Farmer owned

Cooperative governance

Arla’s democratic structure gives decision-making authority to the Board of Directors and to the Board of Representatives. Their primary tasks are the development of the ownership base, safeguarding the cooperative democracy, embedding decisions and developing competencies. Good corporate governance represents responsible and transparent management and corporate control. And it’s essential for achieving success and enhances the confidence placed in Arla. Corporate governance in Arla is shared between the Executive Management Team and the Board of Directors. Together they define the company’s strategic direction and ensure adherence thereof, organize and manage the company, supervise management and ensure compliance

Owners
11,200 milk producers in Denmark, Sweden, the UK, Germany, Belgium, Luxembourg and the Netherlands are joint owners of Arla. As a cooperative, all cooperative owners have the opportunity to influence decisions. 

District councils
Each year, the cooperative owners convene for a local annual assembly in Denmark, Sweden, the UK and Central Europe (Germany, the Netherlands, Belgium and Luxembourg) to ensure democratic influence of the cooperative owners in the seven owner countries. The members in the district council elect members to represent their district on the Board of Representatives.

Board of Representatives
The Board of Representatives is the supreme body comprising 187 members of whom 175 are cooperative owners, while 12 are Arla employees. Cooperative owners are elected every other year in odd years. The Board of Representatives makes decisions including appropriation of profit for the year and elects the Board of Directors. The Board of Representatives meets at least twice a year.

Board of Directors
Appointed by the Board of Representatives, the Board of Directors is responsible for decisions relating to longterm strategies, major investments, as well as mergers and acquisitions. The Board of Directors consists of 15 elected Arla farmer owners and three employee representatives. The composition of the Board of Directors reflects Arla’s ownership. The Board of Directors is responsible for monitoring the company’s activities and asset management, maintaining the accounts satisfactorily and appointing the Executive Board. The Board of Directors is also responsible for ensuring that Arla is managed in the best interest of the farmer owners and making decisions concerning the ownership structure.

Area Councils
Arla has four Area Councils that are subcommittees of the Board of Directors and consists of members of the Board of Directors, as well as members of the Board of Representatives. The Area Councils are established in the four democratic areas: Sweden, Denmark, Central Europe and the UK, to take care of the matters that are of special interest to the farmer owners in each geographic area.

Executive Board
The Executive Board, appointed by the Board of Directors, is responsible for managing the company, ensuring the proper longterm growth of the company from a global perspective, driving the strategic direction, following up on targets for the year and defining company policies, while striving for a sustainable increase in company value. Furthermore, the Executive Board ensures appropriate risk management and risk controlling, as well as compliance with statutory regulations and internal guidelines. This is where the Group’s ambitions are defined for cross-disciplinary efforts. 

Executive Management Team
The Executive Management Team is responsible for Arla’s day-to-day business operations, preparing strategies and planning the future operating structure. The Executive Management Team consists of the Executive Board plus three functional experts and two commercial leaders: Europe and International. In addition to their overall responsibility, the members of the Executive Management Team are individually responsible for managing their respective business areas. The members of the Executive Management Team keep each other informed about significant developments in their business area and align on all cross-functional measures. 

Functional experts and commercial leaders
The leadership teams within the functional areas and commercial zones are Arla’s other executive bodies and focus on ensuring that Arla is result-oriented across organizational units, while also defining policies and sharing and implementing best practices.

Employees
Arla has approximately 19,000 employees globally. The employees are represented by three members in the Board of Directors and 12 members in the Board of Representatives.

Read also Arla Foods Articles of Association

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