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Corporate Governance

JL is fully-owned by JL-Fondet (the JL Foundation) with ownership exercised through Vesterhavet A/S, also fully-owned by JL-Fondet.

Management of JL is carried out by a non-executive Board of Directors and JL’s Executive Management. The non-executive Board is appointed by JL-Fondet.

The principles of corporate governance applied by JL are by and large determined by JL’s Articles of Association, the standing orders of the Board of Directors and the powers vested in Executive Management.

Although JL is privately owned, as a limited company it acknowledges the importance of the guidelines originally issued in 2001 by the Nørby Committee (a committee set up by the Danish Ministry of Economic and Business Affairs) and updated in 2005 by the Copenhagen Stock Exchange Committee on Corporate Governance. JL complies with the guidelines to the greatest possible extent when relevant for a company owned by a foundation.

Board of Directors and Executive Management

JL’s standing orders for the Board of Directors specify that they and the Executive Management are jointly responsible for the management and organisation of the company.

Day-to-day management of the company is carried out by the Executive Management in accordance with the standing orders of the Board of Directors.

The Board of Directors ensures that a strategy plan and an annual budget are drawn up and that monthly and quarterly reports are prepared.

The Board of Directors appoints the Executive Management. Exceptional or major dispositions may only be implemented by the Executive Management on the basis of specific authorisation granted by the Board of Directors.

During 2005, the Board of Directors met six times, including an all-day seminar focusing on overall goals and strategies. In addition, the Board of Directors also approved a number of resolutions in relation to sale and purchase of vessels.

The Board of Directors has eight members, three of whom are elected by the employees according to Danish legislation.

Members of the Board of Directors have one-year tenure but may stand for re-election. At the end of 2005, the average length of service of the Board of Directors was 4.6 years.

The relationship to Vesterhavet A/S and JL-Fondet

Vesterhavet A/S holds the entire share capital in JL on behalf of JL-Fondet. Vesterhavet’s policy is to grant the greatest possible degree of autonomy to its subsidiaries, allowing JL’s Board of Directors and Executive Management extensive independence in strategy formulation and execution.

JL’s Chairman and Vice Chairman and the Executive Management met the Board of Directors of Vesterhavet A/S and JL-Fondet twice in 2005 to inform about the business of JL.

Financial management

JL’s financial management comprises long-term financial projections and annual budgets followed up in quarterly and monthly reports.

Internal quarterly reports include profit forecasts for the full year and semi-annual estimates for the next year.

Compliance manual

To ensure JL compliance with national and international competition regulations, an international competition law manual has been prepared and made available to all employees. The manual is kept updated.

Risk management

JL’s policy for managing operational and financial risks is described on p. 28.