Corporate governance i Danmark: Udfordringer og løsninger

Mikkel Kjær Harms

Student thesis: Master thesis


The practice of corporate governance is based upon a simple dilemma: How can a Prin-cipal be sure that an Agent is acting in his very best interest? The complexity of this dilemma however, when applied to a large modern listed company, is everything but simple. When the principal is not just one person, but many small shareholders, that doesn’t have the time, opportunity or acces to monitor the agent, the first layer of com-plexity is introduced. When thinking about how and with what measures an alignement of interests should happen – the next layer is added. Finally, when trying to secure a relevant flow of information from a large and complex organization to distant share-holders - the third layer shows itself. In order to monitor and help the agent, or in this context the CEO, companies hire a professional board, to undertake this task. A lot of corporate governance is hence evolv-ing these parties, the CEO and The Board. But also other mechanisms such as external auditors, legislation and market powers are influencing the area. The Danish corporate governance environment amongst the biggest companies is char-achterized by large and dominating owners. This means that these have the power to select the majority of the board members and thereby secure their interest. This gives root to a potential problem for the minority shareholder, who has no choice than to trust the dominating owner. From scandals like “Nordisk Fjer” some common rules of engagement have emerged. For instance is the Danish legislation changed, so it now a days is a legal demand to have a two tier board system. To day it seems that corporate governance is tight connected with the “comply or ex-plain - soft law principle”. The recommandations in this system are, if applied right, contributing to reduce the risk of a new big corporate governance failure – which is good for shareholders and stakeholders to the company. However the trend is that these recommendations are changing from concrete recommendations to issues that a board should think about. It is easier to comply when you only have to think, than if you need to act. In this way the soft law system seems more eager to make sure that all companies are complying rather than focusing on preventing the next big scandal.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2014
Number of pages77