chairman regularly assess whether the Board of Director’s composition and cooperation and the individual members’ preparation for and active participation in the meetings are satisfactory, just as the Board regularly accesses the organisation of the Board’s work and the quality of the Board’s documentation. However, due to the size of the company, a formalized board evaluation is not carried through, which is why external assistance is not included either for this.
3.5.2. The Committee recommends that the entire board of directors discusses the result of the evaluation of the board of directors and that the procedure for the evaluation and the general conclusions of the evaluation are described in the management commentary, on the company’s website and at the company’s general meeting. Please refer to the above mentioned recommendation.
4.1.2. The Committee recommends that share-based incentive schemes are revolving, i.e. that they are periodically granted, and that they primarily consist of long-term schemes with a vesting or maturity period of at least three years. The Executive Board does not receive share-based remuneration.

 

Composition of the company's management bodies and their committees and their functions

Tasks and responsibilities of the board of directors

The work of the board of directors is outlined in rules of procedure, which are evaluated at least once a year. Thus, RIAS A/S complies with the recommendation of adapting the rules of procedure to the needs of the company. The board of directors convenes four times a year or more, as needed. This process ensures that the management can react quickly and efficiently to external conditions. During the financial year 2022/23, 4 meetings have been held, including an extraordinary general meeting due to strategic considerations regarding the structure of the company.

Composition of the board of directors

The board of directors consists of six members, of which two are staff-elected in the company. The board members elected at the general meeting are elected for one year at a time.

The board of directors has been composed on the basis of a prioritised wish for professional experience. Several of the members of the board elected at the general meeting, excluding employee representatives as defined in the recommendations, are independent. The board of directors has evaluated the personal capacity of each board member and finds that they perform their tasks in the board of directors of RIAS A/S adequately.

Management

The management is appointed by the board of directors, which determines the terms and conditions of employment of the management. The management is responsible for the day-to-day running of RIAS A/S, including the development of RIAS A/S with regard to activities and operation as well as results and internal matters. The board of directors' delegation of responsibility to the management is outlined in the company's rules of procedure and the regulations of the Danish Companies Act. The management of RIAS A/S consists of two people.

The main elements of the company's internal control and risk management systems in connection with financial reporting

The board of directors complies with the recommendations that the main business-related risks should be identified, that a plan for the company's risk management to be approved by the board of directors should be prepared and that the management should continuously report to the board of directors with a view to the board of directors being able to systematically follow the development within the main risk areas. The complete risk factors of RIAS A/S are listed on page 36 of the annual report.

The internal control and risk management of RIAS A/S in connection with the financial reporting process internally as well as externally has the purpose of ensuring:

  • that the financial reporting gives a true and fair view without significant misstatement in accordance with current legislation, standards and other regulation
  • that appropriate accounting policies are chosen and used and that accounting estimates that are reasonable according to the circumstances are performed.

The risk assessment is carried out through a top down method that identifies material items of high risk and special areas of significant risk. The implemented control procedures are based on the risk assessment and are structured to contain the control activities that should as a minimum be carried out. The purpose of the control activities is to ensure that potential errors are avoided, discovered and corrected in time during the financial reporting process. The control procedures contain manual as well as automatic controls.

The framework of the accountant's work, including accounting-related tasks as well as non-accounting-related services, is regularly agreed upon between the board of directors and the accountant upon recommendation from the management. In consultation with management, the board of directors also carries out an annual assessment of the accountant's independence and competence.