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"Report and Accounts 2000"

Organisation and Tasks of the Nationalbank

The announcement of the referendum on Denmark's adoption of the euro had a significant impact on the work of most departments of Danmarks Nationalbank. Prior to the referendum an internal EMU contingency plan was prepared. It identified a number of projects, especially relating to IT, to be implemented should the result of the referendum be in favour of Denmark's adoption of the euro.

In 2000, the Joint Consultation Committee adopted a personnel policy drawn up by a committee comprising managerial and staff representatives.

At the close of 2000 the Nationalbank had 605 employees, equivalent to 552 full-time positions.

The Nationalbank's objectives and values

The Nationalbank has a number of objectives and values, which are the guidelines for its day-to-day activities. Both the objectives and the values have been drawn up in close cooperation between management and employees, and they form the basis for the individual departments' work on objectives and action plans.

Objectives
The overall objectives of the Nationalbank as an independent and credible institution are:

• To ensure a stable krone.
• To ensure efficient and secure production and distribution of banknotes and coins of high quality.
• To contribute to efficiency and stability in payment and clearing systems and in the financial markets.
• To act as banker to the central government.
• To prepare reliable and relevant financial statistics.
• To prepare and communicate credible standpoints on economic and financial issues with relation to the Nationalbank's objectives.
• To maintain its financial strength by means of consolidation and risk management.

Values

• While safeguarding its traditions, the Nationalbank shall actively renew itself and adapt to trends in society and to the requirements of the surrounding world. The Nationalbank shall protect its credibility by not only displaying professional competence, managerial skills, and sound judgement, but also by maintaining an organisation which lives up to the principles the Nationalbank considers to be significant to society's development: efficiency, cost awareness and readiness for change. Focusing on its primary tasks, on an ongoing basis the Nationalbank shall set priorities for its work.
• The Nationalbank shall be an attractive workplace capable of attracting, motivating and retaining well-qualified employees and offering them working conditions which ensure balance between work and leisure. Key qualities are initiative, commitment, adaptability and a willingness and ability to cooperate across professional barriers, and with other areas of the organisation. All employees must have the necessary training and/or education to handle their tasks. It is a joint responsibility to ensure that everyone is trained and developed in preparation for new tasks.
• The Nationalbank shall be service-oriented in terms of both the external relations of line functions, and the internal relations of staff functions with the rest of the bank. Teamwork and project work within each unit and between departments is encouraged. In cooperation with the employees, managers shall set priorities for tasks, define targets and ensure the necessary responsibility sharing and communication, thereby limiting the need for detailed supervision. This gives employees the widest possible scope to define their own working methods, solve tasks and take decisions themselves to the greatest extent possible.
• The Nationalbank's relations with the financial sector are based on market-oriented solutions, and the costs to the sector and the Nationalbank must be weighed against the value of the system or requirement to society. The underlying principle for systems and requirements relating to the credit institutions shall be equal treatment irrespective of size, geographical location and national affiliation.
• In relations with public authorities and players in the financial system, and in international cooperation, the Nationalbank shall seek influence and express attitudes which are in line with the Nationalbank's objectives. In relations with the public the Nationalbank shall, via the media and otherwise, ensure an understanding of the decisions relating to the Nationalbank's own tasks. With regard to financial conditions or economic policy in general, the Nationalbank shall comment on these issues if they are of material importance to its implementation of monetary and foreign-exchange policy, or to the efficiency and stability of the financial markets.

Personnel policy
In 2000 the Joint Consultation Committee adopted a personnel policy drawn up by a committee comprising managerial and staff representatives. The personnel policy comprises a set of values which expand on and supplement the Nationalbank's standpoints. The personnel policy covers all employees, who are all expected to live up to and act in accordance with the policy. Managers hold staff responsibilities and are thus subject to a special obligation to implement the personnel policy.

The Nationalbank's management

The Royal Bank Commissioner
The Royal Bank Commissioner is the formal link between the Government and the Nationalbank. The Minister for Economic Affairs and for Nordic Cooperation Ms. Marianne Jelved is the Royal Bank Commissioner.

Board of Directors
The Board of Directors has 25 members, of whom 8 are elected by the Folketing (Parliament) from among its members, and 2 are appointed by the Minister for Economic Affairs. The other 15 members, who must have in-depth knowledge of business conditions, are elected by the Board of Directors and should represent different geographical areas and professions, including wage-earners. Meetings are normally held once in each quarter. The Board of Directors has organisational tasks and must approve the annual accounts. The Board of Directors of Danmarks Nationalbank as of 1 March 2001 is shown in Box 10.

Box 10 The board of directors of Danmarks Nationalbank, 1 march 2001

The Committee of Directors
The Committee of Directors has 7 members. The two members of the Board of Directors appointed by the Minister for Economic Affairs are permanent members. On the election of the other 5 members of the Committee of Directors, it is customary for the Board of Directors to elect two MPs representing the government and the opposition parties, respectively. The Committee of Directors usually meets 10 times a year. The Committee of Directors of Danmarks Nationalbank as of 1 March 2001 is shown in Box 11.

Box 11 The committee of directors of Danmarks Nationalbank, 1 March 2001

Board of Governors
The Board of Governors has 3 members. The governors are charged with the day-to-day management of the Nationalbank and are responsible for the formulation and ongoing adjustment of monetary policy. As Governor by Royal Appointment Ms. Bodil Nyboe Andersen is Chairman of the Board of Governors. The two other members, who are appointed by the Board of Directors on the recommendation of the Committee of Directors, are Mr. Torben Nielsen and Mr. Jens Thomsen.

Auditors
The appointed external auditors of the Nationalbank are State-Authorised Public Accountant Mr. Bjarne Fabienke and State-Authorised Public Accountant Mr. Svend Ørjan Jensen.

Departments

The Nationalbank has 16 departments, cf. the organisation chart on p. 107. The tasks of the individual departments are as follow:

• Accounting manages and monitors the accounts of customers (credit institutions, the central government, central banks, etc.) and the settlement of payments in the financial sector. It undertakes the Nationalbank's payroll administration and prepares its budgets and accounts. It also undertakes settlement and bookkeeping of transactions concerning the Nationalbank's foreign-exchange and bond portfolios, and the central-government debt.
• Audit undertakes the audit of the Nationalbank's accounts, including the Nationalbank's Pension Fund and various foundations, in cooperation with the appointed external auditors. It also audits the Guarantee Fund for Depositors and Investors, the Social Pension Fund and the government debt management in cooperation with the Auditor General.
• Banking Services supplies banknotes to Denmark, the Faroe Islands and Greenland. This takes place via cash depots established by agreement with banks. Worn banknotes are returned to Banking Services for control of authenticity and destruction.
• The Banknote Printing Works manufactures Danish and Faroese banknotes, and is thus responsible for the design of the banknotes, the production of printing plates and ink, and the actual printing of the banknotes, as well as quality control, cutting out and packaging. The Banknote Printing Works also participates in international cooperation on improving the security of banknotes.
• Economics assesses economic development in Denmark and in the industrialised countries, with special focus on monetary and foreign-exchange policy issues. The economic model MONA has been developed by the bank for analysis of domestic cyclical trends. Economics edits the Nationalbank's quarterly Monetary Review.
• Facility Services is responsible for the administration and maintenance of the Nationalbank's properties and for messengers, postal services, watchmen, cleaning and canteen services, etc.
• Financial Markets is responsible for evaluation and management of the Nationalbank's positions and the related market analyses. The department prepares outline strategies for the government debt management and analyses trends on the financial markets and in the Danish financial sector. It also assists in the preparation of legislation in these areas. Financial Markets publishes Government Borrowing and Debt and an annual analysis of Financial Stability in the quarterly Monetary Review.
• International Relations is responsible for relations with international economic organisations, including the European Central Bank within the European System of Central Banks, and the International Monetary Fund.
• IT is responsible for the bank's IT strategy and for purchasing, installing, operating and maintaining the Nationalbank's local area networks and PC workstations. It is also responsible for the Nationalbank's program development, and participates in the IT development projects of the other departments of the bank, is co-responsible for IT supplier relations and undertakes administration of users of the Nationalbank's local area networks and financial systems.
• Market Operations undertakes the day-to-day administration of the Nationalbank's foreign-exchange policy and monetary and liquidity policy, including intervention in the foreign-exchange and money markets. It is responsible for the administration of the Nationalbank's bond portfolio and foreign-exchange reserve. On behalf of the Ministry of Finance it undertakes domestic and foreign borrowing for the central government.
• Payment Systems handles policy issues relating to payment systems. It cooperates with owners and operators of the Danish retail payment and settlement systems and develops and maintains the Nationalbank's real-time gross settlement systems for large krone- and euro-denominated payments.
• Personnel and Organisation is responsible for personnel policy and staff development, collective agreements and other contracts, as well as personnel administration. The department also has general organisational duties such as administration of internal training.
• The Royal Mint manufactures Danish coins and supplies banks in Denmark, the Faroe Islands and Greenland with coins. In addition to ordinary coins in circulation, commemorative coins, coin sets and medals are also manufactured.
• The Secretariat undertakes general secretariat functions for the Board of Governors, the Committee of Directors and the Board of Directors and is responsible for external and internal communication, including relations with the press, and the Nationalbank's Web site, intranet and library. The Information Desk responds to general external enquiries. The Secretariat also comprises the Nationalbank's central archives. Legal Affairs handles general legal issues, including EU law. The Secretariat edits Danmarks Nationalbank's Report and Accounts.
• Security is responsible for the bank's security, including IT security.
• Statistics prepares statistics for the financial sector, registers and analyses payments to and from abroad for use in the compilation of the balance of payments, and compiles Denmark's foreign debt and direct investments. Statistics edits and publishes the Nyt series and other regular statistical publications.

Organisation Chart 1 March 2001

*)	Viggo Sørensen, Head of Division, is also Head of the Secretariat for The Guarantee Fund for Depositors and investors.

Staff

Number, staff groups, seniority, age, etc.
At the close of 2000 the Nationalbank had 605 employees, equivalent to 552 full-time positions.

The bank has fairly equal numbers of academic staff, bank staff and IT/clerical staff, while craftsmen/technicians and service staff each account for a slightly smaller share, cf. Chart 37. During the past few years the proportion of academic staff, bank staff and IT/clerical staff has increased, reflecting an increase in the number of analytical tasks, the expansion of the financial statistics, and greater international cooperation. On the other hand, the craftsmen/technicians and service staff groups have diminished as a result of rationalisation measures, cf. Table 9.

Chart 37 Staff groups

Tabel 9 Staff groups

Number of employees	1997	1998	1999	2000
Academic staff/bank staff/clerical staff	333	341	357	373
Craftsmen/technicians/service staff	249	228	202	179
Total	582	569	559	552

Note:

Number of employees converted to full-time positions.

In 2000, 53 new employees were taken on, and 65 left the Nationalbank, 16 of whom took their retirement. This is equivalent to a staff turnover rate of 11 per cent.

The bank has a large number of staff with low seniority, cf. Chart 38. This inter alia reflects that many new staff members with an academic background have been recruited in recent years. In addition, the bank also employs more student assistants than previously. The high number of staff with more than 20 years' seniority shows that employment by the Nationalbank is often "for life".

Chart 38 Seniority

46 per cent of the staff are women and 54 per cent men, cf. Chart 39. The proportion of women in managerial positions^[1] is 14 per cent.

Chart 39 Distribution by age and gender

Staff development
It is in the joint interests, and the joint responsibility, of the management and staff that all employees develop their personal and professional skills on an ongoing basis. This is achieved through competence-enhancing, stimulating tasks, as well as supplementary training. Another key element is compulsory employee appraisal interviews.

Academic staff and bank and clerical staff are subject to an internal job rotation scheme. It entails that ideally they should move on to new areas of work once or twice within the first 5 years of employment. This is planned in cooperation with the employee concerned. Employees who have served the bank longer may also rotate to a new position.

Employee development may also be shorter or longer periods of secondment to international financial institutions. At the close of 2000, 15 employees were on leave in connection with secondment.

Expenditure on courses and supplementary training has increased in recent years. In 2000, kr. 8.8 million was spent on education and training, equivalent to 4.2 per cent of the total payroll costs. The average number of training days was 4 per employee.

The breakdown of course expenditure is 42 per cent for professional courses, 24 per cent for personal development courses, 9 per cent for IT courses, and the rest for other courses and internal seminars. In 2000 the bank established an internal instructor team to hold both professional courses and courses in personal development.

Average training costs were approximately kr. 15,000 per employee in 2000. Employees with higher or intermediate educational qualifications account for the largest proportion of expenditure on courses, while course expenditure for employees with other educational backgrounds was considerably lower, cf. Chart 40. The high average expenditure in the first- mentioned group relates to managerial training and professional courses, some of which took place abroad. However, the bank's greater use of the project model, cf. p. 113, has resulted in higher expenditure on project manager training for employees with higher or intermediate educational qualifications. Since lifelong skills development within and outside the bank is part of the bank's personnel policy, the training of employees with lower educational qualifications will continue to receive priority.

Chart 40 Average course expenditure per employee

Annual appraisal interviews are held with each employee by his/her superior in order to discuss the work situation of the employee. This system comprises all employees and was reviewed in 1999, and now includes setting goals for each employee in order to achieve a balance between the expectations of each employee and the skills and expertise required for the job.

For employees covered by the job rotation scheme, planning interviews are also held, starting after approximately 2 years' employment. Participants are the employee and his/her superior, but also a representative from Personnel and Organisation. The purpose of the interview is to hear and assess the wishes, expectations and opportunities of each employee, in order to plan his/her professional and personal development in as much detail as possible.

Absence due to illness
In 2000 absence due to illness was an average of 8.1 days per employee. More attention has been paid to absence due to illness, e.g. via interviews with employees who are absent on grounds of illness for many days of the year.

Salary and employment conditions
All employees of the Nationalbank – except those employed by the Banknote Printing Works – are subject to a collective agreement between the Nationalbank and the Nationalbank's Staff Association. The agreement is based on the terms and conditions applying to the financial sector. The agreement is subject to renegotiation in 2001.

In 2000 the collective agreement for employees of the Banknote Printing Works was renegotiated, and a 4-year agreement was signed with the Industry sector of the Union of Commercial and Clerical Employees in Denmark (HK).

Information technology

The Nationalbank regards information technology as a fundamental prerequisite for the high-quality, efficient and secure performance of the bank's business functions. The bank's IT strategy lays down the overall rules for the use of IT within the Nationalbank. In addition, the IT strategy determines future areas of IT application. In 2001 these include enhancement and modernisation of the bank's local area network, ongoing improvement of the helpdesk and support for internal users, and strengthening of IT project work within the Nationalbank.

The high IT security requirements to which the Nationalbank is subject will continue to be expanded in accordance with the guidelines laid down by Security.

Organisation
IT functions within the Nationalbank are split into two areas. The local area network is operated by Information Technology, which employs almost 30 people. A number of business-critical systems are developed in cooperation with, and operated by, Bankernes Edb Central, BEC. In addition, the Nationalbank, like the other non-euro-area EU central banks, exchanges various data with the ECB in Frankfurt.

During 2000 the Nationalbank carried out the reorganisation of Information Technology in order to ensure optimum service to users.

Information Technology is currently upgrading and modernising the local area network by laying new IT cables, establishing new server rooms and a server complex, and upgrading the bank's PCs to the latest versions of operating and office systems.

Systems development and choice of solutions
In future the Nationalbank will seek to use standard systems and technologies, rather than customised solutions, when this is professionally and technically justifiable.

In the areas where the Nationalbank uses and will use standard systems and technologies, these should be as close as possible to the current market standard within the area. The objective is to achieve a homogeneous complex of systems which is independent of particular individuals and suppliers.

Projects and the project organisation
The Nationalbank will conclude a number of large IT projects related to payment systems and statistics in 2001, cf. pp. 79f and 95.

In recent years the Nationalbank has focused on the organisation of IT projects. The aim is to ensure that the overall priorities correspond to the business priorities, and that projects take place within the framework laid down.

An overall body to allocate priority to the Nationalbank's IT projects and handle general IT issues has been set up. A practical and feasible IT project model and related IT project reporting has been defined. This is to significantly reduce the risk of stranded IT projects. The responsibility for completion of IT projects has been moved from Information Technology to the various business areas, in order to ensure better fulfilment of business requirements.

Special tasks in 2000

Euro
The referendum on Denmark's adoption of the single currency, the euro, which was called in March 2000, had a significant impact on the work of most departments of the Nationalbank. Had Denmark decided to adopt the euro, the Nationalbank would have been required to undertake extensive restructuring measures within a very short period.

In 1999 the Nationalbank participated in the preparation of a changeover plan detailing Denmark's changeover to the euro in the event of Danish participation, cf. the 1999 Annual Report, p. 81.

In May 2000 the government presented a bill on Denmark's adoption of the single currency. The bill meant that in the event of a referendum result in favour of adoption of the euro Denmark would be able to join the euro area from 1 January 2002. Euro banknotes and coins would be introduced from 1 January 2004, after which krone-denominated banknotes and coins would be withdrawn from circulation. This would have given the Nationalbank just over one year to make the necessary changes prior to the introduction of the euro in Denmark, and a further two years to produce the required initial stock of euro banknotes and coins.

In view of the short time available for preparation after a referendum result in favour of adoption of the euro an internal EMU contingency plan was drawn up prior to the referendum. The plan identified the projects, especially in the IT area, that would be required. Some of these would have had to be carried out anyway – partly as a result of the ongoing work on international standards, and partly as an element of the general upgrading of the IT systems, but the timing of these projects was critically dependent on the outcome of the referendum. After the referendum outcome not to adopt the euro on 28 September 2000 these projects therefore continued, but the time schedules were revised, and in some cases also the structure of the projects. However, the majority of the projects under the EMU contingency plan were shelved.

As part of these preparations the Nationalbank also presented a preliminary design of Danish euro coins, cf. p. 74.

The referendum is presented in detail on p. 82.

Representation on committees, etc.

As of 1 March 2001 the Nationalbank is represented on the following committees, etc.:

Financing institutes

• Danish Ship Finance
  Former Governor Ole Thomasen is a member of the Board of Directors and the Board of Representatives. Mr. Max Bæhring and Professor Michael Møller are members of the Board of Representatives.
• GrønlandsBANKEN A/S
  Former Governor Ole Thomasen is elected to the Board of Directors.
• The Nordic Investment Bank
  Hans Denkov, Head of Market Operations, is an alternate member of the Board of Directors.

Securities market institutions

• The Securities Market Council
  Governor Jens Thomsen. Ove Sten Jensen, Head of Division, is an alternate member.
• VP A/S - The Danish Securities Centre
  Governor Torben Nielsen is Vice Chairman of the Board of Directors.

Other institutions

• Managing Committee for the Social Pension Fund
  Hans Denkov, Head of Market Operations.
• The Economic Council
  Governor Jens Thomsen.

Representation in international organisations

As a element of the international foreign-exchange and monetary-policy cooperation Danmarks Nationalbank participates in a number of committees, sub-committees and working groups, of which the most significant are:

The European Union, EU

• The Economic and Financial Committee
  Governor Jens Thomsen (with Michael Dithmer, Permanent Secretary, Ministry of Economic Affairs).
  Niels Bartholdy, Head of Division, is an alternate member of the Committee (with Henrik Fugmann, Deputy Secretary, Ministry of Economic Affairs).
• The Economic Policy Committee
  Hugo Frey Jensen, Head of Division, (with Per Bremer Rasmussen, Deputy Secretary, and Thomas Alslev Christensen, Director, Ministry of Economic Affairs, and Per Callesen, Deputy Secretary, Ministry of Finance).
• The Banking Advisory Committee
  Benny Andersen, Head of Financial Markets (with Torben Garne, Director, Ministry of Economic Affairs, and Henrik Bjerre-Nielsen, Director General, Financial Supervisory Authority).
• The Working Group of Mint Directors
  Laust Grove, General Manager, the Royal Mint, and Thomas Enevoldsen, Head of Section.

The European Central Bank, ECB

• The General Council
  Governor Bodil Nyboe Andersen.

The Nationalbank participates partly in the following ECB committees:

• Accounting Committee
  Henrik Larsen, Director, Chief Accountant, and Lisbeth Sundin, Assistant Head of Division.
• Banking Supervision Committee
  Benny Andersen, Head of Financial Markets (with Henrik Bjerre-Nielsen, Director General, Financial Supervisory Authority).
• Banknote Committee
  Hans Kloch, Director, General Manager, and Tage Heering, Head of Division.
• External Communications Committee
  Bjarne Skafte, Head of Secretariat, and Winnie Jakobsen, Assistant Head of Division.
• Information Technology Committee
  Søren Lundsby Hansen, Head of Information Technology, and Kristian Kjeldsen, Assistant Head of Division.
• Internal Auditors Committee
  Peter Jochimsen, Chief Auditor, and Stephan Green Löwe, Head of Section.
• International Relations Committee
  Governor Jens Thomsen and Kai Aaen Hansen, Director, Head of International Relations.
• Legal Committee
  Kirsten Rohde Jensen, Head of Division.
• Market Operations Committee
  Frank Nielsen, Head of Division.
• Monetary Policy Committee
  Hugo Frey Jensen, Head of Division.
• Payment Systems Committee
  Karsten Biltoft, Head of Payment Systems, and Allan Damm Christensen, Adviser.
• Statistics Committee
  Jørgen Ovi, Assistant Governor, Head of Statistics.

The International Monetary Fund, IMF

• Board of Governors
  Governor Bodil Nyboe Andersen is the Danish member. (Michael Dithmer, Permanent Secretary, Ministry of Economic Affairs, is an alternate member).
• The Nordic/Baltic Monetary and Financial Committee
  Governor Jens Thomsen (with Michael Dithmer, Permanent Secretary, Ministry of Economic Affairs) and Kai Aaen Hansen, Director, Head of International Relations, who is Chairman of the Group of Alternate Members.
  Senior Adviser Ole Hollensen is a member of the Group of Alternate Members (with Henrik Fugmann, Deputy Secretary, Ministry of Economic Affairs).

Organisation for Economic Cooperation and Development, OECD

• The Economic Policy Committee
  Governor Jens Thomsen (with Michael Dithmer, Permanent Secretary, Ministry of Economic Affairs, and Anders Eldrup, Permanent Secretary, Ministry of Finance).

Danmarks Nationalbank's anniversary foundation of 1968

In 2000 the Foundation's honorary grant was awarded to Mr. Austin Grandjean, graphic designer, who received kr. 100,000. The honorary grant was presented at the Danish Museum of Decorative Art in Copenhagen in connection with the opening of "Syn for sagn" – an exhibition of Austin Grandjean's typography and other expressions of graphic design.

The purpose of the Anniversary Foundation is to extend financial support for the promotion and development of the artistic design and presentation of Danish products and to support other artistic areas, mainly decorative art, architecture and design, but also music and dance. In 2000 total grants amounted to kr. 4.8 million. Of 1,297 applications, 156 were granted. In addition 8 grants without prior application were made.

On 1 March 2001 the Board of the Foundation comprised Governor Bodil Nyboe Andersen (Chairman), Professor Hans E. Zeuthen (Deputy Chairman), Director Bodil Busk Laursen, Attorney-at-law Per Magid, Art historian Bente Scavenius and Arcitect, industrial designer Teit Weylandt. Ms. Bente Scavenius retires on 31 March 2001 and is replaced by Ceramist Karen Bennicke.

The Nationalbank's guest apartments at Nyhavn 18

The Nationalbank has seven guest apartments at Nyhavn 18 which are made available to foreign scientists and artists. Residence in the guest apartments is free and granted from three months up to one year. In 2000 the guest apartments at Nyhavn 18 were allocated to 13 visitors.

The committee formed to advise on the allocation of the apartments consists of Professor Ole Feldbæk (Chairman), Dr. Else Marie Bukdahl and Professor Søren-Peter Fuchs Olesen.

The Erik Hoffmeyer travel grant foundation

In 2000 the Erik Hoffmeyer Travel Grant Foundation awarded grants to the pianist Nikolaj Koppel and the goldsmith Quan Duc Tien. They each received a grant of kr. 40,000 for further studies abroad.

The Erik Hoffmeyer Travel Grant Foundation was established by the Board of Directors of the Nationalbank in 1995 as a tribute to Mr. Erik Hoffmeyer for 30 years' outstanding service as Chairman of the Nationalbank's Board of Governors. The establishment and objective of the Foundation are described in the 1995 Annual Report.

The Board of the Travel Grant Foundation comprises Professor Hans E. Zeuthen (Chairman), Former Governor Erik Hoffmeyer and Former Chief Rabbi Bent Melchior.

Footnotes

[1] Defined as at least Assistant Head of Division.

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Version 1.0 March 2001 Nationalbanken.
Published by Danmarks Nationalbank March 2001, http://www.nationalbanken.dk