EUR 500.00 For Business Accounts Only

Coloplast - 2018, December 5th

In general, Coloplast is in compliance with the Danish regulations relating to the organisation and procedures of the Annual General Meeting.

On November 1, 2018, the Company announced that Mr. L.S. Rasmussen will resign from his position as CEO to become the new Chairman of the board of directors as of this AGM. Mr. Rasmussen will be succeeded by Executive Vice President - Mr. Kristian Villumsen - as of the same date.

 

Under ITEM 5.1, it is proposed to re-appoint Mr. N.P. Louis Hansen as Vice Chairman of the board of directors. Although ECGS has no (major) concerns over the re-appointment of Mr. Louis-Hansen as such, it has some other remarks regarding the composition of Coloplast's board of directors: (i) there is insufficient independent representation on the audit committee; (ii) contrary to the Danish Recommendations on Corporate Governance no nomination- and remuneration committee has been established; (iii) there is insufficient female representation on the board; and (iv) there are no non-Danish members serving on the board. In light of abovementioned concerns, ECGS normally would have recommended opposition. However, considering the proxy card does not permit this, it recommends abstention instead.

Under ITEM 5.6, it is proposed to newly appoint Mr. L.S. Rasmussen as Chairman of the board of directors. ECGS questions the practice in which a current CEO becomes the chairman of the board of directors. While this may provide continuity, it risks undermining the board's supervisory function and may inhibit an objective assessment of management and strategy as well as the initiatives of the successor CEO. Best practice furthermore dictates that companies apply a reasonable 'cooling off' period before making such an appointment. ECGS therefore normally would have recommended opposition. However, considering that the proxy card does not permit this, it recommends abstention instead.

Under ITEM 6, the board of directors proposes to re-appoint PricewaterhouseCoopers as the Company’s statutory auditor. In light of the substantial amount of non-audit fees as well as the current term in office of the auditor, ECGS normally would have recommended opposition. However, considering that the proxy card does not permit this, it recommends abstention instead.

Finally, ECGS notes that, since 2011, Coloplast has been named as a defendant in individual lawsuits in various federal and state courts in the US, alleging injury resulting from use of transvaginal surgical mesh products designed to treat pelvic organ prolapse and stress urinary incontinence. To date, a total of DKK 4.7 billion has been paid and company management estimates that more than 95% of known lawsuits in the US have now been settled.