Qred is a company licensed to conduct banking business in accordance with the Banking and Financing Business Act (2004:297).
The Annual General Meeting is Qred's highest decision-making body, where shareholders exercise their voting rights and make decisions on, among other things, the balance sheet and income statement in the annual report, discharge from liability, board members for the coming year and election of auditors.
Qred's Board of Directors meets at least four times a year and must decide on the internal rules for internal governance and control. The Board is responsible for Qred's organization and management of its affairs in accordance with, among other things, the Danish Companies Act, and has overall responsibility for ensuring that operations are conducted in accordance with good internal governance and control.
Qred's internal governance and control is formalized through internal rules in the form of policies and instructions as well as supporting routine descriptions, process descriptions and checklists. The Board of Directors meets at least four times a year and must decide on the internal rules for internal governance and control, while the CEO is responsible for implementing them in Qred's operations in accordance with the Board's instructions.
The Board of Directors is also responsible for ensuring that Qred conducts its activities in an ethically responsible and professional manner, that conflicts of interest are identified and managed appropriately, and that Qred maintains a healthy risk culture.
The Chairman of the Board leads the work of the Board and ensures that the Board fulfills its obligations under the Companies Act and other applicable rules. Through contact with the CEO, the Chairman of the Board shall follow Qred's development.
Qred's Chairman of the Board is responsible for conducting an annual suitability assessment to ensure that board members, the CEO and management are individually fit for their duties at all times. This involves an assessment of whether they:
The suitability assessments and results are documented.
Committees To support the Board in certain specific areas, the Board has established two committees that are responsible for preparing the basis for decisions on topics that fall within each committee's competence:
The members of the Remuneration Committee are appointed annually and consist of the Chairman of the Board and one additional Board member. The Remuneration Committee meets twice a year, where the CEO and other senior executives may be invited to participate in the meetings.
The Risk and Audit Committee meets quarterly prior to the board meeting and consists of 2-3 board members and 1-3 senior executives from the company. One of the members of the committee shall be appointed by the board as chairman of the committee. At least one member of the committee must have experience in identifying, assessing and managing risks in the size and complexity of the company, and at least one member must have accounting or auditing expertise.
The committees shall assist the Board of Directors with expertise and prepare proposals, advice and preparation of matters within their respective areas. The work of the committees is regulated in more detail in instructions.
The Board of Directors appoints Qred's CEO, who is authorized to make decisions on all matters that do not need to be decided by the Board or the general meeting. The CEO is responsible for the day-to-day management in accordance with the Board of Directors' instructions and for the obligations incumbent on the CEO under external regulations.
The CEO is responsible for ensuring that policies, instructions and routine and process descriptions are implemented within the organization and that all employees have access to relevant documentation.
The company's CEO has an advisory forum, the Management Team, with the purpose of ensuring that the company's activities are conducted in a sound and efficient manner. In its work, the Management Team shall always take into account the interests of the company and its customers. The management team shall normally meet when necessary, but at least once a month. The CEO shall convene and chair the meetings, which shall have a fixed agenda and be minuted.
Three lines of defense
Qred uses the principle of three lines of defense to define where in the organization the responsibility and control of the organization's risk-taking should be placed.
The first line of defense consists of the business operations, including the CEO, who is responsible for and controls the daily risk management and compliance. They are also responsible for performing checks on the processes that Qred uses, in the form of internal controls.
The second line of defense consists of the risk management function and the compliance function, which among other things monitors, controls and reports on Qred's risks and how the company complies with internal and external regulations. The control functions in the second line of defense report to the CEO and are primarily the CEO's independent control body, but must report directly to both the board and the CEO.
The third line of defense consists of internal audit. Internal Audit reports directly to the Board of Directors and is the Board's independent control body. The third line of defense reviews and assesses the first and second lines of defense.
Qred has a remuneration policy (the "Policy") whose purpose is to describe and establish the principles for how the company's remuneration is designed, managed and continuously monitored. The Policy shall be consistent with and promote effective risk management and discourage excessive risk-taking. Furthermore, the policy must ensure that customers' interests are not adversely affected by the company's incentive structure. The remuneration policy shall promote Qred's ability to attract and retain competent employees and contribute to ensuring that the company's long-term goals can be achieved.
The Board of Directors is ultimately responsible for the content, establishment, implementation and compliance with the Remuneration Policy. The policy shall be regularly, at least once a year, reviewed and if necessary updated before approval by the Board of Directors. A risk analysis shall form the basis for the board's decision to adopt the policy. The board of directors shall furthermore decide whether:
The Board of Directors has established a Remuneration Committee.
The Remuneration Committee is responsible for monitoring and assessing the company's remuneration policy at least once a year and for preparing decisions on remuneration issues for resolution by the Board of Directors. In the follow-up of the remuneration policy, the Remuneration Committee shall also monitor the development of unjustified pay differences between women and men. The Board of Directors shall, where applicable, comply with the remuneration decisions made by the annual general meeting.
Risk management process
An annual risk management analysis of the company shall be conducted to identify employees whose duties have a material impact on the company's risk profile. The analysis must take into account all risks to which the company is or may be exposed, including the risks associated with this policy and the company's remuneration policy.
General principles
The company's remuneration policy shall be designed in a way that is consistent with and promotes sound and effective risk management and prevents excessive risk-taking. The remuneration policy shall encourage employees to perform well and help the company attract and retain competent employees. Remuneration policy shall be applied in a gender-neutral manner.
Fixed remuneration
Fixed salary
The basis of the company's remuneration policy is a fixed salary. Fixed salary is determined on an ongoing basis, with the first review normally taking place 12 months after the start of employment. As a general rule, salary reviews shall take place once a year. Employees' fixed salaries must be determined on the basis of objective criteria and be in line with market conditions.
For new hires, the fixed salary shall be determined based on the market situation for the corresponding profile and the value that the employee is expected to add to the company. At subsequent salary reviews and when changing the job function, an individual assessment must form the basis for determining the salary, based on parameters such as work performance, independence, initiative, responsibility and personal development.
Discriminatory or other unjustified differences between employees' fixed salaries must not occur. In connection with a salary review, the manager must conduct a development and salary discussion with the employee where the connection between work tasks, work results and performance in general and salary development is made clear to the employee. Vacation arrangements are determined in accordance with applicable legislation and individually in connection with hiring and salary review.
Variable remuneration
The Board of Directors decides on variable remuneration for the management team and employees whose tasks have a significant impact on the company's risk profile. The CEO may decide whether other employees (outside the above group) shall be eligible to receive variable remuneration.
The company applies a system of variable remuneration in the form of performance-based bonuses to the CEO, the management team and most functions and business units. Performance-based bonuses must be designed in a way that meets the criteria in this section and the policy in general. The criteria for receiving variable remuneration shall be based on the company's overall performance as well as the employee's individual performance and the performance of the business unit where the employee works.
The variable remuneration should be based on:
Performance that forms the basis for the calculation of variable remuneration shall mainly be based on risk-adjusted profit targets. The company shall take into account both current and future risks as well as capital costs and liquidity needs. The company shall ensure that variable remuneration is based on long-term sustainable performance by assessing performance in a multi-year perspective.
Furthermore, the company's underlying economic cycle and business risks must be taken into account when approving and paying out the variable remuneration.
When determining variable remuneration, the assessment of the employees' individual results and performance must take into account both financial and non-financial factors. Among the non-financial factors, the company must consider compliance with internal rules, accountability, customer satisfaction and protection of customers' interests, among others.
If the company's control functions for risk management, compliance and internal audit are employed by the company and are entitled to variable remuneration, the company must ensure that such remuneration is determined on the basis of objectives linked to each control function, independent of the performance of the business areas they review.
The company must ensure that any variable remuneration does not affect the company's ability to maintain an adequate capital base or to strengthen the capital base if necessary. The company shall maintain a reasonable balance between employees' fixed and variable remuneration. The employees' fixed remuneration shall always be at a sufficiently high level to set the variable part of the remuneration to zero. The total variable remuneration received by employees must never be at a level that risks undermining the company's capital base and ability to generate a positive result in the long term. The total variable remuneration to an employee must never exceed 100% of the employee's annual fixed remuneration. The company's sales function, which is completely separate from the company's credit function and credit decisions, is exempt from the above limitation, but may never exceed SEK 100,000 per month in variable remuneration.
Guaranteed variable remuneration
As a general rule, the company shall not provide variable remuneration that is guaranteed to some employees. If there are special reasons, the board of directors may decide on guaranteed variable remuneration for an employee, but only in connection with new employment and only during the employee's first year of employment.
Qred has established an ethical policy with the purpose of ensuring that business is conducted in an ethically responsible and professional manner in accordance with Qred's internal and external rules. The purpose of this policy is to further promote transparency, integrity and a corporate culture that protects Qred's activities against corruption. The policy establishes common standards to promote Qred's ethical approach and to facilitate employees' handling of situations where applicable rules are missing or provide limited guidance.
Qred has established a policy and instructions for handling conflicts of interest that may arise in the company. Qred's employees are always expected to act in Qred's best interest and exercise good judgment that is not influenced by private interests or divided loyalties. No employee may participate in the processing of a case or make a credit decision that relates to a relative, a relative's business or otherwise where there may be a risk of fraud. An employee must also not handle cases where the employee has a personal interest or cases where such interest is held by a relative of the employee or a company in which the employee or a relative of the employee has a significant interest. In such a situation, the employee must be exempt from credit processing and credit decision. Qred's employees may not purchase goods or services from related parties without prior approval from the CEO, and the CEO may not purchase goods or services from related parties without prior approval from the Board of Directors.
