9.3.3.6 Enforcement

Corporate Governance Policy 2001

Swedish Code of Corporate Governance 2005

Swedish Code of Corporate Governance 2008

Swedish Code of Corporate Governance 2010

1. CEO duality

It is not suitable to appoint a so-called working Chairman, nor that the board Chairman be appointed group managing director. (3.1)

If the chair of the board is employed in the company or in addition to his or her responsibilities as chair, has duties assigned by the company, these may not involve tasks that are part of the managing director’s responsibilities in the day-to-day management of the company. In such cases, the division of work between the chair and the managing director is to be clearly stated in the formal work plan of the board of directors and in the board’s instruction to the managing director. (3.4.3)

If the chair of the board is an employee of the company or has duties assigned by the company in addition to his or her responsibilities as chair, the division of work and responsibilities between the chair and the managing director is to be clearly stated in the formal work plan of the board of directors and in its instructions to the managing director. (6.2)

If the chair of the board is an employee of the company or has duties assigned by the company in addition to his or her responsibilities as chair, the division of work and responsibilities between the chair and the managing director is to be clearly stated in the board’s statutory Rules of Procedure and its Instruction to the managing director. (6.2)

2. Senior director

Not mentioned

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3. Number of NED s on the board

The board should normally consist of 6-9 people. (3.1)

The board is not to exceed the size that will allow it to employ simple and effective working methods. There are to be no deputies to the directors chosen by the shareholders’ meeting. (3.2.2)

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4. Percentage of board independence

The board members should be self-governed and independent in respect of the company’s management. No employees apart from the Managing Director should sit on the board. (3.1)

No more than one person from senior management may be a member of the board. (3.2.3) The majority of the directors elected by the shareholders’ meeting are to be independent of the company and its management. (3.2.4)At least two of the directors who are independent of the company and its management are also to be independent of the company’s major shareholders. A director who represents a major owner or is employed or a member of the board in a company that is a major shareholder is not considered independent. (3.2.5)

No more than one member of the board may be a member of the executive management of the company or a subsidiary. (4.3)The majority of the directors elected by the shareholders’ meeting are to be independent of the company and its executive management. At least two of these directors are also to be independent of the company’s major shareholders. (4.4)

No more than one member of the board may be a member of the executive management of the company or a subsidiary. (4.3)The majority of the directors elected by the shareholders’ meeting are to be independent of the company and its executive management. (4.4)At least two of the members of the board who are independent of the company and its executive management are also to be independent in relation to the company’s major shareholders. (4.5)

5. Definition of independence

Not mentioned

A director is not to be considered independent if he or she. [The SCCG 2005 included eight relationships or circumstances.] (3.2.4)

Major shareholders are defined as those who control at least ten per cent of the shares or votes in a company. The first part of this rule is contained in the regulations governing the markets run by O M X N o r d i c E x c h a n g e Stockholm and NGM, respectively, and already applies to companies whose shares are traded there. These regulations also contain criteria for defining independence. (Footnote of rule 4.4)

A director’s independence is to be determined by a general assessment of all factors that may give cause to question the individual’s independence of the company or its executive management. Factors that should be considered include. [The SCCG 2010 included seven relationships or circumstances.] (4.4)In order to determine a board member’s independence, the extent of the mem- ber’s direct and indirect relationships with major shareholders is to be taken into consideration6. A member of the board who is employed by or is a board member of a company which is a major shareholder is not to be regarded as independent.. (4.5)

6. Maximum tenure

Not mentioned

Members of the board are to be appointed for one year at a time. (3.2.6)

Members of the board are to be appointed for a period extending no longer than to the end of the next annual general meeting. (4.5)

Members of the board are to be appointed for a period extending no longer than to the end of the next annual general meeting. (4.7)

7. Audit committee

The board should appoint an audit committee from among board members who are not employees of the company. The committee should consist of at least three members and can co-opt further suitable persons. (5.1)

The board is to establish an audit committee consisting of at least three directors. The majority of the audit committee members are to be independent of the company and senior management. At least one member of the committee is to be independent of the company’s major shareholders. A board member who is part of senior management may not be a member of the committee.In companies with smaller boards, the entire board may perform the audit committee’s tasks, provided that a director who is part of the senior management does not participate in the work. (3.8.2)

The board is to establish an audit committee consisting of at least three directors. The majority of the audit committee members are to be independent of the company and its executive management. At least one member of the committee is to be independent of the company’s major shareholders. No board member who holds an executive management position is to be a member of the audit committee.If the board of directors feels it is appropriate, the entire board may perform the audit committee’s tasks, providing that no director who is a member of the executive management participates in this work. (10.1)

An audit committee is to comprise no fewer than three board members. The majority of the members of the committee are to be independent of the company and its executive management. At least one of the committee members who are independent of the company and its executive man-a g e m e n t i s a l s o t o b e independent of the company’s major shareholders. (7.3)

8. Nomination committee

To help ensure there is a sound selection process and to guarantee quality and openness in the nomination process leading to the election of the board, the Swedish Shareholders’ Association recommends that every company quoted on the stockmarket should set up a nomination committee.The nomination committee should comprise 3-5 members and be appointed by the company’s owners at the shareholders’ meeting. The members of the nomination committee should reflect the company’s different categories of owners. At least one member should be linked with the smaller owners. The Chairman of the board should also be on the committee. Members should not be employees of the company. (3.1.1)

The company is to have a nomination committee that represents the company’s shareholders. The shareholders’ meeting is to appoint members of the nomination committee or to specify how they are to be appointed. (2.1.1)The nomination committee is to have at least three members. The majority of the members of the nomination committee are not to be members of the board of directors. The managing director or other company managers are not to be members of the nomination committee. The chair of the board of directors or another board member is not to chair the nomination committee. (2.1.2)

The shareholders’ meeting is to appoint members of the nomination committee or to specify how they are to be appointed. This decision is to include procedures for replacing members of the nomination committee who leave before its work is concluded. (2.2)The nomination committee is to have at least three members, one of whom is to be appointed committee chair. The majority of the members of the nomination committee are to be independent of the company and its executive management. Neither the managing director nor other members of the executive management are to be members of the nomination committee. At least one member of the nomination committee is to be independent of the company’s largest shareholder

The shareholders’ meeting is to appoint members of the nomination committee or to specify how they are to be appointed. This decision is to include procedures for replacing members of the nomination committee who leave before its work is concluded. (2.2)The nomination committee is to have at least three members, one of whom is to be appointed committee chair. The majority of the members of the nomination committee are to be independent of the company and its executive management. Neither the managing director nor other members of the executive management are to be members of the nomination committee. At least one member of the nomination committee is to be independent of the company’s largest shareholder in

in terms of votes or any group of shareholders that act in concert in the governance of the company. (2.3)Members of the board of directors may be members of the nomination committee but may not constitute a majority thereof. The chair of the company may not chair the nomination committee. If more than one member of the board is on the nomination committee, no more than one of these may be dependent of a major shareholder in the company. (2.4)

terms of votes or any group of shareholders that act in concert in the governance of the company. (2.3)Members of the board of directors may be members of the nomination committee but may not constitute a majority thereof. Neither the company chair nor any other member of the board may chair the nomination committee. If more than one member of the board is on the nomination committee, no more than one of these may be dependent of a major shareholder in the company. (2.4)