Corporate governance

In 2008, TrygVesta’s Supervisory Board focused on organising the Group’s strategic development with a healthy balance between short-term and long-term activities and action plans. The Supervisory Board takes care in preparing future tasks for the Group, such as new capital requirements and capital resources in connection with the future Solvency II rules so as to continuously strengthen the Group’s financial and strategic position.

TrygVesta’s corporate governance and remuneration policies are based on the corporate governance recommendations issued by OMX Nordic Exchange Copenhagen. The Supervisory Board believes that TrygVesta complies with the recommendations.

Stakeholders 
TrygVesta issues press releases and company announcements on a regular basis and publishes interim reports and annual reports in order to enable stakeholders to form an adequate impression of the Group’s position and its performance. The financial statements have been prepared in accordance with IFRS. TrygVesta updates its outlook for the Group’s performance each quarter. All financial announcements are released simultaneously in Danish and English. The Group has a number of in-house guidelines to ensure that disclosures are made in accordance with the stock exchange rules of ethics. Investor Relations has regular contacts to equity analysts and major investors and organises investor presentations, teleconferences and webcasts together with the management. The Supervisory Board is regularly briefed on the dialogue with investors. All material is available at www.trygvesta.com, which also offers stakeholders to receive the latest news as RSS feeds or to download webcasts and teleconferences as podcasts. The Group’s mission and relevant stakeholder policies, such as the policies for Investor Relations, communications and the environment, are available at www.trygvesta.com under Investor, About us, Press and CSR > Climate, respectively.

Capital and share structures
The Supervisory Board monitors that TrygVesta’s capital structure is in line with the interests of the Group and our shareholders, and that the capital structure is in compliance with the requirements applicable to TrygVesta as a financial undertaking. The Supervisory Board optimises our capitalisation on an ongoing basis while duly safeguarding the interests of policyholders and shareholders and leaving the Group sufficient scope for development and growth.

In 2008, the shareholders at the annual general meeting authorised the Supervisory Board to let TrygVesta acquire own shares within 10% of the share capital in the period up to the next annual general meeting. The Supervisory Board is authorised to distribute extraordinary dividends in accordance with the rules of the Danish Public Companies Act.

The annual general meeting in 2008 decided to initiate a share buy back programme.

At 31 December 2008, around 3.0m shares worth DKK 1,053m had been bought under the total share buy back programme of DKK 1,405m, and DKK 352m of the share buy back programme was thus outstanding. TrygVesta has decided to extend the share buy back programme, originally scheduled for completion on the day before the release of the annual report 2008, until the day before the annual general meeting, which will be held on 22 April 2009.

The Supervisory Board intends to consider any public takeover bid that may be made as prescribed by legislation and, depending on the nature of such bid, to convene an extraordinary general meeting of shareholders in accordance with applicable requirements and rules.

Annual general meeting 
TrygVesta holds its annual general meeting of shareholders each year before the end of April. The Supervisory Board convenes the annual general meeting by a company announcement and by advertisement in at least one national newspaper, giving not less than eight days’ notice. Shareholders may elect to receive an electronic notice of the general meeting, or they may download the notice at www.trygvesta.com. The notice includes relevant information about the time and place of the meeting and sets out the agenda, which as a minimum comprises the following items:

• Report of the Supervisory Board on the activities of the company during the past financial year
• Presentation of the annual report for approval and discharge of the Supervisory Board and the Executive Management, including determination of the Supervisory Board’s remuneration 
• Adoption of a resolution as to the distribution of profit or covering of loss, as the case may be, according to the annual report as approved, including proposed payment of dividend for the past financial year  
• Any proposals from the Supervisory Board or from shareholders
• Election of members to the Supervisory Board
• Appointment of auditors
• Any other business

All shareholders are urged to attend the annual general meeting, and shareholders may vote in person at the general meeting or appoint the Supervisory Board or a third party as their proxy. The proxy form will be available at www.trygvesta.com from 1 April 2009.

The tasks and responsibilities of the Supervisory Board
The Supervisory Board is responsible for the overall management and financial control of TrygVesta. In this work, the Supervisory Board uses targets and framework management based on regular and systematic consideration of strategies and risks.

The Executive Management reports to the Supervisory Board on strategies and action plans, market developments and the Group’s performance, funding issues, capital resources and special risks. The Supervisory Board cooperates with the Executive Management to ensure follow-up on and development of the Group’s strategies.

The Supervisory Board holds at least six annual meetings and an annual strategy seminar to discuss and define strategies and goals for the years ahead. The Supervisory Board discusses the Supervisory Board’s tasks on a regular basis, and at the last meeting in the year, it determines the items on the agenda for the coming year.

The Supervisory Board carries out an annual evaluation of the work and results of the Executive Management and of the cooperation between the Supervisory Board and the Executive Management. In addition, the Supervisory Board reviews and approves the rules of procedures of the Supervisory Board and the Executive Management each year to ensure they are aligned with TrygVesta’s requirements. Under the rules of procedure, the Supervisory Board has defined an evaluation procedure for assessing the work and results of the Supervisory Board, the Chairman of the Supervisory Board and the other individual members as well as the composition of the Supervisory Board in order to improve the work of the Supervisory Board. The assessment includes individual interviews between the Chairman of the Supervisory Board and the individual members in January and a discussion of these interviews at the next following Board meeting.

The Supervisory Board is headed by the Chairman and the Deputy Chairman. The duties of the Chairman and the Deputy Chairman of the Supervisory Board are defined in the rules of procedure of the Supervisory Board and include preparing meetings of the Supervisory Board and evaluating the work of the Supervisory Board and the cooperation with the Executive Management. The Chairman and the Deputy Chairman also plans the future composition of and replacement in the Supervisory Board. The Chairman of the Supervisory Board acts as spokesman for the Supervisory Board for external purposes. 
 
The composition of the Supervisory Board
The Supervisory Board makes an assessment of the competencies required for the Supervisory Board to perform its duties in the best possible way. In connection with the evaluation of the Supervisory Board’s work and its members’ competencies, it is assessed whether the Supervisory Board has the required competencies, or whether the competencies and expertise of its members need to be updated in some respects. A balanced distribution with respect to gender and age is sought in the composition of the Supervisory Board. The Supervisory Board has eight members elected by the shareholders. They are aged between 43 and 68 years, and there is one female member. New board members are offered an introduction course.

The Supervisory Board has 12 members, including eight members elected by the shareholders for a term of one year. Four of the eight members are non-affiliated. The Supervisory Board deems that the number of members is adequate to ensure a constructive debate and an efficient decision-making process.

To ensure replacement on the Supervisory Board, members elected by the shareholders may hold office for a maximum of nine years. Furthermore, members of the Supervisory Board must retire at the first general meeting following their 70th birthday.

Prior to the election of new members, the Supervisory Board prepares a description of the candidates’ background, professional qualifications and experience, and the notice convening the general meeting makes reference to this description. Information about the Supervisory Board members’ profiles and the number of TrygVesta shares held is set out in the section on Members of the Supervisory Board and is also available at www.trygvesta.com. A few Supervisory Board members hold more than the recommended number of directorships. However, the Supervisory Board considers that each member has adequate time and resources to serve as a member of the Supervisory Board of TrygVesta in a satisfactory manner.
 
CSR/corporate social responsibility
CSR is a focus area for TrygVesta; it supports the company’s business and peace-of-mind delivery. TrygVesta has drawn up a CSR declaration of intent, defining our commitment and describing our responsibility in relation to employees, customers and the external community. TrygVesta pursues an open policy with respect to the Group’s social commitment and reports on current CSR activities at www.trygvesta.com and in the Annual Report. TrygVesta is also committed to working with CSR through the Group’s participation in the Danish Council for Sustainable Business Development and the UN Global Compact.

CSR-organisation
The Group CEO chairs the TrygVesta CSR Board, and in addition, the Group Executive Vice Presidents, Customer Sales & Partners and direct sales, the commnucations Director and two other senior executives sit on the Board. The figure shows the three sub-committees in the CSR work.

Diversity
TrygVesta considers diversity a strength and has there-fore worked towards the goal that the composition of the company’s employees should reflect that of society in general. In the past few years, there has been increased focus on ethnicity, both in our current recruitment activities and in projects focusing on recruitment of employees with an ethnic background. In 2008, just over 4% of the Group’s employees had a foreign ethnic background, slightly less than this population group’s proportion of the Nordic population.

At the end of 2008, TrygVesta had seven women at senior management level. At 1 January 2009, the Group Executive Management comprised nine members, including three women. TrygVesta’s Group Executive Management is thus one of the most highly gender diversified among large companies in the Nordic region. The age distribution in the Group Executive Management ranges from 37 to 51 years.

Risk management
Being an insurance business, TrygVesta is subject to the requirements of the Danish Financial Business Act on risk management. In capital and risk management instructions, the Supervisory Board defines the framework for risk management in TrygVesta with respect to insurance risk/reinsurance, investment risk and operational risk, including IT security. This framework is then implemented in risk policies that define detailed guidelines for the Group’s risk management. A risk management committee comprising the Group CEO, Group CFO and selected senior executives monitors the risk management environment. The Executive Management reports to the Supervisory Board on the Group’s risk management work. A more detailed review of TrygVesta’s risk management is set out in the section on Risk management and at www.trygvesta.com.

Audit
The Supervisory Board ensures that the Group is monitored by competent and independent auditors. Each year, the annual general meeting appoints external auditors recommended by the Supervisory Board. The audit agreement with the external auditors, including the auditors’ fees, is concluded between the Supervisory Board and the auditors. The Supervisory Board adopts the framework for the auditors’ performance of non-audit services each year.

TrygVesta’s internal audit department regularly reviews the quality of the Group’s internal control systems and business procedures. The department is responsible for planning, performing and reporting the audit work to the Supervisory Board. The internal and external auditors’ long-form reports are reviewed by the Supervisory Board.

In connection with the Supervisory Board’s review of the annual report, it discusses the accounting policies, among other issues, and the results of the audit are discussed with the audit committee and in Supervisory Board meetings for the purpose of assessing the auditors’ observations and conclusions.