Adjusted Recommendations on Corporate Governance

Date 18 jun. 2020
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Since submitting the annual reports for 2015, commercial funds have had to consider the Recommendations on Corporate Governance (the “Recommendations”) on a “comply-or-explain” basis. This has meant that commercial funds that have chosen to not follow one or more parts of the Recommendations have had to give an account therefore. In June 2020, the Committee on Corporate Governance made certain adjustments to the Recommendations. We take a look at this in the following.

The Recommendations on "Comply-or-Explain"

The statement must be included in the annual report and be available on the fund’s website. Provided that the board of directors have given a satisfactory account of (1) why any given recommendation has not been followed, and (2) how the fund has chosen to act instead, the board of directors may decide whether the Recommendations are fitting for the specific fund, or if it is deemed more appropriate to act differently.

Adjustment of the Recommendations

The Recommendations were adopted in December 2014 and have this June 2020 been updated with a new recommendation (no. 2.1.2) regarding the investment management. The recommendation suggests that the board of directors continuously consider whether the fund’s investment management corresponds to the fund’s short and long-term purpose and needs.

The remarks to the new recommendation state that the board of directors should specify the general principles which are the basis of the investment management and include both the expected yield as well as distribution and costs. Further, the purpose of the fund’s investments, the type of investments, risks, capital resources, control and reporting should be included. All this, along with the general purpose, is to ensure that the fund is viable and continuously able to meet its purpose, including supporting any ownership of subsidiaries.

The other adjustments consist in a number of clarifications and remarks, particularly in the following areas:

  • External communication
  • Strategic discussions
  • The board of directors’ independence
  • Remuneration composition
  • Publication of remuneration

Our Assessment

The Recommendations have been updated based on recent years’ experience and have been supplemented by a number of remarks. Despite the fact that the Recommendations do not include any significant innovative elements, the expanded remarks mean that they constitute an increased important contribution to the work on corporate governance. Further, the Recommendations put increased focus on being seen as “best practice” which certainly increases their importance as well as the importance of the requirements in relation to deviations. Similarly, the Recommendations will serve as inspiration in other context, including other funds etc.



If you have any questions or would like more information about the above, please do not hesitate to contact Partner Dan Moalem ( or Senior Associate Henning Hedegaard Thomsen (


The above does not constitute legal counselling and Moalem Weitemeyer Bendtsen does not warrant the accuracy of the information. With the above text, Moalem Weitemeyer Bendtsen has not assumed responsibility of any kind as a consequence of any reader’s use of the above as a basis for decision or considerations