Energy is an integrated part of everyday life and a prerequisite for almost all that people do and it is DONG Energy’s task to contribute with solutions to the energy challenges. We procure, produce, distribute and trade in energy - and we do it in a manner that is responsible towards this and future generations. We are a part of all the phases of the energy from production to consumption. That givs the necessary competencies to develop our company. DONG Energy is one of the leading energy groups in Northern Europe. We are headquartered in Denmark. Our business is based on procuring, producing, distributing and trading in energy and related products in Northern Europe.
DONG Energy has a long-term vision:
To provide clean and reliable energy. This is the goal we are headed for and are working towards every day through new investments and ongoing adjustments.
With the 85/15 strategy we take a big step
Today, 85 percent of DONG Energy’s heat and power is produced by fossil fuels – mainly coal. Now we have set ourselves a goal: Over the next 30 years we will reduce CO2 emissions per produced kWh to 15 percent of current levels. We handle the greatest reduction first. Within the next 10 years we will halve CO2 emissions per kWh produced.
In order to reduce CO2 emissions, we have decided to suspend the production at 25 percent of our coal-fired power station capacity. At the same time we have stopped developing new coal fired power stations – and we plan to convert some of the remaining coal-fired power station units for biomass.
Nature has given us ample wind resources. Today, DONG Energy is a market leader in the development and construction of offshore wind farms. We will strengthen this position.
Natural gas makes the journey reliable
Natural gas is in demand, available and can be stored – and far less CO2 is emitted from the burning of natural gas compared to coal and oil. Natural gas is therefore crucial to obtain a reliable and more climate-friendly energy supply to power stations, industry and consumers for many years to come. This is an aspect we deal with in DONG Energy. Through a targeted investment plan, we have secured a significant ongoing production of natural gas, and we complement our own production with long-term supply contracts with external suppliers.
Moving Energy Forward
Alone, DONG Energy cannot ensure that the global energy supply undergoes the necessary change in the years ahead. We know that. We hope we can help show the way. We do know where DONG Energy is headed – we have defined the course and the goal for our own journey – and the journey has begun. We call it Moving Energy Forward.
The Danish society, in which DONG Energy is rooted, requires a highly reliable energy supply and demands that we are accountable to our fellow human beings, our environment, and the markets in which we operate. With our core values – result-oriented, responsible and responsive – as our point of departure, we strive to live up to these expectations every day.
We run an efficient company that is focused on creating value.
We show consideration for people, the environment, and markets in all our actions.
We are open to new ideas and are willing to act accordingly.
The Corporate Governance Committee has prepared Recommendations on Corporate Governance that listed companies must comply with. As a State-owned public limited company, DONG Energy operates on terms very similar to those applying to listed companies. The Group has consequently elected to generally comply with the recommendations.
The Board of Directors reviews the corporate governance recommendations annually based on best practice.
As principal shareholder (79.96% ownership interest), the State exercises its ownership in accordance with the principles in the publication “The State as shareholder”.
Shareholder meetings at which management briefs shareholders on the Group’s activities - within the framework laid down by law - are held at suitable intervals.
Annual General Meeting
General meetings are convened by not less than two weeks’ notice in accordance with the Articles of Association. At the AGM, the annual report is adopted; an auditor appointed; a Chairman, Deputy Chairman and other members of the Board of Directors elected; the Board of Directors’ remuneration determined; the Board of Directors and the Executive Board discharged from their obligations; and any resolutions proposed by the Board of Directors on authority to purchase treasury shares decided on.
Composition of Board of Directors
The Board consists of 12 members. Eight members are elected at the AGM and four by the employees. Details of Board members can be found on DONG Energy's website and in the annual report.
DONG Energy attaches importance to Board members possessing extensive knowledge and experience from managerial posts with large Danish and foreign companies with a broad range of areas of activity, including in areas directly related to DONG Energy’s business areas. In the assessment of the composition of the Board, the candidates’ skills and background are considered, but also the wish for diversity and an appropriate balance. DONG Energy has decided not to set an age limit for Board members. However, the age of potential candidates forms part of the overall assessment of the Board’s composition.
In 2010, DONG Energy joined the “Operation Chain Reaction” initiative of the Danish Minister for Gender Equality. It focuses on development and recruitment of more female managers to the boards of Danish public limited companies. DONG Energy is working actively to increase the proportion of female members on its Board.
A Nomination Committee is appointed after the AGM each year and by 30 September of the following year. Its main role is to review the Board’s composition and to recommend suitable candidates for election at the AGM. It must also ensure that the Board’s composition complies with the Recommendations on Corporate Governance, including, to the extent possible, the wish for diversity. The Committee’s rules of procedure can be found on DONG Energy’s website.
The Nomination Committee consists of six members. Each of the four largest registered shareholders is entitled to elect one member. The other two members are the Chairman of the Board of Directors, who also chairs the Committee, and the Deputy Chairman. As most of the Committee’s members are thus appointed by the company’s largest shareholder, the Committee has a different composition than assumed in the Recommendations on Corporate Governance and thus does not comply with the Recommendations.
Two of the members elected at the AGM are appointed by SEAS-NVE and the former shareholders in Elsam under a provisional shareholders’ agreement between DONG Energy’s shareholders. None of the Board members elected at the AGM has had any other association with DONG Energy than asmember of the Board of Directors in companies that are now part of the Group, and as residential customers on standard terms, neither in previous years nor in 2010. All Board members elected at the AGM retire at the AGM each year, but may stand for re-election. All Board members elected at the AGM are independent, except for one member, who does not satisfy the new recommendations on independence, having been on the board for more than 12 years.
Under Danish legislation the Group’s employees are entitled to elect a number of Board members corresponding to half the number elected at the AGM. These are elected for three year terms and have the same rights, duties and responsibilities as members elected at the AGM.
The duties and responsibilities of the Board of Directors
DONG Energy’s overall objectives and strategy are determined by the Board of Directors, which is also responsible for appointing a competent Group Executive Management. The Board is also responsible for ensuring clear guidelines for accountability, segregation of duties, planning, follow-up and risk management. The duties of the Board and its Chairman are set out in the Board’s rules of procedure, which are reviewed and updated annually by the full Board.
The number of annual board meetings appears from the annual report.
The Board undertakes a structured self-assessment each year based on assessment forms distributed to each Board member and subsequent discussion of the responses by the full Board.
The Board has appointed an Audit and Risk Committee and a Remuneration Committee.
Audit and Risk Committee
After the AGM, the Board of Directors appoints the members of the Audit and Risk Committee, which reports to the Board of Directors. The Committee’s main role is to support the Board in its review of the financial reporting, the annual report and internal accounting and ERP systems. The Committee also reviews the external auditors’ skills and independence and is responsible for the conclusion of engagement agreements with external auditors. The Committee monitors the Group’s compliance with legislation and other requirements from public authorities concerning the company’s annual report, financial reporting and internal control systems, including control systems relating to the publication of relevant information. It is also part of the Committee’s remit to monitor issues relating to the risk policy laid down by the Board of Directors, from a financial and an accounting point of view.
Furthermore, the Committee discusses accounting procedures with the external auditors, evaluates their work, establishes whistle blowing procedures and undertakes other relevant tasks.
The Audit and Risk Committee consists of four members. All its members have accounting skills in accordance with the rules on audit committees in the Danish Act on Registered and State Authorised Public Accountants.
The Committee’s terms of reference can be found on DONG Energy’s website.
After the AGM the Board of Directors appoints the members of the Remuneration Committee, which reports to the Board of Directors. The Committee’s main role includes the preparation and presentation of recommendations to the Board on the Group Executive Management’s salaries, bonus and other components of their service contracts as well as guidelines governing salaries to senior executives, other salary and employment conditions, which are submitted to the Board of Directors, and the Board of Directors’ remuneration, which is submitted to the shareholders for approval at the AGM. The number of annual meetings appears from the annual report.
Members of the Board of Directors and the Group Executive Management may not buy shares and DONG Energy has not issued any options or warrants. Details of the remuneration of the members of the Board of Directors and the Group Executive Management can be found in a note to the consolidated financial statements. DONG Energy’s remuneration policy has been approved both by the board of directors and in general meeting and can be found on DONG Energy’s website.
The Remuneration Committee consists of three members.
The Committee’s terms of reference can be found on DONG Energy’s website.
Group Executive Management
The Group Executive Management is responsible for the day to day management of the company and consisted of six persons at the end of 2010. Details of its members can be found on DONG Energy's website and in the annual report. The CEO and CFO are registered with the Danish Commerce and Companies Agency as members of the Executive Board of DONG Energy A/S. The Board of Directors lays down the detailed rules for the Group Executive Management, including the segregation of duties between the Board of Directors and the Group Executive Management and the latter’s powers to enter into agreements on behalf of the company