Investor relations - Organization
DSB is an independent public corporation and consequently wholly owned by the Danish state. Its objectives, management and responsibilities are governed by law. The Danish Ministry of Transport and Energy oversees that DSB complies with the provisions contained in the Act on the Independent Public Corporation DSB and on DSB S-tog A/S (The DSB Act).
The Act, the Articles of Association, the rules of procedure of the Board of Directors and the orders to the Executive Board reflect DSB’s responsibility that, as a publicly owned corporation, it complies with good corporate governance in all respects. With regard to financial reporting, DSB is subject to Accounting Regulations and a set of Competition Law Guidelines.
The Annual Meeting
The corporation’s supreme body, the Annual Meeting, is comparable to the annual general meeting of limited companies.
The Minister of Transport and Energy can be compared to a sole shareholder and exercises authority at the Annual Meeting similar to that which the Public Limited Companies’ Act and the Financial Statements Act assign to shareholders.
The Minister of Transport and Energy, the Board of Directors, the Executive Board and also the auditors attend the Annual Meeting which is presided over by a Chairman appointed by the Minister of Transport and Energy. The Meeting is open to the press.
The corporation’s Articles of Association can only be changed by the Minister of Transport and Energy following discussion with the Board of Directors. Changes to the Articles of Association must be formally approved at the Annual Meeting.
In addition to the Annual Report, which is adopted at the Ordinary Annual Meeting before the end of April, accounts for the corporation’s primary business areas are presented in accordance with the Accounting Regulations. These are subject to the Competition Law Guidelines.
The Board of Directors
DSB is governed by a Board of Directors consisting of nine members. Six, including the Chairman and Deputy Chairman, are appointed by the Minister of Transport and Energy. The Chairman cannot perform tasks for DSB that are not a natural part of the Chairman’s responsibilities. An exception can be made in the case of single tasks which the Chairman is asked to perform by and on behalf of the Board of Directors.
The members of the Board of Directors are elected for a period of two years and can be re-elected. The Minister of Transport and Energy may remove directors appointed by him at an Annual Meeting.
Directors appointed by the Minister must be selected from a broad social, managerial and business background so that the Board of Directors as a whole has experience with transport issues. Public servants, who are subject to ministerial authority, cannot be members of the Board. In this connection, DSB’s status equals that of a state-owned company.
In keeping with the provisions of the Public Limited Companies Act, the employees elect three members to the Board.
The Minister of Transport and Energy appoints the Chairman and Deputy Chairman at the Annual Meeting. The Chairman and the Deputy Chairman constitute the corporation’s chairmanship. As is also the case with other directors elected at the Annual Meeting, the Chairman and the Deputy Chairman cannot be employees of the corporation. The chairmanship’s duties are governed by the rules of procedure of the Board of Directors.
The functions of the Board of Directors
The Board of Directors employs and dismisses the corporation’s Executive Board and determines the terms of the Executive Board ’s employment. The Board ensures that the Executive Board regularly submits financial information, budgets and other important information relevant to the development of the corporation and its subsidiaries. The Board reviews the quarterly accounts and budgets and any deviations. During the year, the Board of Directors addresses the following issues:
An examination of the Annual Report and the Announcement of the annual accounts.
At least once annually considers whether DSB’s organisation, including, in particular, the structure of DSB’s accounting functions, internal controls and computer system, is reliable and whether control procedures are in place to safeguard against misuse.
Once a year the Board of Directors submits a proposal to the Minister of Transport and Energy concerning the appointment of the state authorised public accountant at the Annual Meeting.
Each quarter the Board of Directors reviews the quarterly accounts for the preceding quarter.
Once a year the Board of Directors reviews the DSB Group’s insurance cover, including the extent to which the insurance cover is provided in accordance with the insurance policy laid down by the Board of Directors.
Once a year the budget for the coming year and a budget forecast for the subsequent two financial years are approved.
Each quarter a report is prepared, which as a minimum covers DSB’s liquidity, financing issues, passenger development, punctuality and other relevant quality targets, important transactions, cash flows and special risks.
A minimum of four board meetings are held. In 2005, five ordinary and six extraordinary board meetings were held. In conjunction with one of the year’s board meetings, a seminar is held for the Board of Directors. The Board of Directors considers all issues relating to DSB’s general development at the board meetings.
At each meeting, the auditors’ records are presented and all entries are considered and signed by all Directors.
The Board of Directors carries out an annual evaluation of its work, results and composition and its relations with the Executive Board. The Board of Directors will consider the extent to which earlier strategic objectives and plans have been accomplished. The Chairman of the Board of Directors is in charge of the evaluation which is carried out by way of personal interviews between the Chairman and the directors. The outcome will subsequently be considered by the full Board.
The Executive Board
The Executive Board is responsible for the day-to-day management of DSB and for ensuring that DSB’s accounting complies with relevant legislation and that DSB’s asset management is carried out satisfactorily.
The Board of Directors determines the guidelines under which the Executive Board operates, including guidelines for the allocation of tasks between the Board of Directors and the Executive Board and the Executive Board’s competence with regard to financial issues. The instructions are submitted to the Minister of Transport and Energy for approval. The Executive Board’s salary and bonuses are set out in note 6 to the annual accounts. Members of the Executive Board cannot, without prior approval by the Board of Directors, assume tasks that are unrelated to the corporation’s interests.
Briefing the Minister of Transport and Energy
The Chairman and Deputy Chairman are obliged to brief the Minister of Transport and Energy on matters of material importance.
For instance, such briefings take place at quarterly meetings where the Minister is briefed on developments which may be of material financial or political importance. In addition, the Minister is briefed on the corporation’s and its subsidiaries’ insurance cover, including the extent of any excess for the individual insurance policies.
Moreover, the Minister of Transport and Energy is presented with the annual accounts for business areas prepared in accordance with the Competition Law Guidelines.
The DSB Act and DSB’s Articles of Association stipulate that if DSB or DSB’s subsidiaries wish to make investments in excess of DKK 100 million, this must be submitted to the Parliamentary Finance Committee for approval. The limit is set out in the corporation’s Articles of Association and can be changed following approval by the Finance Committee. DSB’s foreign operations are regulated in accordance with article 5 of the Articles of Association.
The framework for the corporation’s and its subsidiaries’ raising of loans for operational as well as investment purposes is, in accordance with the DSB Act, determined by the Minister of Transport and Energy. The framework for loans for investment purposes must be approved by the Finance Committee. The current framework for loans for operational purposes and the principles for raising loans for investment purposes are set out in the Articles of Association.
As stipulated in the Financial Statements Act, DSB’s annual accounts are audited by a state authorised public accountant and by the Office of the Auditor General of Denmark. The state authorised public accountant is appointed by the Minister of Transport and Energy at the Annual Meeting following a recommendation by the Board of Directors. The appointment is for one year at a time and reappointment is possible.
The Office of the Auditor General of Denmark also audits DSB’s accounts in accordance with the regulations in the Act on the Audit of State Accounts, etc. On presentation of the annual accounts, the state authorised public accountant must declare whether the requirements in the Accounting Regulations and the Competition Law Guidelines have been complied with.
DSB also has an internal auditing department, which also covers DSB’s Danish affiliates. The Internal Chief Auditor reports directly to the Board of Directors.