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Annual Report 2014/15Detailed Picture

Corporate governance

The Board of Directors of Chr. Hansen Holding A/S remains committed to following the Danish Recommendations on Corporate Governance as adopted on 1 June 2013 by Nasdaq Copenhagen in its Rules for Issuers of Shares, and complied with the recommendations in all respects in 2014/15.

Chr. Hansen is committed to being accountable to all relevant stakeholders. The Company has developed a set of policies and positions aligned with international conventions, treaties and standards. As part of this, Chr. Hansen continues to support the United Nations Global Compact’s 10 principles in the areas of human rights, labor, the environment and anticorruption.

Key developments in 2014/15

Diversity

Since the development of a diversity strategy and diversity targets in 2012, Chr. Hansen has seen measurable improvements in both gender and nationality diversity. During 2014/15, Chr. Hansen’s corporate management teams became more diverse for the fourth consecutive year, with 27 out of 35 teams now including both genders and more than one nationality. Likewise, the Board of Directors added one woman and one non-local during 2014/15 in line with the target for 2016/17 to have at least two women and one non-local on the Board of Directors. With the achievement of the target for women on the Board of Directors, the Board has set a new goal of minimum three women by latest 2019/20.

Business ethics

Chr. Hansen continued its anticorruption training program, with 245 new employees undergoing the program during 2014/15. To date, more than 1,200 people have completed the training program, which is a core component of Chr. Hansen’s anticorruption awareness efforts.

Chr. Hansen has implemented a whistleblower system, which provides a means of reporting possible violations of laws and/or Group policies. Since its implementation in October 2013, six complaints have been registered through the whistleblower system, of which four were registered in 2014/15. In addition to this, four complaints were received outside the system. All complaints have been investigated, and corrective action taken in six cases where the claim was substantiated.

Chr. Hansen continuously encourages employees and external stakeholders such as suppliers and customers to use the system. As an example, use and awareness of the system will be included in the biannual employee survey from 2015/16.

Annual Board of Directors review

The Chairman of the Board of Directors is responsible for conducting an annual review of the Board’s performance, addressing the effectiveness of the Board, the processes supporting its work, individual members’ contributions and the Chairman’s performance.

In 2014/15, the evaluation was conducted by the individual directors and the executives anonymously completing a comprehensive online questionnaire which was then summarized by an external consultant.

The results of the assessment process were presented to the Board of Directors in September 2015 by the Chairman. The report describes a number of areas in which the Board is both effective and very well-functioning and gives an overall impression of a high-performing board of directors. Almost all areas for improvement which were identified in last year’s assessment have been complied with. This year, too, the assessment identified some minor areas in which improvements will be considered.

The Chairman will hold individual meetings with the other directors to review their performance.

Similar evaluations of their effectiveness have been undertaken by the Audit Committee, the Nomination Committee and the Remuneration Committee.

Remuneration

The remuneration of the Executive Board and Board of Directors at Chr. Hansen shall contribute to the Company being able to attract and retain highly qualified members for both its Executive Board and Board of Directors as well as promoting the creation of shareholder value and further support the Company’s short- and long-term objectives.

The following section describes the most important parts of Chr. Hansen’s remuneration of the Executive Board and Board of Directors.

Executive Board

Members of the Executive Board receive an agreed base salary, which is subject to annual reassessment, and are granted certain benefits such as company car, insurance, newspaper, free telephone and internet access.

Pension contributions amount to 20% of the base salary.

The Executive Board and other key employees are further offered incentive-based remuneration in accordance with the Board of Directors’ overall guidelines for incentive-based remuneration as approved by the Company’s Annual General Meeting.

Board of Directors

The remuneration of members of the Board of Directors comprises a fixed annual base fee and fixed annual supplementary fees for the Chairman, Vice Chairman, and members and chairmen of permanent committees. Members of the Board of Directors do not receive any incentive-based remuneration.

Assessment of the remuneration

The remuneration of the Executive Board and Board of Directors and is assessed annually. The Board of Directors decides on the remuneration of the Executive Board and other key employees based on a recommendation from the Board’s Remuneration Committee.

Further information

Section 107b of the Danish Financial Statements Act requires the Board of Directors of Chr. Hansen Holding A/S to prepare a statement on corporate governance for the 2014/15 financial year. This statement forms part of Management’s Review and can be viewed at www.chr-hansen.com/investors/governance/corporate-governance.

For a full report on corporate social responsibility as required by sections 99a and 99b of the Danish Financial Statements Act, please refer to Chr. Hansen’s Communication on Progress to the UN Global Compact, available at www.chr-hansen.com/responsibility/reporting-and-disclosure.

For more information on remuneration, please refer to Chr. Hansen’s Remuneration Policy as approved by the Annual General Meeting on 29 November 2011 and Overall Guidelines for Incentive-based Remuneration as approved by the Annual General Meeting on 27 November 2014. The remuneration policy and guidelines, Chr. Hansen Articles of Association, and other policies and positions are available at www.chr-hansen.com/investors/governance/policies-and-charters.

For specific information on the remuneration of the Executive Board and Board of Directors in 2014/15, please refer to notes 2.3 and 5.1.