9.3.3.2 Appointment of board members

The influence of shareholders on the appointment of board members is extremely high. Criticism on the appointment of board members is related to the criticism on the nomination committee in Sweden. The nomination committee proposes candidates that can be appointed by the general meeting. Since shareholders dominate the nomination committee and shareholders also decide about the appointments, the power of the shareholders where the appointment of board members is concerned can be regarded as considerable. This rather considerable influence cannot be considered as a good practice with respect to independence and should be reconsidered.

The articles of association may provide that a part of the board, which is not a majority, may be appointed in a different way. For example, the government or a large shareholder can appoint these directors. Especially when a shareholder is allowed to appoint this group of directors, the power of shareholders is increased further. This has a negative influence on the board’s independence from shareholders. Other members of the board are employee representatives, who are elected by their fellow employees.