TDC Group pursues sound corporate governance principles. This side contains TDC Group's corporate governance reporting in accordance with Section 107b of the Danish Financial Statements Act. The reporting describes TDC Group's position on recommendations issued by the Committee on Corporate Governance. Further, it contains a description of TDC Group's internal control and risk management systems for financial reporting and TDC Group's Board of Directors, board committees and Corporate Management Team.
As a listed company, TDC Group is covered by the recommendations issued by the CCG and must – either in its annual report or on its website – publish a Corporate Governance statement based on the recommendations in line with the “comply-or-explain” principle.
TDC Group’s focus on corporate governance compliance is clearly reflected in the Company's compliance with 44 of the 47 numbered recommendations and partial compliance with the remaining three recommendations. Read more in TDC Group’s “comply or explain”-account.
This is TDC Group’s statutory report on corporate governance, pursuant to Section 170b of the Danish Financial Statements Act.
TDC Group’s internal controls and risk management systems for financial reporting are prepared with a view to ensuring that internal and external accounts are submitted in accordance with the international financial reporting standards (IFRS) approved by the EU, as well as additional Danish information obligations on listed companies and for ensuring that the accounts presented are true and fair and free from material errors and irregularities.
The internal controls and risk management systems are updated on an ongoing basis and have been designed to identify and eliminate errors and omissions in the accounts. As there is always an inherent risk of irregular use of assets, unexpected losses, etc. the established internal controls and risk management systems alone can only provide a high level of likelihood – rather than absolute certainty – that material misstatement and irregularities in the financial reporting will be identified and corrected.
The Board of Directors has set up an Audit Committee that is principally tasked with assisting the Board in monitoring both financial reporting and the efficiency of TDC Group’s internal controls and risk management systems.
The Audit Committee has supervisory responsibility and reports to the Board of Directors as a whole. The Executive Committee holds responsibility for the everyday maintenance of efficient internal controls and risk management systems in connection with financial reporting.
Responsibility and authorisation are defined in policies and procedures. The Board of Directors and the Executive Committee lay down the overarching policies and procedures for significant areas in connection with the financial reporting process. The relevant responsible functions set the other guidelines and controls, and supervise the application of policies and procedures, including the necessary separation of incompatible functions.
On the basis of recommendations from the Audit Committee, the Board of Directors has assessed TDC Group’s existing control environment and concluded that the environment is sufficient and that there is no need to establish an internal audit function.
The Board of Directors and Executive Committee continuously assess the risks that affect TDC Group, including risks that influence the financial reporting. There is relatively greater risk of error on those entries in the accounts that are based on estimates or complex processes than there is on other entries.
The section of the consolidated financial statement entitled ‘Significant accounting estimates’ presents the most significant risks identified in relation to the financial reporting. These conditions are the subject of specific review and evaluation by the Audit Committee and the Board of Directors.
Control activities are based on the risk assessment. The objective of these activities is to ensure compliance with policies, procedures, guidelines and manuals, etc. and that any errors and omissions are prevented, identified and corrected in a timely fashion. The control activities are integrated into TDC Group’s accounts and reporting procedures and include aspects such as authorisation, approval, reconciliation, analysis of results, assessment of results and achievement of stated goals (Key Performance Indicators, etc.), checks concerning IT applications, and general IT checks. Information and communication TDC Group maintains information and communications systems designed to ensure correct financial reporting.
The accounts manual and other reporting instructions, including budget and monthly closing procedures, are updated continuously as required. Together with other policies, procedures and business process descriptions concerning financial reporting, these tools are available to relevant employees. Changes to procedures, etc. are reported to and reviewed with the business units in relevant forums.
The information systems have been set up with a view to ensuring that relevant information is identified, collated and communicated at appropriate level and on an ongoing basis, in accordance with the level of confidentiality prescribed for listed companies.
TDC Group uses a comprehensive finance system for monitoring results. This makes it possible to identify and correct any errors and irregularities in the financial reporting at an early stage, including identified weaknesses in the internal controls and failure to comply with policies and procedures.
The consolidated reporting process comprises budget reporting and monthly reporting of results achieved, including deviation reports with ongoing estimates for the year as a whole. In addition to the income statement, balance sheets and cash flow statement, the reporting comprises notes and supplementary financial and operational information and analyses. The detailed reports from all Group companies are analysed and monitored at Group and business unit level, as well as at relevant management levels within the organisation.
The auditors appointed by the General Meeting report any significant weaknesses in the internal control systems in connection with the financial reporting process in the auditor’s Long-form report to the Board of Directors. Less significant conditions are reported in Management Letters to the Executive Committee. The Audit Committee follows up to ensure that any weaknesses in the internal controls identified and reported by the auditors appointed by the General Meeting have been dealt with appropriately.
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