Recommendations for professional governance of commercial foundations

The Committee of Professional Governance of Commercial Foundations has drafted recommendations for professional governance of commercial foundations. These recommendations will now go out for consultation and the time limit for comments is 5 December 2014.

The committee has published its recommendations under the new Act on Commercial Foundations. The recommendations are so-called "soft law" which the boards of trustees are not obligated to observe. But if a commercial foundation chooses not to observe the recommendations wholly or partly, they are required to report why.

In the future, the boards of trustees must consider questions concerning increased openness and transparency, including ensuring transparent procedures in connection with the appointment of new board members and giving an account of the board's competencies. According to the new recommendations, board members should not be appointed for more than four years at a time, and the board should evaluate its work. The total fee of each member of the foundation and any subsidiaries should be reported. At least 1/4 of the members should be independent members, and too many dual roles - membership of both the foundation's and the subsidiary's boards - should be avoided.

The recommendations are expected to come into force at the same time as the Act on Commercial Foundations on 1 January 2015.

contacts

Jim Øksnebjerg

Partner

Torsten Hoffmeyer

Senior Attorney