Directors’ Duties in Denmark

>> Powers and Duties in Denmark

Duties – skill and care

In exercising directors’ powers, you are required to exhibit a degree of skill and diligence as would be expected from a person with your knowledge and experience.

You must also exercise a degree of care in your actions as a director. When establishing an acceptable level of care the test applied is ‘what a reasonable person would do when looking after their own affairs’.

Duties – general

As a company director, you must act in a way which you think is most likely to promote the success of the company. You need to consider a number of statutory factors, including the long term consequences of your decisions, the company’s reputation and the interests of other stakeholders such as employees and the community.

The Board of Directors shall perform the overall strategic management duties, ensuring proper organisation of the company’s business and properly supervise all management. Moreover, the board of directors shall ensure that:

  • the book-keeping and financial reporting procedures are carried out in a satisfactory manner (for the company)
  • adequate risk management and internal control procedures have been established
  • the board of directors receives ongoing information on the company’s financial position
  • the management board performs its duties correctly and in accordance with the instructions set forth by the board of directors
  • the financial resources of the limited liability company are adequate at all times, and that the company has sufficient liquidity to meet its current and future liabilities as they fall due. The directors of a limited liability company are therefore required to continuously assess the financial position and ensure that the existing capital resources are adequate
  • if it is established that the equity of a limited liability company represents less than half of the subscribed capital, the management of the company must ensure that a general meeting is held within six months to decide on how to proceed with increasing the company capital

Duties – other

There are many other areas of law that impose duties on directors and senior managers. Matters likely to be of particular relevance, depending upon the nature of the entity and its activities,  are set out below:

  • issuing notices of General Meetings
  • preparation and signing of draft annual reports
  • engagement and dismissal of the Management
  • determining the maximum dividend that may be adopted by the General Meeting
  • execution of merger/demerger plans and merger/demerger statements
  • ensure that all shareholders are treated equally
  • duty to convene the General Meeting within 6 months after more than half of a company’s share capital is lost
  • recording minutes/resolutions of the board meetings, and ensuring that all board members sign the minutes/resolutions
  • presenting the audit book of every meeting and signing all records in the audit book
  • grant power of procurement
  • establishing rules of procedures containing further provisions as to duties and powers of the directors
  • lay down guidelines for information to the employees and the shareholders of the company and to the public regarding matters of the company
  • members of the board of directors, executive officers, valuation experts and scrutinisers, including their assistants and alternates, may not make any unauthorised disclosures of any information gained in the performance  of their duties
  • members of the board of directors and executive officers may not engage in any speculative transactions involving shares in the company, either directly or indirectly
  • bribery and money-laundering is prohibited under the Criminal Code for every individual, including directors. They risk liability both personally via damages and prison sentences and towards the company who may hold them liable for any damage it has suffered as a consequence of their actions. Please note, there is no legislation regarding bribery and anti-money laundering that is directly aimed at directors
  • not to obtain loans or security from the company
  • not to be grossly negligent or wilfully breach any health and safety or environmental provisions under law, including the Danish Working Environment Act as you may face financial consequences or criminal charges. Examples of areas the company, and indirectly the directors, must ensure under the health and safety regulations are:
    • that work is performed in a safe and healthy manner, in a safe working place
    • the hours worked are of a safe and healthy level
    • chemicals and other material is handled in a safe and healthy way.

Latest version updated 4th April 2018

Country Breakdown

5.7

Million

Population

kr

Danish Krone

Currency

$ 305

Billion

GDP

2.211

Million

km2