Governance

Our governance approach

Ensuring transparency, accountability, and ethical leadership to drive long-term value creation.

Management structure

According to general practice in Denmark, FLSmidth maintains a clear division of responsibility and separation between the Board of Directors and the Group Executive Management. Tasks and responsibilities are defined at an overall level via rules of procedure for the Board of Directors and rules of procedure for the Group Executive Management. In addition, terms of reference apply to the Board committees.

The Group Executive Management is responsible for the day-to-day business of the company, and the Board of Directors oversees the Group Executive Management and handles overall managerial issues of a strategic nature. The Chairman is the Board of Directors’ primary liaison with the Group Executive Management.

Learn more about how FLSmidth is managed

Compliance with the recommendations for corporate governance

Pursuant to Section 4.3 of the rules for issuers of shares listed on Nasdaq Copenhagen, Danish companies must provide a statement on how they address the recommendations on Corporate Governance issued by the Committee on Corporate Governance in December 2020 based on the ‘comply or explain’ principle (www.corporategovernance.dk).

FLSmidth’s position on each specific recommendation is summarised in the corporate governance statement.

In the Board’s opinion, FLSmidth complies with all recommendations on corporate governance applicable to Danish listed companies, except 3.5.1 related to external assistance in connection with evaluation of the performance of the Board of Directors, where the company only complies partially.

Presentation of financial statements and internal controls

To ensure a high quality of the Group’s financial reporting, the Board of Directors and the Group Executive Management have adopted a number of policies, procedures and guidelines for the presentation of the financial statements and internal controls which the subsidiaries and reporting entities must adhere to, including:

Continuous monitoring of goals and results achieved measured against approved budgets
Continuous monitoring of projects including accounting for and handling of risks
Policies for use of IT, insurance, cash management, procurement, etc.
Reporting instructions and reporting manual
Finance manual and closing procedure manual

Responsibility for maintaining sufficient and effective internal controls and risk management in connection with financial reporting lies with the Group Executive Management. The Audit Committee continuously monitors the process of financial reporting and the adequacy and effectiveness of the internal control systems established, including new accounting standards, accounting policies and accounting estimates. The Audit Committee monitors and checks the independence of the external auditor and monitors the planning, execution and conclusions of external audit.