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PANDORA

Corporate Governance

RECOMMENDATIONS AND PRACTICE

PANDORA’s aim regarding good corporate governance is to ensure transparency, accountability, and that the Company meets its obligations to shareholders, customers, consumers, employees, authorities and other key stakeholders to the best of its ability in order to maximise long-term value creation. 

PANDORA has disclosed its statutory report on corporate governance for the financial year 2015, cf. Section 107b of the Danish Financial Statements Act at
http://investor.pandora.net/governancestatement.cfm

PANDORA intends to exercise good corporate governance at all times and to assess its practices according to the corporate governance recommendations of the Danish Committee on Corporate Governance. As a publicly listed company, PANDORA is subject to the disclosure requirements laid down by Nasdaq Copenhagen, which has included the recommendations in its ‘Rule Book for Issuers of Shares’. The Danish corporate governance recommendations were updated in May 2013 with a minor revision in 2014, which does not impact PANDORA’s reporting. In 2015, PANDORA chose to deviate partly from Clause 3.4.6 as the Chairman of the nomination committee is not the Chairman of the Board. At PANDORA, the nomination committee elects a chairman, who must be either the Chairman or one of the Deputy Chairmen of the Board. The Chairmanship is handled in cooperation between the Chairman of the Board and the Deputy Chairman and thus, in practice, the Deputy Chairman represent the Chairman in the nomination committee. All other Corporate Governance recommendations are followed by PANDORA.
 

Board of Directors and Executive Board

Powers are distributed between the Board of Directors and the Executive Board and independence exists between these two bodies as is normal practice in Denmark. The Board of Directors is elected at the General Meeting and all Board members are up for election every year. The Executive Board is appointed by the Board. The Executive Board handles day-to-day management, while the Board supervises the work of the Executive Board and is responsible for the general strategic direction. The primary tasks for the Board are to ensure that PANDORA has a strong management team, an adequate organisational structure, efficient business processes, optimal capital structure, transparent bookkeeping and practices, and responsible asset management.

The composition of the Board must be such that, at any time, the consolidated competencies of the Board enable it to supervise the Company’s development and diligently address the specific opportunities and challenges faced by PANDORA. The Board and the Executive Board together develop the Company’s overall strategies and oversees that the competencies and resources are in place to maximise the likelihood of PANDORA achieving its objectives. Furthermore, the Board oversees the financial development of PANDORA and the related planning and reporting systems.
 

Board activities in 2015

During 2015, the Board held seven ordinary board meetings. The total attendance rate was 90%. In 2015, the primary commercial focus area for the Board was the continued global expansion exemplified by entering into a strategic alliance in China, acquisition of the store network in Singapore and Macua, taking over distribution in Philippines, taking over leaseholds in Germany, expanding the strategic alliance with the Walt Disney Company to include Asia Pacific, and launching e-commerce in several countries including the US.
 

Board self-evaluation

The Board conducts an annual self-assessment to constantly improve the performance of the Board and its cooperation with the Executive Board. The chairman of the Nomination Committee directs the assessment process. The assessment is carried out by each Board member completing a questionnaire followed by a board discussion where improvement areas are defined and agreed upon. Once a year, the CEO must perform an assessment of the individual members of the Executive Board.

Among the topics covered in the Board self-assessment are board composition, the nomination process and competencies of the Board. Also covered is e.g. the Board’s involvement in financial management and control, risk management, cooperation with the Executive Board, personal contributions and committee work.

The self-assessment conducted in 2015 identified the following strengths and development areas for the Board. In general, the Board demonstrates appropriate industry knowledge and includes a diversity of experiences and backgrounds well fitted to PANDORA’s business and strategy. Board structure and committee work is effective, and the Board considers itself to be sufficiently involved in financial oversight. The primary action point for 2016 are improvement of the processes around Board meetings and the intercation between the Board and the committees. Furthermore, in order to gain further insight, the Board will allocate time for market visits and enhancing its experience to all levels of the organisation.