Environment | Social | Governance
Download ESG Report 2021

Governance

Material Issues
  • Corporate Governance
  • Risk Assessment
  • Anti-corruption
  • Audits, Inspections & Surveys

A Strong Corporate Culture

Danaos abides by the:

  • Corporate Governance Guidelines
  • Code of Business Conduct and Ethics
  • Code of Conduct & Ethics for Corporate Officers & Directors
  • Ethics and Compliance Policy
  • Anti-Fraud Policy
  • Insider Trading Policy
  • Anti-Bribery & Anti-Corruption Policy
  • Anti-Money Laundering Policy

We believe that effective Corporate Governance is at the heart of the successful running of our company, not only because it improves the Company’s overall performance, but also because it promotes trust among our stakeholders. Since the Company’s establishment, we have a long-standing commitment to govern and conduct our business with integrity, honesty, fair dealing and full compliance with all laws and regulations in place. Among our first priorities is to set up a robust governance structure by which our company is directed and controlled and at the same time it is essential for achieving positive outcomes in all aspects of our operations, especially as it relates to sustainability. The responsibilities of our Board include setting the Company’s strategic objectives, providing the leadership to put them into effect, supervising our Management and reporting to shareholders on their oversight.

In 2021, our Board of Directors was comprised of seven* members the majority of which were independent Directors, while the two non-independent were our Chairman, President and Chief Executive Officer (CEO), and our Senior Vice President, Treasurer and Chief Operating Officer (COO). Each Director is selected with a view to having a Board representing diverse experience in areas that are relevant to the Company’s business activities. The Board has three Committees, each of which is chaired by an independent non-executive Director and has a Charter setting out its responsibilities. The Board and each of the Committees performs an annual self-evaluation, in order for the Company to adhere to the highest standards of good corporate governance and enhance the Board’s and its Committees overall effectiveness. The Directors are requested to provide their individual assessments, which are then summarized for discussion with the Board and the Committees, leading to continuous improvement.
* As of January 2022 our Board of Directors is comprised of six members.

Danaos Corporation in 2021 employed four Officers, the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer and the Deputy Chief Operating Officer. Danaos Shipping, being the exclusive manager of Danaos Corporation, has built a strong reputation in the shipping community by providing customized, high-quality operational services in an efficient manner for both new and older vessels. The following organization chart describes our structure:

For more information on Corporate Governance, click here

High Ethical Principles

The purpose of the Code of Business Conduct & Ethics and Policies is to:
  • Raise employee awareness on areas concerning ethical risk
  • Provide guidance to help employees recognize and deal with ethical issues, especially in preventing bribery and corruption
  • Provide mechanisms for employees to report unethical conduct
  • Foster among them a culture of honesty and accountability

0

Bribery, fraud, and corruption incidents

$0

Monetary losses due to legal proceedings associated with bribery or corruption

0.15%

of port calls in countries with the 20 lowest rankings in CPI*

*Transparency International’s Corruption Perception Index

Based on the Company’s dynamic organizational chart and detailed job descriptions, specific roles are established for each employee. The employees, being devoted to the implementation of our Code of Business Conduct & Ethics and Policies, which have been developed encompassing the ten principles of the United Nations Global Compact about Labor, Environment, Anti-Corruption and Human Rights. The purpose of these Code of Business Conduct & Ethics and Policies is to uphold the reputation and integrity of the Company that are valuable assets and vital to our success. Each employee of the Company is responsible for conducting the Company’s business in a manner that demonstrates a commitment to the highest standards of integrity. Though, no Code can replace the thoughtful behavior of an ethical employee.

It is beyond question that our employees are expected to avoid conflicts of interest in their personal and business activities, in any number of circumstances. A conflict of interest occurs when an employee’s or an employee’s immediate family’s personal interest interferes with, has the potential to interfere with, or appears to interfere with the interests or business of the Company. Should an actual or perceived conflict of interest arise, an employee must promptly identify and disclose.

Since a conflict of interest can occur in a variety of situations, employees must keep the foregoing general principle in mind in evaluating both their conduct and that of others. Only the Board of Directors, upon receiving an adequate justification, may approve any waiver of any ethics policy for any director, executive officer, or employee.

The shipping industry is inherently vulnerable to corruption due to its international nature and interactions with authorities at various levels in ports around the world. Undoubtedly, we must conform with our Anti-Bribery & Anti- Corruption (ABAC) Policy by asking our directors, officers, employees, agents, brokers, vendors, partners, managers, consultants, contractors, joint venture partners, and all other representatives to act with integrity in all their business dealings – i.e., to do the right thing for the right reason. The purpose of ABAC Policy is to memorialize the Company’s commitment to adhere in the conduct of our business activities worldwide to both the letter and spirit of any anti-bribery legislation, and anti-corruption, anti-fraud, and anti-money laundering laws of countries and regions where the Company operates. As corruption can take place everywhere, it is significant to mention that only 0.15% of our port calls in 2021 were in countries in the 20 lowest rankings of Transparency International’s Corruption Perception Index (CPI).

Responsibility
Reliability
Principle
Morality
Behavior
Relationship
Trust

Compliance with environmental, safety, and socio-economic laws and regulations is of perpetual concern. Employees are educated with the content of the Code of Business Conduct & Ethics and Policies and the process on how violations must be reported, and waivers must be requested. All employees of the Company certify on an annual basis that they are in full compliance with the Code of Business Conduct & Ethics and any related policy statements. Having established standard operating procedures, we have created accountability and a culture of compliance throughout our organization which is necessary for the long-term development of the Company. We have also developed and implemented procedures for identifying, interpreting, and effectively communicating compliance issues to both our shore-based and onboard personnel. We provide a safe and anonymous system for anyone who wishes to report to the Company in good faith any violation. All our employees, vendors, agents, technicians, contractors, and partners are encouraged to report any violations of our Code of Business Conduct & Ethics and Policies and any other compliance issues directly and anonymously to us via our whistle-blowing link. Additionally, our employees may report any concerns regarding any violation without fear of dismissal or retaliation. However, we retain the right to dismiss any employee or crew member on board any of the vessels under our management for violation of our Code of Business Conduct & Ethics and Policies or any other applicable international rule and law.

A Robust Risk Management and Control Framework

There are several risks associated with the shipping industry. We prepare an enterprise-wide risk assessment to identify and prioritize the key risks confronting the Company and to determine how these risks can be managed. Risk assessment involves a dynamic and iterative process for identifying and assessing risks to the achievement of our business objectives. The business objectives allow our strategy to be put into practice and shape our day-to-day operations and priorities. We have developed four main business objectives: 1. Operations, 2. Reporting, 3. Compliance and 4. Sustainability – that are measurable, observable, attainable, and relevant.

BUSINESS OBJECTIVES
OPERATIONS
Profitability
Fulfill charterer requirements and profit-making opportunities
Control cost in operations while maintain the profit margin on services rendered
Maintain max fleet utilization
Growth
Grow the business and manage our expansion successfully
Maintain Financing
Maintain our ability to finance operations
Innovation & Technology
Ensure reliability and timeliness of reports and reflect adequately areas of responsibility and reporting lines
Quality & Performance Level
Ensure management structure is adequate and efficient
Evaluate competence and addresses shortcomings in outsourced service providers
Maintain and operate a modern fleet of high quality and high fleet utilization rates
Accountability & Integrity
Encourage and call for employees’ ownership & responsibility, pioneer mentality, transparency and honesty on its daily operational activities
Demonstrate professional reliability and trustworthiness
Consider fraudulent actions regarding assets misappropriation
Conduct the company’s business affairs in an ethical manner
Human Resources
Attract and retain qualified and competent personnel
Create secure employment and career development opportunities for our employees
Reward exceptional performance
OPERATIONS
Health, Safety and Stability
Ensure the health and safety of our personnel onboard and ashore
Manage vessels that are built with optimum safety, efficiency and environmental performance
REPORTING
Internal Financial / Non-Financial Reporting
Maintain and monitor a well-established internal controls system
Monitor the business performance adequately
External Financial Reporting
Prepare complete and accurate financial report on time
External Non-Financial Reporting
Present transactions and events with precision and accuracy
COMPLIANCE
Internal Control
Establish effective internal controls that limit the opportunity to commit fraud
Regulations & Governments
Comply with all applicable laws and regulations
SUSTAINABILITY
Environmental
Fight against climate change and conform to all industry environmental laws & regulations
Conduct vessel operations with a safe, efficient, and environmentally sustainable manner
Work devotedly on ship optimization for energy efficiency, emissions controlling and reduction towards decarbonization
Foster protection and sustainable use of water and marine environment, waste prevention and recycling, pollution prevention and maintenance of healthy ecosystems
Social
Support equality, social cohesion, and social integration
Respect labor relations via encouragement of open dialogue, work recognition and rewarding, and learning and development promotion
Set as strategic priority to create value for the society and to keep our employees engaged and involved through various voluntary initiatives
Governance
Embrace an effective Corporate Governance as a contributor to the improvement of our overall performance and to the promotion of trust among our stakeholders
Maintain a culture of honesty and opposition to fraud and corruption through adherence to entity’s policies and procedures

Risk assessment also requires that the Management considers the impact of possible changes in the external environment and within our own business model that may render internal controls ineffective. Management provides to the Board of Directors a detailed analysis of all the risks, which affect Company’s performance in various levels.

Our internal controls ensure robust risk management. For a strong internal control environment, we maintain two separate assurance functions.

Firstly, we have an independent Internal Audit Department, which reviews the Company’s processes and internal controls, providing appropriate recommendations and action plans. The Internal Audit department reports directly to the Audit Committee of the Board, provides recommendations, and monitors their implementation. Our Internal Audit department also assists the Management in achieving compliance with various laws and regulations, including the Sarbanes – Oxley requirements (SOX) regarding the internal control environment over financial reporting. During 2021, our Internal Audit team conducted several internal audits to assess and monitor the performance of the respective activities.

More specifically the number of internal audits (including SOX related audits) performed by our Internal Audit team in 2021 were 48, while they performed 2 ad-hoc reviews. Moreover, no material weaknesses or significant deficiencies were identified during our audits.

50

Internal Assurance audits

274

ICFR Controls tested

0

Material weaknesses or significant deficiencies identified in 2021 internal audits or external financial audits

Secondly, we have the Safety Quality and Environmental Department which reports directly to the Management, and its main focus is to maintain compliance with the relevant environmental and safety regulations, as well as the Danaos Safety Management System. Additionally, we have established standards and procedures to make sure that all vessels under our management comply with the maritime environmental requirements set up under applicable international, flag state and port state laws. Among others, this includes:

  • All United States’ federal and state statutes and regulations

  • The Safety of Life at Sea Convention (SOLAS)

  • The International Convention for the Prevention of Pollution from Ships (MARPOL)

  • The International Safety Management (ISM) Code

  • The International Ship and Port Facility Security (ISPS) Code

  • The Ballast Water Management Convention

  • Standards of Training, Certification, and Watchkeeping for Seafarers (STCW) Convention

  • The Maritime Labour Convention, 2006

  • International and nationally adopted low sulphur requirements

Our good records in PSC (port state control) examinations are an indication of a sound safety management system. Apart from the regulatory PSC inspections, our fleet is also subject to the annual safety inspections performed by our Flag States. All recorded deficiencies are immediately rectified, and preventive actions are taken to the satisfaction of the local Port State Control. The deficiencies are collectively analyzed and evaluated to avoid recurrence of similar deficiencies and the necessary corrective events are circulated for training purposes to the rest of our fleet. Timely corrective action is undertaken for both shore and shipboard deficiencies, not exceeding the three months. Third-party audits are performed by a Recognized Organizations member of IACS annually at our Piraeus office and twice within a 5-year cycle on board. The main purpose of these third-party audits is to maintain the validity of the Company’s Documents of Compliance and to issue Vessels’ Safety Management Certificate after having verified the effectiveness of our Safety Management System.

This year (2021) we have succeeded in scoring 80% clean inspections (without any deficiency) among 133 PSC boardings in total.

The total number of recorded deficiencies was 68. Among Fleet it was noted one (1) detention.

2.18

Inspection / Vessel

0.51

Deficiency / Inspection

80%

Inspections without Deficiency

0.19%

ISM related

Paris MOU

Medium Performance Company

US Coast Guard

Excellent inspection record
Company’s Documents of Compliance
Vessels’ Safety Management Certificate

External Assurance Report

Click here to view "Danaos 2021 ESG Report - External Assurance Report"

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