9.1.3 Swedish Code of Corporate Governance 2008

The SCCG 2005 was aimed at the largest listed companies in Sweden. The experience about compliance with the SCCG 2005 was expected to be useful for broadening the coverage over all companies at a later stage (Code Group 2005: 9). In 2008, the Swedish Corporate Governance Board (Kollegiet För Svensk Bolagsstyrning) believed that it was time to apply the code to all listed companies in Sweden (Swedish Corporate Governance Board 2008b: 3-4). Therefore, the SCCG 2005 was reviewed with the aim to shorten and simplify it. Most content remained the same with respect to the previous SCCG, but some rules have changed. The major changes with respect to independence in the Swedish Code of Corporate Governance 2008 (SCCG 2008) are discussed below.

The independence criteria of rule 3.2.4 of the SCCG 2005 were removed from the revised code. Rule 4.4 of the SCCG 2008 only provides that the majority of directors should be independent of the company and its executive management. At least two of these independent directors should also be independent of the company’s major shareholder. No single circumstance or relationship is part of the SCCG 2008 any longer. The comments of the Swedish Corporate Governance Board state that they refer to the independence criteria of the regulations governing the regulated Exchange (Swedish Corporate Governance Board 2008a: 20).

In order to meet international standards, the rules regarding the nomination committee have changed (Swedish Corporate Governance Board 2008a: 9). Whereas the SCCG 2005 provided in rule 2.1.2 that the majority of the nomination committee is not a member of the board, rule 2.3 of SCCG 2008 provides that the majority should be independent of the company and its executive management. The managing director or other members and the executive management are not allowed to be part of the nomination committee and at least one member should be independent of the company’s largest shareholder. Notwithstanding these changes, a majority of the nomination committee should still comprise non-board members and the general meeting should appoint all members, according to rule 2.4.

Other rules have not been changed with respect to independence or are only rephrased in the code of 2008.