TDC Group Annual Report 2011(6,4MB) - TDC Annual Report 2011

Corporate Governance
Recommendations from the Committee on
Corporate Governance
In April 2010, the Committee on Corporate Governance
issued revised recommendations on Corporate
Governance. The recommendations were further revised in
August 2011.
As a listed company, TDC is covered by the
recommendations issued by the Committee on Corporate
Governance and must – either in its annual report or on its
website – publish a Corporate Governance statement based
on the recommendations and with respect of the “complyor-explain”
principle. TDC’s Corporate Governance
Statement 2011 is available on the company’s website,
investor.tdc.com/governance.cfm. The recommendations
are available on the Committee on Corporate Governance’s
website, www.corporategovernance.dk.
TDC’s focus on corporate governance compliance is clearly
reflected in the fact that the company complies with 74 of
the 79 numbered recommendations. In 2011, the Board of
Directors completed a formal self-evaluation of its
performance with external assistance. This has taken TDC’s
compliance with the recommendations a major step
forwards.
The few cases of non-compliance with the
recommendations are caused primarily by TDC’s ownership
structure. TDC has a majority shareholder that holds more
than 50% of the shares, and a number of minority
shareholders. The majority shareholder’s influence on
selecting and nominating candidates for TDC’s Board of
Directors does not facilitate TDC’s ability to comply with
recommendations regarding the composition of the Board
of Directors and board committees.
Guidelines from the Danish Venture Capital
and Private Equity Association (DVCA)
In June 2011, the Danish Venture Capital and Private Equity
Association issued revised guidelines for responsible
ownership and good corporate governance in private equity
funds in Denmark.
TDC’s majority shareholder, NTC Holding GP & Cie S.C.A, is
ultimately controlled by investment funds, each of which is
advised or managed, directly or indirectly by Apax Partners
Worldwide LLP, the Blackstone Group International Limited,
TDC Group Annual Report 2011
Kohlberg Kravis Roberts & Co. L.P., Permira Advisers KB and
Providence Equity Partners Limited.
As a listed company with a majority shareholder that is
ultimately controlled by equity funds, TDC is covered by the
DVCA guidelines and must – either in its annual report or on
its website – publish a Corporate Governance statement
based on the guidelines and with respect of the “comply-orexplain”
principle.
TDC complies with all guidelines relevant to the company.
TDC’s compliance with the DVCA guidelines is further
described in TDC’s Corporate Governance Statement 2011
which is available on the company’s website,
investor.tdc.com/governance.cfm. The guidelines are
available on DVCA’s website, www.dvca.dk.
Internal control and risk management
systems for financial reporting
TDC’s internal control and risk management systems for
financial reporting are planned to provide assurance that
internal and external financial statements are prepared in
accordance with the international Financial Reporting
Standards (IFRS) as adopted by the European Union and in
compliance with the additional Danish disclosure
requirements for annual reports of listed companies, and
the assurance that true and fair financial statements
without material misstatements and irregularities are
presented. TDC’s detailed statutory reporting for 2011 on
internal control and risk management systems for financial
reporting in accordance with Section 107 b of the Danish
Financial Statements Act is available on the company’s
website, investor.tdc.com/governance.cfm.
Based on recommendation from the Audit Committee, the
Board of Directors has assessed and concluded that the
existing control environment within TDC is adequate and
that there is no basis for establishing an internal audit.
The Board of Directors
TDC’s Board of Directors has 15 members, eleven elected
by the General Meeting and four elected by the employees.
All members of the Board of Directors act in the interest of
TDC. The members of the Board of Directors who are also
partners of the equity funds, which ultimately control the
majority shareholder of TDC, do not represent these equity
funds on the Board of Directors.
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