Governance bodies

Pursuant to the provisions of the Danish Companies Act and the ROCKWOOL International A/S Articles of Association, the supervision and management of the ROCKWOOL Group is divided among General Meeting of shareholders, the Board of Directors, and Group Management.

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Annual General Meeting of shareholders

The ROCKWOOL International A/S ordinary General Meeting is of great significance as it convenes our shareholders. It is held once a year and is broadcasted live in Danish and English on our corporate website.

Voting at the General Meeting is based on possession of two types of ROCKWOOL shares: A shares (51.1% of the capital) carry ten votes each and B shares (48.9% of the capital) carry one vote each. This share structure is deemed optimal for the strategic development of the company, thereby creating long-term value. Together with the high equity ratio – currently 68% - this structure provides independence from financial markets, plus stability to counterbalance fluctuating conditions in building sector markets, as well as the high operational leverage of our business model. This leverage is linked to the capital intensive nature of our factories – one new plant may cost more than EUR 120 million and must operate with sufficiently high capacity to pay back the investment.

The ROCKWOOL Foundation – our largest shareholder with 23% of share capital – works for the benefit of society while also duly considering the long-term interests of the Group. Members of the Board of the ROCKWOOL Foundation include ROCKWOOL International A/S Board of Directors member Søren Kähler and Lars Elmekilde Hansen - one of three employee-elected members – as well as Andrzej Kielar, Managing Director of ROCKWOOL Polska.

There is an agreement between certain members of the Kähler family (founders of the business), to meet regularly to coordinate their interests in the company, including voting strategy at General Meetings, although there is no requirement for them to vote jointly. Søren Kähler and Thomas Kähler – both members of the Board of Directors – participate in these meetings.

ROCKWOOL International A/S Board of Directors and Group Management are not aware of the existence of any shareholder agreements containing pre-emption rights or restrictions in voting rights.

The Board of Directors

The Board of Directors today consists of nine members, six of whom are elected by the shareholders at General Meetings for a period of one year and may be re-elected. Of these, four members, including the chairman, are deemed independent according to the Danish Recommendations on Corporate Governance. Three members are elected by the employees, for a period of four years, pursuant to the Danish Companies Act. The roles and responsibilities of the Board of Directors are defined in the Business Procedure for the Board of Directors.

The Board of Directors evaluates its own competences and the work and performance of Group Management on an annual basis.

Chairmanship

The Board has established a Chairmanship consisting of the Chairman and the two Deputy Chairmen.
Tasks
The role of the Chairmanship is to prepare the board meetings ensuring that relevant issues are treated with sufficient priority and attention to secure an efficient and successful execution of the meetings. Furthermore, the Board has authorized the Chairmanship to serve as a nomination committee.
Members
The Chairmanship consists of Henrik Brandt, Carsten Bjerg and Søren Kähler.

Audit Commitee

The Board has appointed an Audit Committee consisting of three members of the Board. The majority of the members of the Audit Committee are independent.
Tasks
The Audit Committee monitors accounting and audit policies and conditions, which, if determined by the Board or the Audit Committee, should be subject to a thorough evaluation. Further, the Audit Committee evaluates the company’s internal control and risk systems.
Members
Carsten Bjerg (Committee Chairman), Jørgen Tang-Jensen and Søren Kähler.
Søren Kähler is the member of the Audit Committee who possesses the required insight and experience in financial, accounting and audit aspects of a company listed on the stock exchange.
Meetings
The committee meets every quarter in connection with the ROCKWOOL International A/S Board meeting.

Remuneration Committee

Tasks
The Remuneration Committee ensures that the company maintains a remuneration policy for the members of the Board and Group Management, and that the guidelines for Group level variable pay schemes support the strategy.
The remuneration policy and the long term incentive schemes and all changes hereto are all approved by the Board as well as the General Meeting.
The Remuneration Committee evaluates and brings forward recommendations for the remuneration of the Board. The Remuneration Committee is also authorised to approve remuneration for senior executives.
Members
Henrik Brandt (Committee Chairman), Carsten Bjerg and Søren Kähler.
Meetings
The committee meets as required.

Charter of the Audit Committee

Group Management

Group Management is responsible for the day-to-day management of the company and compliance with the guidelines and recommendations set forth by the Board of Directors. The responsibility of Group Management covers organisation of the company, as well as allocation of resources, creating and implementing strategies and policies, and ensuring timely reporting to the Board of Directors.

In 2015, the Group launched a major Business Transformation Programme to improve the company’s competitiveness and profitability. As a consequence, Group Management was restructured and increased from six to nine executives. The CEO and CFO are the Registered Directors (in Danish “Direktionen”) with the Danish Business Authority.

Read more about the transformation programme in the Annual Report 2015.

Auditing

To safeguard the interests of shareholders and the general public, an independent auditor is appointed at the General Meeting following a recommendation from the Board of Directors. Before making its recommendation, the Board of Directors undertakes a critical evaluation of the auditor’s independence and competence.

The auditor submits a written report to the assembled Board of Directors once a year but also immediately if any issues of which the Board of Directors should be informed are identified. The auditor’s report is discussed in detail in the Audit Committee.

The Group works closely with the auditor in relation to procedures and internal controls by exchanging controller reports and audit reports, and by generally sharing all relevant information.

Internal control

The ROCKWOOL Group considers strong internal controls to be an essential management tool.

Group Management sets out general requirements for business processes and internal controls relating to the financial affairs of subsidiaries. The internal control system includes clearly defined organisational roles and responsibilities, reporting requirements and authorities. Local management teams are responsible for ensuring that the control environment in each subsidiary company is sufficient to meet local and Group requirements.

Each month the ROCKWOOL Group companies report financial data and every quarter they comment on financial and commercial developments to head office. This information is used to prepare consolidated financial statements and reports for Group Management. As part of this process, the accounting information reported by all companies in the Group is reviewed, both by controllers with regional links and in-depth knowledge of the individual companies, and by Group Controlling.

Twice a year, the financial directors of the ROCKWOOL Group’s companies meet with Group Controlling to align financial procedures and reporting, and suggest possible improvements. Commercial and financial developments, and associated risks, are also discussed regularly by Group Management, regional management teams and our subsidiary companies’ supervisory committees and management teams.

Group Internal Audit

The Group has set up a Group Internal Audit to ensure objective and independent assessment of the adequacy and quality of the Group’s internal controls. The most important role of the Group Internal Audit is to assess whether the Group has well-established accounting practices, written policies and procedures in all important business areas, plus adequate internal control measures.

Corporate Governance reports

Reports on Corporate Governance including the Board of Directors' consideration in respect of all the recommendations.

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