Carlsberg A/S : 2020 Statutory Corporate Governance Report

Form for reporting on the recommendations on corporate governance

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This form is meant as a tool for Danish companies with shares admitted to trading on a regulated market who wish to report on the company's compliance with the recommendations on corporate governance in a standard reporting format.

The recommendation text of this form does not replace the recommendations; reference is made to the recommendations on corporate governance with regard to preface, introduction and comments. The Committee's comments on the recommendations may be included as guidelines and inspiration for companies in their work on the recommendations. In this connection the comments are meant as a tool. The reporting on corporate governance itself should only be carried out in compliance with the specific recommendations of the Committee, and not according to the comments or guidelines.

The report must be composed in Danish and must be provided in a corporate governance report published as either part of the management commentary on the annual report or on the company's website with exact reference to the management commentary. The Committee believes that publication of the corporate governance report on the company's website - with exact reference to the report in the management commentary - creates the highest degree of transparency. Publication of the report on the company's website provides easier access for investors and other stakeholders.

Under the Financial Statements Act a publication on the company's website requires that the URL address - where the corporate governance report is published - is stated in the management commentary in the annual report. The URL address must be the internet address which can be used to access the report directly.

There are further requirements to the preparation of the report on corporate governance and how it is to be published. The detailed requirements are described in Executive order no. 558 of 1 June 2016 on Publication of Reports pursuant to the Financial Statements Act.

Notice: The form below contains the recommendations of the Committee on Corporate Governance of November 23, 2017. The recommendations are available on the website of the Committee on Corporate Governance www.corporategovernance.dk. Nasdaq Copenhagen A/S has decided to include the recommendations in the Rules for issuers of shares by January 3, 2018. This form may be used for the preparation of the report on corporate governance in annual reports concerning financial years commencing January 1, 2018 or later.

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"Comply or explain"

If a company deviates from parts of the recommendations, the company has to explain the reasons for the deviations, cf. section 107 b (1) (iii) of the Financial Statements Act. The company has to explain why it has chosen not to comply with a recommendation and what it has chosen to do instead. Failure to comply with a recommendation is not considered a breach of rules, but merely implies that the board of directors of the company has chosen a different approach. The market must decide whether deviations are justified and whether the explanation is satisfactory. A good explanation provides specific insight for stakeholders to be able to decide on any investments. In order to create the transparency necessary for investors, companies must respond to each recommendation and provide information on whether or not they will comply with the recommendation in question.

Note that the reporting must reflect the current style of management at the time of the reporting. In the event of significant changes during the year, or after the balance sheet date, descriptions of the changes should be included in the corporate governance report. Companies must consider each of the recommendations.

If the company complies partially with a recommendation the company must specify which parts it is complying with, why it is deviating from the remaining part of the recommendation and what it has chosen to do instead.

The Committee has observed that many companies choose to provide supplementary information even in cases where the company complies with a recommendation. The Committee encourages companies to provide supplementary information where this increases transparency.

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The report concerns the financial year 1 January 2020 - 31 December 2020

Recommendation	The	The	The	The explanation for complying
	company	company	company	partially/not complying with the
	complies	complies	does not	recommendation
		partially	comply

1. Communication and interaction by the company with its investors and other stakeholders

1.1. Dialogue between company, shareholders and other stakeholders

1.1.1. The Committee recommends that the board of				Carlsberg aims at providing information and
			opportunities for dialogue to its shareholders
directors ensure ongoing dialogue between the company	X
		through regular publication of news, interim
and its shareholders so that the shareholders gain relevant
			reports, annual reports and general meetings.
insight into the company and in order for the board of
directors to be aware of the shareholders' views, interests				Carlsberg has an Investor Relations
and opinions in relation to the company.
				department that assists the Executive Board
				with its regular meetings and teleconferences
				with investors and analysts in or outside
				Denmark. Carlsberg has a separate section for
		4

Recommendation	The	The	The	The explanation for complying
	company	company	company	partially/not complying with the
	complies	complies	does not	recommendation
		partially	comply
				investor information on its website where it
				regularly provides comprehensive information
				about financial and operational issues and
				where all information announced to the
				market is easily and readily available.
				Investors (and others) can sign up on
				Carlsberg's investor portal to receive regular
				information from the company. Further, the
				Investor Relations department meets with
				proxy advisors to exchange views and in order
				for both Carlsberg and its stakeholders to gain
				a deeper understanding of each other.
				From time to time, the Chairmanship and the
				Remuneration Committee Chair meet with
				major shareholders to discuss specific matters
				raised by the shareholders.
				Due to Covid-19, many shareholder
				engagement meetings have been conducted
				digitally, which has worked to the satisfaction
				of all parties, given the circumstances.
1.1.2. The Committee recommends that the board of	X			Carlsberg has adopted a Communication Policy
directors adopt policies on the company's relationship with				and strategy. In its Communication Policy,
its stakeholders, including shareholders, and that the				Carlsberg identifies its key stakeholders and
board of directors ensure that the interests of the				their main interests in relation to the
stakeholders are respected in accordance with company				company.
policies.
				5

	Recommendation	The	The	The		The explanation for complying
		company	company	company		partially/not complying with the
		complies	complies	does not		recommendation
			partially	comply
						The Communication Policy and related
						procedures also serve to ensure that
						information of importance to investors (and
						other key stakeholders as relevant) is made
						available to them and published in accordance
						with applicable rules and regulations.
	1.1.3. The Committee recommends that the company		X			Carlsberg published quarterly reports in 2020
publish quarterly reports					on 4 February (full year 2019) and on 13
				August (1st half year) and trading statements
					on 30 April (Q1) and on 27 October (Q3).
						Carlsberg finds that half-year reporting is more
						appropriate due to the seasonality of its
						business and that Carlsberg historically has
						seen high volatility in quarterly earnings and
						margins as a result of phasing of costs.
						Carlsberg considers the high volatility as
						potentially misleading for the understanding of
						the underlying Group performance. For these
						reasons, Carlsberg finds half-yearly reporting
						more appropriate.
	1.2. General meeting
	1.2.1. The Committee recommends that in organising the	X				The Supervisory Board and the Executive
				Board promote active ownership, including
company's general meeting, the board of directors plans
				shareholders' attendance at general meetings
the meeting to support active ownership.
						• by announcing well in advance the date
						of the general meeting on its website;
					6

Recommendation	The	The	The	The explanation for complying
	company	company	company	partially/not complying with the
	complies	complies	does not	recommendation
		partially	comply
				• by distributing invitations to shareholders
				to general meetings to all shareholders
				either directly or through information on
				the company's website and through
				announcements on Nasdaq Copenhagen,
				and
				• by informing shareholders of their right
				to ask questions and submit proposals
				for the general meeting.
				All shareholders and other stakeholders are in
				addition invited to attend quarterly calls with
				Carlsberg's top management in relation to
				quarterly announcements and are able to ask
				questions and, as mentioned above, the
				Chairmanship and the Remuneration
				Committee Chair meet from time to time and
				often in connection with the annual general
				meeting with major shareholders to discuss
				specific matters raised by the shareholders.
				In 2020, Carlsberg was due to the Covid-19
				restrictions forced to exercise its contribution in
				its shareholders' active ownership primarily via
				digital means, including the AGM 2020.
1.2.2. The Committee recommends that proxies or votes	X			The proxies used for the general meeting
by post for the general meeting allow shareholders to				generally allow shareholders to consider each
consider each individual item on the agenda.				individual item on the agenda. This was also
				7

Recommendation	The	The	The		The explanation for complying
	company	company	company		partially/not complying with the
	complies	complies	does not		recommendation
		partially	comply
					the case with regard to the proxy for the
					Annual General Meeting in 2020.
1.3. Takeover bids
1.3.1. The Committee recommends that the company set	X				The Supervisory Board of Carlsberg has a
up contingency procedures in the event of takeover bids,					Takeover Manual with procedures and
				guidance in the event of a takeover offer.
from the time that the board of directors has reason to
				According to the Takeover Manual, the
believe that a takeover bid will be made. The contingency
				Supervisory Board is not at any time entitled
procedures should establish that the board of directors
				to take any steps that in reality prevents that
should not without the acceptance of the general meeting,
				a future takeover offer is presented to the
attempt to counter the takeover bid by making decisions
				shareholders at a General Meeting. The
which, in reality, prevent the shareholders from deciding
				Supervisory Board will in the event of a
on the takeover bid themselves.
				takeover offer, consider specifically what will
					be in the best interest of all shareholders (and
					more widely of the company) before it decides
					whether or not to present an offer to the
				shareholders.
				Carlsberg's articles of association do not
				contain any provisions that limit ownership or
				voting rights or that make it possible for the
				Supervisory Board generally to prevent
				takeover bids.
					Carlsberg's Supervisory Board will consider a
					potential bid to take over the company's
					shares in accordance with applicable
					legislation and the Takeover Manual.
					Carlsberg's principal shareholder, the
				8

	Recommendation	The	The	The		The explanation for complying
		company	company	company		partially/not complying with the
		complies	complies	does not		recommendation
			partially	comply
						Carlsberg Foundation, is obliged to hold at
						least 51% of the votes of the share capital of
						Carlsberg A/S according to its charter.
	2. Tasks and responsibilities of the board of directors
	2.1. Overall tasks and responsibilities
	2.1.1. The Committee recommends that at least once	X				The Supervisory Board once a year defines its
annually the board of directors consider the matters that					most important tasks and decides on an
				annual plan for the following year. In the
should be included in the board's performance of its work.
				board evaluation process the Supervisory
						Board considers whether all its responsibilities
						have been dealt with.
						Once a year, the Supervisory Board also
						reviews its rules of procedures in accordance
						with the annual plan and considers if any
						changes are required.
		X				The Supervisory Board discusses Carlsberg's
						strategy Sail22 and Carlsberg's overall
	2.1.2. The Committee recommends that at least once					organisation continuously and in particular in a
					dedicated annual strategy seminar. In 2020,
annually the board of directors consider the overall					the strategy seminar was conducted as a
strategy of the company with a view to ensuring value					virtual meeting due to the Covid-19
creation in the company.					restrictions. The Supervisory Board agreed that
						a virtual meeting is not an optimal format for
					strategy discussions and look forward to
					convening physically for the strategy session.
					9

Recommendation	The	The	The		The explanation for complying
	company	company	company		partially/not complying with the
	complies	complies	does not		recommendation
		partially	comply
2.1.3. The Committee recommends that the board of	X				The Supervisory Board regularly assesses
directors ensure that the company has a capital and share					whether the company's capital and share
structure which supports that the strategy and long-term					structures fulfill the interests of the Carlsberg
value creation of the company are in the best interest of					Group and its shareholders and supports the
the shareholders and the company, and that the board of					long-term profitable growth and development
directors explain this in the management commentary					of the business. This assessment is accounted
and/or on the company's website.					for in the Annual Report.
2.1.4. The Committee recommends that the board of	X				The Supervisory Board supervises the work of
directors annually review and approve guidelines for the					the Executive Board and has as part of its
				Rules of Procedures issued Guidelines for the
executive board; this includes establishing requirements
				Executive Board. These Guidelines (together
for the executive board's reporting to the board of
				with the Rules of Procedure for the
directors.
				Supervisory Board) are considered by the
					Supervisory Board approximately once a year.
					The Rules of Procedure for the Supervisory
					Board and the Guidelines for the Executive
					Board jointly set out the overall duties and
					obligations of the Executive Board, procedures
					for the Executive Board's reporting to the
					Supervisory Board and for other
					communication and decision processes
					between the two bodies.
2.1.5. The Committee recommends that at least once	X				In connection with its annual evaluation
annually, the board of directors discuss the composition,					process, the Supervisory Board also evaluates
developments, risks and succession plans of the executive					the composition and performance of the
board.					Executive Board and it has at least once a year
					a structured discussion of succession planning
					with regard to the Executive Board as well as a
				10

	Recommendation	The	The	The		The explanation for complying
		company	company	company		partially/not complying with the
		complies	complies	does not		recommendation
			partially	comply
						general review and discussion of talent
						management and succession planning in the
						company.
	2.2. Corporate social responsibility
		X				Carlsberg has adopted CSR policies and
						published them on its website and reports on
						its sustainability approach and initiatives in the
						Carlsberg Annual Report and the Group
						Sustainability Report. Carlsberg has a dedicated
						sustainability department and provides detailed
	2.2.1. The Committee recommends that the board of					information on the implementation of its
					sustainability initiatives, its long-term targets
directors adopt policies on corporate social responsibility.
				on each area and the progress it has made
						towards reaching these. In 2017, Carlsberg
						launched an ambitious sustainability
						programme "Together Towards Zero" and has
						also in 2020 made good progress on the
						programme as further described in the
						Carlsberg Group Sustainability Report.
	2.3. Chairman and vice-chairman of the board of directors
	2.3.1. The Committee recommends appointing a vice	X				The Supervisory Board has appointed a deputy
chairman of the board of directors, who will assume the					chairman who acts in the chairman's absence
responsibilities of the chairman in the event of the					and acts as an effective sounding board for the
chairman's absence, and who will also act as effective					chairman. The Rules of Procedure for the
sparring partner for the chairman.					Supervisory Board set out tasks etc. for the
						chairman and, in his absence, the deputy
						chairman. The chairman and the deputy
						chairman form the chairmanship of the
					11

	Recommendation	The	The	The		The explanation for complying
		company	company	company		partially/not complying with the
		complies	complies	does not		recommendation
			partially	comply
						company who prepare Supervisory Board
						meetings together with the Executive Board in
						accordance with an annual meeting plan.
	2.3.2. The Committee recommends that, if the board of	X				The chairman does not participate in the day-
directors, in exceptional cases, asks the chairman of the					to-day management of the company and does
board of directors or other board members to perform					not carry out other tasks for the company than
special activities for the company, including briefly					handling the task as chairman of the company.
participating in the day-to-day management, a board					There were no exceptions to this in 2020.
resolution to that effect should be passed to ensure that
the board of directors maintains its independent, general
management and control function. Resolutions on the
chairman's or other board members' participation in day-
to-day management and the expected duration hereof
should be publicly announced.
	3. Composition and organisation of the board of directors
	3.1. Composition
	3.1.1. The Committee recommends that the board of	X				In accordance with its annual plan, the
					Supervisory Board once a year (on the basis
directors annually evaluate and in the management
				of a recommendation from the Nomination
commentary account for
				Committee) considers the skills that should be
• the competencies that it must have to best perform its
				represented on the board and takes this into
	tasks,					consideration when preparing proposals for
• the composition of the board of directors, and					new candidates for the Supervisory Board. A
• the special competencies of each member.					"Specification of Competencies required for
						the Supervisory Board in Carlsberg A/S" has
						been developed by the Supervisory Board, is
					12

	Recommendation	The	The	The		The explanation for complying
		company	company	company		partially/not complying with the
		complies	complies	does not		recommendation
			partially	comply
						reviewed annually and available on Carlsberg's
						website.
						The Annual Report and Carlsberg's website
						contain a section describing the composition of
						the Supervisory Board and also detailed
						information about each Supervisory Board
						member.
		X				The Supervisory Board at least once a year
						discusses the company's activities to ensure
						diversity at relevant management levels. The
						Supervisory Board has established objectives
						for diversity at the Supervisory Board level and
	3.1.2. The Committee recommends that the board of					in the annual report it accounts for the
					objectives and the progress made.
	directors annually discuss the company's activities to					The Supervisory Board reviewed and approved
	ensure relevant diversity at management levels and
					a Diversity & Inclusion policy in 2020 which is
	prepare and adopt a policy on diversity. The policy should
					published on the company's website.
	be published on the company's website.
					The company's actions and plans to increase
						the number of the underrepresented gender (in
						this case women) in senior management
						positions in the company is explained in more
						details in the Annual Report.
	3.1.3. The Committee recommends that the selection	X				The Nomination Committee heads the process
and nomination of candidates for the board of directors be					for selecting and nominating candidates for
				the Supervisory Board. In this process a
carried out through a careful and transparent process
				number of factors are taken into
	approved by the board of directors. When assessing its
					13

	Recommendation	The	The	The		The explanation for complying
		company	company	company		partially/not complying with the
		complies	complies	does not		recommendation
			partially	comply
	composition and nominating new candidates, the board of					consideration, including the Specification of
	directors should, in addition to the need for competencies					Competencies, the company's strategy, the
	and qualifications, take into consideration the need for					need for specific experience or skills as well as
	integration of new talent and diversity.					diversity.
						The Nomination Committee has a mandate to
						propose candidates to the Supervisory Board
						who will then decide on the final nomination to
					the Annual General Meeting of candidates for
					the Supervisory Board.
	3.1.4. The Committee recommends that the notice	X				Carlsberg's notices of a general meeting
					include the recommended information about
convening a general meeting where the agenda includes				the candidates for the Supervisory Board in
the election of members to the board of directors, include				relation to both new candidates and
(in addition to the statutory requirements) a description of				candidates that are proposed for re-election.
the qualifications of nominated candidates, including
information about the candidates'					Carlsberg lists in the Annual Report and on its
• other executive functions, including positions on					website the Supervisory Board members with
	executive boards, boards of directors and supervisory					links to the Carlsberg Foundation and therefore
	boards, including board committees, in Danish and					are not independent of Carlsberg as defined in
	foreign enterprises, and					the recommendations. The five Supervisory
• demanding organisational tasks.					Board members that are considered
						independent as defined in the
	Furthermore, it should be indicated if the candidates to the					recommendations are Lars Fruergaard
	board of directors are considered independent.					Jørgensen, Richard Burrows, Magdi Batato,
						Lilian Biner and Domitille Doat-Le Bigot.
	3.1.5. The Committee recommends that members of the	X				No member of Carlsberg's executive board is
					member of the Supervisory Board.
company's executive board be not members of the board
of directors and that a resigning chief executive officer be
					14

	Recommendation	The	The	The		The explanation for complying
		company	company	company		partially/not complying with the
		complies	complies	does not		recommendation
			partially	comply
	not directly elected as chairman or vice chairman for the					Carlsberg has not had nor does Carlsberg plan
	same company.					to have a resigning CEO directly elected as
						chair or deputy chair.
	3.1.6. The Committee recommends that members of the	X				According to the Company's Articles of
					Association, section 27(3), Supervisory Board
board of directors elected by the general meeting be up
				members are elected for one year at a time.
for election every year at the annual general meeting.
				Re-election is possible.
	3.2. Independence of the board of directors
	3.2.1. The Committee recommends that at least half of	X				Five of the ten members of Carlsberg's
					Supervisory Board elected by the Annual
the members of the board of directors elected by the
				General Meeting have close links to Carlsberg's
general meeting be independent persons, in order for the
				principal shareholder, the Carlsberg Foundation
board of directors to be able to act independently of
				as they make up the Foundation's Board. The
special interests.
				other five members elected by the general
To be considered independent, this person may not:
				meeting have an international business
• be or within the past five years have been a member of					background. These five members with an
				international business background are all
	the executive board, or senior staff member in the
					independent as defined in the
	company, a subsidiary or an associated company,
					recommendations.
• within the last five years, have received large
	emoluments from the company/group, a subsidiary or
	an associated company in a different capacity than as
	member of the board of directors,
	• represent or be associated with a controlling
	shareholder,
	• within the past year, have had significant business
	relations (e.g. personally or indirectly as partner or
	employee, shareholder, customer, supplier or member
	of management in companies with corresponding
					15

Recommendation	The		The	The	The explanation for complying
	company		company	company	partially/not complying with the
	complies		complies	does not	recommendation
			partially	comply
connection) with the company, a subsidiary or an
associated company.
• be or within the past three years have been employed
or been a partner in the same company as the auditor
elected by the general meeting,
• be the chief executive officer in a company with cross-
memberships with the company,
• have been a member of the board of directors for more
than 12 years, or
• be a close relative with persons who are not considered
independent.
Even if a member of the board of directors is not covered
by the above criteria, certain conditions may exist that will
lead the board of directors to decide that one or more
members cannot be regarded as independent.
3.3. Members of the board of directors and the number of other management functions
3.3.1. The Committee recommends that each member of	X				Each member of the Supervisory Board is
the board of directors assess the expected time					responsible for assessing the expected time
commitment for each function so that the member does					commitment for the functions they carry out to
not take on more functions than he/she can complete at a					ensure that they each have the necessary time
satisfactory level for the company.					to carry out their tasks as board members in
					Carlsberg. This obligation is also set out in the
					Rules of Procedure and in a Letter of
					Appointment (a "board contract" setting out the
					fundamental duties of Supervisory Board
					members elected by the Annual General
					Meeting) which all Supervisory Board members
					have signed.
					16

Recommendation	The	The	The	The explanation for complying
	company	company	company	partially/not complying with the
	complies	complies	does not	recommendation
		partially	comply

X	The Annual Report (and the Company's
3.3.2. The Committee recommends that the	website) contains this information in the
section describing each member of the
management commentary, in addition to the provisions	Supervisory Board.
laid down by legislation, includes the following information
about the members of the board of directors:	Carlsberg explains in the Annual Report and
• the position of the relevant person,	on its website which Supervisory Board
• the age and gender of the person in question,	members have links to the Carlsberg
• the person's competencies and qualifications that are	Foundation and therefore are not independent
relevant to the company	of Carlsberg as defined in the
• whether the member is considered independent,	recommendations.
• the member's date of appointment to the board of	The 2020 Annual Report contains information
directors,
• expiry of the current election term,	about each Supervisory Board member's
• the member's participation in the meetings on the	occupation and about all managerial positions
board of directors and committee meetings,	and directorships at other companies in
• other management functions, including memberships in	Denmark and abroad, as well as demanding
executive boards, boards of directors, and supervisory	organisational tasks, held by members of the
boards, including board committees in Danish and	Supervisory Board.
foreign enterprises and demanding organisational tasks,	For 2020, information on the individual
and
• the number of shares, options, warrants and similar	holdings of shares in Carlsberg by Supervisory
owned by the member in the company and other group	Board members is included in the
companies, as well as changes to the member's	remuneration report, which is now a separate
portfolio of the mentioned securities which have	document from the Annual Report.
occurred during the financial year.

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	Recommendation	The	The	The		The explanation for complying
		company	company	company		partially/not complying with the
		complies	complies	does not		recommendation
			partially	comply
	3.3.3. The Committee recommends that the annual	X				As part of the annual evaluation process, the
					Supervisory Board members are asked to
evaluation procedure, cf. section 3.5, include an
				consider and discuss with the Chairman in the
evaluation of what is regarded as a reasonable level for
				1:1 evaluation conversation what is regarded
the number of other management functions, where the
			as a reasonable level for the number of other
number, level and complexity of the other individual
			management functions.
management functions are taken into account.
	3.4. Board committees
	3.4.1. The Committee recommends that the company	X				The Annual Report and the Company website
					contain the information recommended for all
publish the following on the company's website:
				three board committees.
• the terms of reference of the board committees,
				The Terms of Reference for each committee are
• the most important activities of the committees during					approved by the Supervisory Board and
	the year and the number of meetings held by each					reviewed annually.
	committee, and
• the names of the members of each committee,
	including the chairmen of the committees, as well as
	information regarding which members are independent
	members and which members have special
	competencies.
	3.4.2. The Committee recommends that a majority of the		X			According to the terms of reference for each
members of a board committee be independent.					committee, the majority of the committee
						members must be independent members of the
						Supervisory Board. In 2020, all four Audit
						Committee members were independent in
					accordance with the criteria set out in the
					recommendations, three of the four members
						of the Remuneration Committee were
					18

	Recommendation	The	The	The		The explanation for complying
			company	company	company		partially/not complying with the
			complies	complies	does not		recommendation
				partially	comply
							independent while two of the four members of
							the Nomination Committee are independent
			X				The Supervisory Board established an Audit
							Committee in 2009. In 2020 the Audit
						Committee fulfilled all tasks set out in its
						terms of reference. The work of the committee
						is described in the Annual Report (the
						Corporate Governance section).
	3.4.3. The Committee recommends that the members of					The Audit Committee is appointed for one year
					at a time. In 2020, Carlsberg's Audit
	the board of directors set up an audit committeeand that
					Committee had four members appointed by the
	a chairman is appointed who is not the chairman of the
				Supervisory Board: Lilian Fossum Biner (Chair),
	board of directors.
				Richard Burrows, Magdi Batato and Lars
						Fruergaard Jørgensen. The Audit Committee is
						appointed for one year at a time. All four
						members are independent in accordance with
						the definition in the recommendations and all
						have expertise and experience of relevance to
						the company's sector and several members
							have qualifications within accounting and audit.
	3.4.4. The Committee recommends that, prior to the	X				The Audit Committee has five regular meetings
					every year in accordance with a detailed annual
approval of the annual report and other financial reports,
				meeting plan, and in addition arranges ad hoc
the audit committee monitor and report to the board of
				meeting when relevant. Prior to the approval of
directors about:
				the annual report and other financial reports,
•	significant accounting policies,
				the Audit Committee monitors and reports to
•	significant accounting estimates,					the Supervisory Board on the recommended
	• related party transactions, and					matters.
						19

	Recommendation	The	The	The		The explanation for complying
		company	company	company		partially/not complying with the
		complies	complies	does not		recommendation
			partially	comply
	• uncertainties and risks, including in relation to the
	outlook for the current year.
	3.4.5. The Committee recommends that the audit	X				Carlsberg has established an internal audit
					function. The head of the internal audit function
committee:
				participates in all Audit Committee meetings
• annually assesses the need for an internal audit
				and reports to the Audit Committee on all
	function and, in such a case, presents mandates and					significant matters, including the executive
	recommendations on selecting, appointing and					board's follow-up on the conclusions and
	removing the head of any internal audit function and					recommendations of the internal audit function.
	on the budget of the internal audit function,					Once a year, the Audit Committee evaluates
• ensure that if an internal audit has been established, a					the internal audit function and monitors that it
	description of its functions is available and approved by					has adequate resources and competencies.
	the board of directors,
• ensure that if an internal audit has been established,					The work of the internal audit function is
	adequate resources and competencies are allocated to					further described in the Annual Report.
	carry out the work, and
• monitor the executive board's follow-up on the
	conclusions and recommendations of the internal audit
	function.
	3.4.6. The Committee recommends that the board of	X				The Supervisory Board has a Nomination
					Committee that works in accordance with
directors establish a nomination committee,which is at					Terms of Reference set out by the Supervisory
	least, responsible for the following preparatory tasks:					Board. The Terms of Reference are available on
	• describing the qualifications required by the board of					the company's website and the duties of the
					committee comprises all of the recommended
	directors and the executive board and for a given
					preparatory tasks as well as the following:
	position, indicating the time expected to be spent
	carrying out a specific position, as well as assessing					• Evaluation and recommendation to the
	the competencies, knowledge and experience found in
				Supervisory Board with regard to potential
	the two governing bodies,
					training and updating of the expertise and skills
					20

	Recommendation	The	The	The		The explanation for complying
		company	company	company		partially/not complying with the
		complies	complies	does not		recommendation
			partially	comply
	• annually assessing the structure, size, composition and					of the Supervisory Board and the Executive
	results of the board of directors and the executive					Board
	board and recommend any changes to the board of					• Recommendations to the Supervisory Board
	directors,
	• annually assessing the competencies, knowledge,				with regard to diversity on the Supervisory
	experience and succession of the individual members				Board and the Company's objectives for such
	of management and report to the board of directors in				diversity and monitoring and advising the
	this respect,				Supervisory Board on the overall succession
	• recommending candidates for the board of directors				planning for the Executive Committee.
	and the executive board, and
• proposing an action plan to the board of directors on
	the future composition of the board of directors,
	including proposals for specific changes.
	3.4.7. The Committee recommends that the board of	X				The Supervisory Board has a Remuneration
directors establish a remuneration committee,which is at
				Committee, which works in accordance with
	least, responsible for the following preparatory tasks:
					Terms of Reference set out by the Supervisory
	• recommending the remuneration policy (including the
					Board.
	"General Guidelines for incentive-based
	Remuneration") to the board of directors and the					The Terms of Reference are available on the
	executive board for approval by the board of directors					Company's website and the duties of the
	prior to approval by the general meeting,					committee comprises all of the recommended
	• making proposals to the board of directors on					tasks as well as monitoring and advising the
	remuneration for members of the board of directors					Supervisory Board on any major changes to
	and the executive board, as well as ensuring that the					the policy on senior employee benefit
	remuneration is in compliance with the company's					structures for the Group, including for the
	remuneration policy and the assessment of the					Executive Committee.
	performance of the persons concerned. The committee
	should have information on the total remuneration that
					21

	Recommendation	The	The	The		The explanation for complying
		company	company	company		partially/not complying with the
		complies	complies	does not		recommendation
			partially	comply
	members of the board of directors and the executive
	board receive from other companies in the group,
	• recommending a remuneration policy applicable for the
	company in general and
	• assisting with the preparation of the annual
	remuneration report.
	3.4.8. The Committee recommends that the	X				The Remuneration Committee uses Mercer for
	remuneration committee do not consult with the same					ad hoc external advise and is satisfied as to the
	external advisers as the executive board of the company.				independence of Mercer.
	3.5. Evaluation of the performance of the board of	directors	and the executive board
	3.5.1. The Committee recommends that the board of		X			Once a year, the chairman of the Supervisory
					Board heads a structured evaluation of the
directors establish an evaluation procedure for an annual
				board's work, accomplishments and
evaluation of the board of directors and the individual
				composition. The evaluation process takes
members. External assistance should be obtained at least
				place in accordance with written procedures
every third year. The evaluation should inter alia include:
				established by the Supervisory Board on the
• contribution and results,
				basis of a recommendation from the
• cooperation with the executive board,					Nomination Committee.
• the chairman's leadership of the board of directors,
• the composition of the board of directors (including					The chairman conducted in Q4 2020 1:1
	competencies, diversity and the number of members),
					evaluation meetings with each Supervisory
• the work in the committees and the committee
				Board member based on a detailed
	structure, and
					questionnaire filled in and submitted in advance
• the organisation and quality of the material that is
				by each member, covering together the
	submitted to the board of directors.
					recommended topics. The chairman then
	The evaluation procedure and the general conclusions
				prepared a report on the outcome of the
	should be described in the management commentary and				evaluation process to the Supervisory Board
	on the company's website. The chairman should account					and this report formed the basis for a
					22

	Recommendation	The	The	The	The explanation for complying
		company	company	company	partially/not complying with the
		complies	complies	does not	recommendation
			partially	comply
	for the evaluation of the board of directors, including the				discussion of the matter in the Supervisory
	process and general conclusions on the general meeting				Board. Finally, the evaluation process includes
	prior to the election of the board of directors.				a meeting without the chairman (headed by the
					deputy chairman) at which the performance of
					the chairman is discussed.
					The Supervisory Board, headed by the
					chairman, and on the basis of a
					recommendation from the Nomination
					Committee, considers regularly and at least
					once a year in connection with the annual
					evaluation of the Supervisory Board, if there
					are areas where members' expertise and skills
					need to be updated and whether the
					Supervisory Board's Specification of
					Competencies should be updated.
					In 2020 the Supervisory Board assessed that
					the time was not right to engage external
					assistance for the evaluation.
	3.5.2. The Committee recommends that at least once	X			The evaluation headed by the chairman of the
				Supervisory Board also includes an evaluation
annually, the board of directors evaluate the work and				of the cooperation between the Supervisory
performance of the executive board in accordance with				Board and the Executive Board and the work,
pre-defined criteria. Furthermore, the board of directors				accomplishments and composition of the
	should evaluate the need for changes to the structure and				Executive Board. The process includes a
	composition of the executive board, in light of the				Supervisory Board meeting without the
	company's strategy.				presence of the Executive Board at which the
					performance of and cooperation with the
					23

	Recommendation	The	The	The		The explanation for complying
		company	company	company		partially/not complying with the
		complies	complies	does not		recommendation
			partially	comply
						Executive Board is discussed. The Supervisory
						Board continuously considers the appropriate
						composition of the executive committee,
						including the executive board and also
						succession planning.
		X				The Supervisory Board has an ongoing dialogue
	3.5.3. The Committee recommends that the executive					among itself and with the Executive Board on
					the cooperation between the Supervisory Board
board and the board of directors establish a procedure					and the Executive Board and further, the
according to which their cooperation is evaluated annually					Supervisory Board has issued procedures on its
through a formalised dialogue between the chairman of					evaluation process which include an annual
the board of directors and the chief executive officer, and					formalized dialogue between the chairmanship
that the outcome of the evaluation be presented to the					and the Executive Board as well as each
board of directors.					member of the broader Executive Committee,
						the outcome of which is presented to and
						discussed by the Supervisory Board.
	4. Remuneration of management
	4.1. Form and content of the remuneration policy
	4.1.1. The Committee recommends that the board of	X				The Supervisory Board has adopted the
					Carlsberg Remuneration Policy which includes
	directors prepare a remuneration policy for the board of
					the recommended components and replaces
	directors and the executive board, which includes
					the former Remuneration Guidelines (which
	• a detailed description of the components of the
					also covered the recommended elements). The
	remuneration for members of the board of directors					Remuneration Policy was approved by the
	and the executive board,					General Meeting in March 2020 and is available
	• the reasons for choosing the individual components of					on the Carlsberg. website
	the remuneration,
					24

Recommendation	The	The	The	The explanation for complying
	company	company	company	partially/not complying with the
	complies	complies	does not	recommendation
		partially	comply

• a description of the criteria that form the basis for the balance between the individual components of the remuneration, and
• an explanation for the correlation between the remuneration policy and the company's long-term value creation and relevant related goals.

The remuneration policy should be approved by the
general meeting at least every fourth year and upon any
material amendments and it should be published on the
company's website.
4.1.2. The Committee recommends that if the	X	The remuneration policy and incentive
	programme fulfill the recommendations.
remuneration policy includes variable components,

• limits be set on the variable components of the total remuneration package,
• a reasonable and balanced composition be ensured between remuneration for members of management and the value creation for shareholders in the long term,
• clarity be established about performance criteria and measurability for the award of variable components,
• it is ensured that variable remuneration not only consists of short-term remuneration components, and that long-term remuneration components must have a vesting or maturity period of at least three years, and
• it be ensured that the company has the ability to reclaim, in full or in part, variable components of remuneration that were paid on the basis of

25

	Recommendation	The	The	The	The explanation for complying
		company	company	company	partially/not complying with the
		complies	complies	does not	recommendation
			partially	comply
	information, which subsequently are found to be
	incorrect.
	4.1.3. The Committee recommends that remuneration of	X			The Supervisory Board members do not
	members of the board of directors does not include share				participate in share option, bonus or warrant
	options or warrants.				programs.
	4.1.4. The Committee recommends that if, in relation to	X			The Executive Board is subject to share-based
	long-term incentive programmes, a share-based				remuneration. The conditions of the existing
	remuneration is used, the programmes should have a				share option scheme comply with the
	vesting or maturity period of at least three years after				recommendation. Please refer to the detailed
	being allocated and should be roll-over programmes, i.e.				description in the Remuneration Report 2020.
	the options should be granted periodically.
	4.1.5. The Committee recommends that the total value	X			Carlsberg complies with this recommendation.
	of the remuneration relating to the notice period, including
	severance pay, do not exceed two years of remuneration,
	including all components of the remuneration.
	4.2. Disclosure of remuneration
	4.2.1. The Committee recommends that the company's	X			The chairman's report at the Annual General
	remuneration policy and compliance with this policy be				Meeting in March 2020 included an explanation
	explained and justified annually in the chairman's				of the remuneration policy and compliance with
	statement at the company's general meeting.				this policy.
		X			The Annual General Meeting is each year asked
	4.2.2. The Committee recommends that shareholders at				to approve the proposed remuneration for the
	the general meeting consider proposals for approval of				Supervisory Board for the year to come. Latest,
					the Annual General Meeting in March 2020 was
					26

	Recommendation	The	The	The		The explanation for complying
		company	company	company		partially/not complying with the
		complies	complies	does not		recommendation
			partially	comply
	remuneration for the board of directors for the current					asked to approve the 2020 remuneration and
	financial year.					similarly, the Annual General Meeting will be
						asked to approve the remuneration for 2021 in
						March 2021.
	4.2.3. The Committee recommends that the company	X				Carlsberg's 2020 Remuneration Report provides
	prepares a remuneration report that includes information					information on the Group's remuneration
	on the total remuneration received by each member of the					schemes, the remuneration components and
	board of directors and the executive board from the					the remuneration granted to each member of
	company and other companies in the group and associated					the Supervisory Board and the Executive
	companies for the last three years, including information					Board.
	on the most important content of retention and
	resignation arrangements and that the correlation					Carlsberg discloses the most important aspects
	between the remuneration and company strategy and					of retention and severance programs in its
	relevant related goals be explained.					Annual Report.
	The remuneration report should be published on the
	company's website.
	5. Financial reporting, risk management and audits
	5.1. Identification of risks and transparency about other relevant information
		X				The management commentary in the Annual
	5.1.1. The Committee recommends that the board of					Report 2020 includes a detailed description of
					Carlsberg's risk management.
directors consider and in the management commentary
account for the most important strategic and business-					The Supervisory Board reviews the overall risk
related risks, risks in connection with the financial
reporting as well as for the company's risk management.					exposure and the individual risk factors
						associated with the Carlsberg Group's
						activities. Such reviews are conducted as
					27

	Recommendation	The	The	The	The explanation for complying
		company	company	company	partially/not complying with the
		complies	complies	does not	recommendation
			partially	comply
					required and at least once a year. On behalf of
					the Supervisory Board, the Audit Committee
					monitors the overall strategic risk exposure
					and the individual risk factors associated with
					the Group's activities. Monitoring is mainly
					performed in connection with the reporting
					process.
					The Supervisory Board (through the Audit
					Committee) adopts guidelines for the key
					areas of risk, monitors the development and
					observes that plans are in place for the
					management of individual risk factors,
					including commercial and financial risks. For a
					more detailed description of the review of the
					overall risk exposure associated with the
					Group's activities and the current high-risk
					issues identified, please refer to the risk
					management section of the Annual Report.
	5.2. Whistleblower scheme
	5.2.1. The Committee recommends that the board of	X			A whistleblowing scheme has been in place in
				Carlsberg since 2010. The Audit Committee is
directors establish a whistleblower scheme for expedient				provided with quarterly reports on matters
and confidential notification of serious wrongdoing or				reported in the whistleblower scheme and on
suspicions thereof.				action taken as a result of such matters
					reported.
					28

Recommendation	The	The	The	The explanation for complying
	company	company	company	partially/not complying with the
	complies	complies	does not	recommendation
		partially	comply

5.3. Contact to auditor

	X			The Supervisory Board maintains a regular
				dialogue and exchange of information with the
				auditor. The auditors participate in all Audit
				Committee meetings and in the Supervisory
				Board meeting at which the annual statement
				is discussed and approved. The auditors' report
5.3.1. The Committee recommends that the board of				any significant findings regarding accounting
directors ensure regular dialogue and exchange of				matters and any significant internal control
information between the auditor elected by the general				deficiencies to the Supervisory Board through
meeting and the board of directors, including that the				the Audit Committee and through its written
board of directors and the audit committee meet with the				long-form audit reports to the Supervisory
auditor elected by the general meeting at least once				Board which are issued at least twice a year. All
annually without the executive board present. This also				Supervisory Board and Audit Committee
applies to the internal auditor, if any.				material is available to the auditors.
				The Supervisory Board (through the Audit
				Committee) meets regularly with the auditor
				without the Executive Board present. The Audit
				Committee regularly meets with the internal
				auditor without the Executive Board.
5.3.2. The Committee recommends that the audit	X			The Supervisory Board has approved the
agreement and auditor's fee be agreed by the board of				agreement with the auditor on the basis of a
directors and the auditor elected by the general meeting				recommendation from the Audit Committee on
based on a recommendation from the audit committee.				the agreement and the fees.

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