9.2.2.1 Board members

Section 8: 8 SCA provides that the members of the board of directors are appointed by the general meeting. In addition, the articles of association may prescribe that a certain part of the board is appointed in a different way, for example by the government or a large shareholder. However, the right to appoint members of the board may never be delegated to the board itself or to individual members of the board. The possibility to appoint directors in another way is also limited by section 8: 47 SCA that requires that more than half of the board should be appointed by the general meeting.

The nomination committee nominates candidates for the election of a board member or chairman (Rule 2.1 SCCG). Rule 2.6 SCCG 2010 specifies that the proposal should be presented in the notice of the general meeting. Furthermore, relevant information must be posted on the company’s website, such as the candidate’s age, education, work experience (at the company), shareholdings in the company, whether he is deemed independent of the company and its management and/or independent of major shareholders, and – in the case of a re-election – the year he was first elected to the board. In addition to the requirements of the SCCG 2010, the Swedish Companies’ Act requires in section 8: 48 that prior to the board election of a public company, the chairman must provide the general meeting with information about positions in other companies of the proposed candidates.

The general meeting appoints the members of the board of directors who receive the most votes, but the articles of association may provide otherwise, according to section 7: 41 SCA. Appointments for the board of directors shall apply until the end of the annual general meeting in the year after the year of appointment, according to section 8: 13 SCA. The articles of association may, however, provide that an appointment shall apply for a longer period. This extension is limited to a period until the end of the fourth general meeting after the year of appointment. The extension of section 8: 13 SCA is inconsistent with rule 4.7 of the SCCG that provides that members of the board are appointed for a period of no longer than to the end of the next general meeting. As mentioned earlier, the Swedish Companies’ Act is applicable to all companies in Sweden, whereas the SCCG is applicable to listed companies only. So listed companies have to comply with the SCCG and the maximum term of appointment is therefore one year, unless the company explains why it deviates from this rule in the SCCG.