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Nederman Holding AB is a Swedish public limited company. Governance of the Nederman Group takes place via the General Meeting, the board of directors and the Chief Executive Officer, as well as Nederman’s executive management team, in accordance with the Swedish Companies Act, the Articles of Association, and the rules of procedure for the board of directors, among other things. Considering Nederman’s group structure, the composition of the board of directors in operating subsidiaries, often with representatives from the executive management team, constitutes yet another share of governance for the Group.
The Swedish Code of Corporate Governance shall be applied to all firms on the Stockholm Stock Exchange that have a market capitalisation exceeding SEK 3,000m. Nederman’s market capitalisation at the time of listing is estimated to be substantially less than SEK 3,000m and therefore the Company has chosen to hold off on applying the code. However, Nederman already uses several of the procedures that the code prescribes in order to benefit the shareholders’ opportunities for corporate governance, which are described below. Nederman also intends to follow the development of the code’s practical application with the purpose of regularly considering whether it should be applied in its entirety.
Annual General Meeting and Extraordinary General Meeting
The General Meeting is the highest decision-making body in which shareholders can exercise their influence by voting on key issues, such as adoption of income statements and balance sheets, allocation of the Company’s profit, discharge from liability of board members and the Chief Executive Officer, election of board members and auditors, as well as remuneration to the Board of Directors and auditors.
Board of Directors
The Bboard of directors is the second highest decision-making body after the General Meeting. The chief task of the Board of Directors is to decide on the Company’s business focus, its resources and capital structure, as well as its organisation and
management of affairs. The Board’s general obligations also include continuously evaluating the Company’s financial situation and approving the Company’s business plan. In its general undertaking, the Board addresses issues such as the Company’s
strategy, acquisitions, major investments, divestments, Board of Directors and interim reports, as well as appointing the Chief Executive Officer, etc.
The producing of the annual report follows written rules of procedure that are established annually at the statutory board meeting. The rules of procedure indicate how the work shall be allocated, where appropriate, among the board members, how often the Board meets, and to what extent the deputies shall take part in the Board and are called to meetings. In addition, the rules of procedure regulate the Board’s obligations, quorum, division of responsibilities between the Board and the Chief Executive Officer, etc.
The Board meets according to an annual schedule that is decided in advance. In addition to these meetings, additional meetings may be arranged to deal with events of unusual importance. In addition to meetings, the Chairman of the Board and the Chief Executive Officer conduct an ongoing dialogue with respect to administration of the Company.
The distribution of work between the Board of Directors and the Chief Executive Officer is regulated in the rules of procedure for the Board of Directors and in the guidelines for the Chief Executive Officer. The Chief Executive Officer is responsible
for implementation of the business plan as well as day-today management of the Company’s affairs and the daily operations of the Company. This means that the Chief Executive Officer makes decisions in those questions that can be considered to fall under the day-to-day management of the Company. The Chief Executive Officer may take action without the authorisation of the board, in matters which, considering the scope and nature of the Company’s business, are unusual or of great importance, if awaiting a decision from the Board would cause substantial trouble for the Company’s business. Instructions to the Chief Executive Officer also regulate responsibilities
for reporting to the Board of Directors.
The Board receives a monthly written report containing information following up the Company’s sales, orders statistics, operating results and working capital developments. Moreover, the material contains comments from the Chief Executive
Officer and the Chief Financial Office (e.g., brief comments on the different markets). During months when the Board meets the monthly report is more extensive and also includes a balance sheet and cash flow statement, among other things.
Every year the Senior Executives formulates a strategy proposal, which is discussed and adopted at the board meeting held about halfway through the year. The work with the business plan (including the budget for the coming year) is usually carried out ”bottom-up” and based on the strategy adopted by the Board of Directors. The Chief Executive Officer and the Chief Financial Officer present the business plan proposal to the Board of Directors. After the Board discusses the business plan, it is usually adopted at the last meeting during the autumn. Moreover, the Company usually issues an updated forecast at the end of each quarter in conjunction with the quarterly
reports.
Once a year the Board evaluates the Management team in a systematic fashion. In this context, the Management team includes certain non-senior managers i.e. broader group of employees than what in other parts in this prospectus have been defined as included in the Senior Executives.
During the past few financial years the Board of Directors has had to address many issues of strategic significance. During 2006 and so far during 2007 special focus has been placed on the Group’s continued expansion, including acquisitions, the Group’s financial framework and targets, as well as work preparations for listing the Company’s shares on the Stockholm Stock Exchange. The Board has also evaluated the facilities in Helsingborg, please refer to section Business description under the heading Manufacturing and logistics. During 2006 the Board of Directors held eight minuted meetings and to date in 2007 the Board has held three minuted meetings. A total of SEK 450,000 was paid in directors’ fees for financial year 2006. The 2007 Annual General Meeting resolved that SEK 150,000 would be paid as directors’ fees to the Chairman of the Board and SEK 75,000 to each regular member. No renumerations are paid to board members employed by EQT Partners AB.
The Annual General Meeting elects board members annually for the time until the next Annual General Meeting is held. The Board of Directors shall consist of at least three and no more than eight ordinary members, as well as a maximum of three deputies. In addition, the Board may also include employee representatives1).
Main owners, board members and the Chief Executive Officer performs a yearly and detailed evaluation of the Board. The evaluation regards among other things the Board’s composition, board members and the board’s work and routines.
Nederman’s Board of Directors consists of six members elected by the 2007 Annual General Meeting and two employee representatives. The Chief Executive Officer is not a member of the Board of Directors but participates at meetings by presenting information, as does the Chief Financial Officer as a rule. The Chairman of the Board does not participate in the operating management of the Company.
Board members are presented in greater detail in the section Board of Directors, senior executives and auditors.
Committees
Questions about salary structuring and benefits for the Chief Executive Officer and the management are addressed and approved by a remuneration committee. This committee consists of Anders Scharp and Caspar Callerström. Anders Scharp
is chairman of the committee.
The 2007 Annual General Meeting resolved on principles for remuneration to the Chief Executive Officer and Senior Executives, which is presented in greater detail under the subheading Renumeration to the Board of Directors and Senior Executives
below.
The Company’s auditors inform the entire Board about the results of their work by once a year participating at the board meeting to give an account of the year’s audit and their view on the Company’s control system without anyone from the management being present. Therefore Nederman complies with the demand on having an audit committee within the framework of the Swedish code for corporate governance. The principles for remuneration to the Company’s auditors are resolved by the Annual General Meeting.
The Company has not appointed a formal nomination committee.
The Chairman of the Board convenes the major shareholders annually well in advance of the Annual General Meeting in order to gain support for proposals to the Annual General Meeting’s election of a new Board of Directors.
Auditor
The auditor audits the Company’s annual reports and accounting, as well as the management of the Board of Directors and the Chief Executive Officer. The auditor submits an audit report to the Annual General Meeting after each financial year.
The Annual General Meeting appoints auditors for a period of four years. The 2003 general meeting elected the auditor Alf Svensson, KPMG Bohlins AB, up until the 2007 Annual General Meeting. At the Annual General Meeting, 27 April 2007
KPMG Bohlins AB with auditor Alf Svensson as main responsible
was elected for a period of four years.
The Company’s auditor audits the annual accounts and accounting and the Company’s current operations and routines, to make an opinion on the accounting and the management of the Board of Directors and the Chief Executive Officer. The annual report and financial statements are reviewed during January and February.
Along side of Nederman, Alf Svensson does not have any assignments in companies over which Nederman’s principle shareholders (prior to the distribution of ownership at the listing), board members or Chief Executive Officer have any material
influence. Alf Svensson is an authorised public accountant and member of the Swedish Institute of Authorised Public Accountants. Remuneration to KPMG for assignments other than auditing amounted to SEK 877,000 in 2006 and related to tax issue studies, IFRS conversion and an audit study regarding Nedermans readiness to be listed.
Remuneration to the Board of Directors and Senior Executives
The 2007 Annual General Meeting adopted a policy relating to remuneration and terms of employment for 2007, applying the following underlying principles: fixed salary is paid for satisfactory work. In addition there is a potential for variable compensation linked to the Company’s performance and tied up capital. Variable compensation may amount to a maximum of 30 to 50 percent of the annual salary, depending on the individual’s position in the Company.
The Chief Executive Officer’s pension plan is a defined contribution plan with an annual premium equivalent to 30 percent of the annual base salary. For others in the administration, pension payments follow the contractual ITP plan, except for one member, whose pension payments are made with 10 official “price base amounts” per year.
If the Chief Executive Officer gives notice of termination, the term of notice is six months. If the Company gives notice of termination, the CEO is entitled to monthly pay for the equivalent of 18 to 24 months (the last six months with reservations for new employment). For others in the management the term of notice is twelve months if the Company gives notice of dismissal, and six months if the employee resigns. There is no agreement between board members or senior executives and Nederman or any of its subsidiaries for benefits upon conclusion of their assignments. There are no shares or share pricerelated incentive programs at this time for the Board of Directors or senior executives.
Nederman’s executive management team consists of seven persons (including the Chief Executive Officer), who are listed in the section Board of Directors, Senior Executives and auditors under the subheading Senior Executives. In addition to remuneration to the Board of Directors and the Chairman of the Board, remuneration in the table below refers to compensation to these seven executive officers. Other benefits mainly comprise car benefits and health insurance.
Information policy
Nederman has an Information Policy according to which the Company shall publish quarterly, six-month, year-end, and annual reports. In connection with publication of the six-month and year-end reports the Company may arrange analyst conferences and meetings with the media to discuss the Company’s operations, performance and financial position.
1) In addition to the provisions of an enterprise’s articles of association, Swedish law prescribes that, if the average number of employees in an enterprise during the most recent financial year was at least 25, labor unions representing the Company’s employees have the right to appoint two additional board members and two deputy board members (or three, where appropriate, if the Company is active in more than one industry and has at least 1,000 employees in Sweden). |
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