The Board of Directors has the overall responsibility for Electrolux organization and administration.
The Electrolux Board is comprised of nine members without deputies, who are elected by the AGM, and three members with deputies, who are appointed by the Swedish employee organizations in accordance with Swedish labor law. Keith McLoughlin, President and CEO of AB Electrolux during the period January 1, 2011 until January 31, 2016, has left the company and the Board on January 31, 2016. The Board of Directors therefore currently consists of eight members.
The AGM elects the Chairman of the Board. Directly after the AGM, the Board holds a meeting for formal constitution at which the Deputy Chairman of the Board is elected, among other things. The Chairman of the Board of Electrolux is Ronnie Leten and the Deputy Chairman is Torben Ballegaard Sørensen.
All current members of the Board are non-executive members. Three of the eight Board members are not Swedish citizens.
For additional information regarding the Board of Directors, see pages 150–151. The information is updated regularly at the Group’s website; www.electroluxgroup.com.
The Board is considered to be in compliance with relevant requirements for independence. The assessment of each Board member’s independence is presented in the table on pages 150–151.
All Directors except for Petra Hedengran have been considered independent. Petra Hedengran has been considered independent in relation to the company and the administration of the company, but not in relation to major shareholders of Electrolux.
Jonas Samuelson, President and CEO as from February 1, 2016, has no major shareholdings, nor is he a part-owner in companies having significant business relations with Electrolux.
The main task of the Board is to manage the Group’s operations in such a manner as to assure the owners that their interests, in terms of a long-term good return on capital, are being met in the best possible manner. The Board’s work is governed by rules and regulations including the Swedish Companies Act, the Articles of Association, the Code and the working procedures established by the Board. The Articles of Association of Electrolux are available on the Group’s website; www.electroluxgroup.com/corporate-governance.
The Board determines its working procedures each year and reviews these procedures as required. The working procedures describe the Chairman’s specific role and tasks, as well as the responsibilities delegated to the committees appointed by the Board.
In accordance with the procedures, the Chairman shall:
The working procedures for the Board also include detailed instructions to the President and other corporate functions regarding issues requiring the Board’s approval. Among other things, these instructions specify the maximum amounts that various decision-making functions within the Group are authorized to approve as regards credit limits, capital expenditure and other expenditure.
The working procedures stipulate that the meeting for the formal constitution of the Board shall be held directly after the AGM. Decisions at this meeting include the election of Deputy Chairman and authorization to sign on behalf of the company. The Board normally holds seven other ordinary meetings during the year. Four of these meetings are held in conjunction with the publication of the Group’s full-year report and interim reports. One or two meetings are held in connection with visits to Group operations. Additional meetings, including telephone conferences, are held when necessary.
During the year, the Board held nine meetings. All meetings except one were held in Stockholm, Sweden. The attendance of each Board member at these meetings is shown in the table on pages 150–151.
All Board meetings during the year followed an agenda, which, together with the documentation for each item on the agenda, was sent to Board members in advance of the meetings. Meetings usually last for half a day or one entire day in order to allow time for presentations and discussions. Cecilia Vieweg, Electrolux General Counsel, serves as secretary at the Board meetings.
Each scheduled Board meeting includes a review of the Group’s results and financial position, as well as the outlook for the forthcoming quarters, as presented by the President. The meetings also deal with investments and the establishment of new operations, as well as acquisitions and divestments. The Board decides on all investments exceeding SEK 100m and the Board’s Audit Committee receives reports on all investments exceeding SEK 25m.
Normally, the head of a business area also reviews a current strategic issue at the meeting. For an overview of how the Board’s work is spread over the year, see the table below.
The working procedures determined annually by the Board include detailed instructions on the type of financial reports and similar information which are to be submitted to the Board. In addition to the full-year report, interim reports and the annual report, the Board reviews and evaluates comprehensive financial information regarding the Group as a whole and the entities within the Group.
The Board also reviews, primarily through the Board’s Audit Committee, the most important accounting principles applied by the Group in financial reporting, as well as major changes in these principles. The tasks of the Audit Committee also include reviewing reports regarding internal control and financial reporting processes, as well as internal audit reports submitted by the Group’s internal audit function, Management Assurance & Special Assignments.
The Group’s external auditors report to the Board as necessary, but at least once a year. A minimum of one such meeting is held without the presence of the President or any other member of Group Management. The external auditors also attend the meetings of the Audit Committee.
The Audit Committee reports to the Board after each of its meetings. Minutes are taken at all meetings and are made available to all Board members and to the auditors.
The Board evaluates its work annually with regard to working procedures and the working climate, as well as regards the focus of the Board work. This evaluation also focuses on access to and requirements of special competence in the Board. The evaluation is a tool for the development of the Board work and also serves as input for the Nomination Committee’s work. The evalution of the Board is each year initiated and lead by the Chairman of the Board. Evaluation tools include questionnaires and discussions.
A separate annual evaluation of the Chairman’s work is performed under the leadership of the Deputy Chairman of the Board.
In 2015, all Board members responded to written questionnaires. As part of the evaluation process, the Chairman also had individual discussions with Board members. The evaluations were discussed at a Board meeting and the Chairman was not present when his performance was evaluated.
The result of the evalutations was also presented for the Nomination Committee by the Chairman and the Deputy Chairman. The Chairman was not present when the Deputy Chairman presented the result of the evaluation of the Chairman for the Nomination Committee.
Remuneration to Board members is determined by the AGM and distributed to the Board members who are not employed by Electrolux. Remuneration to each Board member was revised during 2015, see page 143.
The Nomination Committee has recommended that Board members appointed by the AGM acquire Electrolux shares and that these are maintained as long as they are part of the Board. A shareholding of a Board member should after five years correspond to the value of one gross annual fee.
Board members who are not employed by Electrolux are not invited to participate in the Group’s long-term incentive programs for senior managers and key employees.
For additional information on remuneration to Board members, see Note 27.
| SEK | 2013 | 2014 | 2015 |
|---|---|---|---|
| Chairman of the Board | 1,700,000 | 1,800,000 | 2,000,000 |
| Deputy Chairman of the Board | 590,000 | 625,000 | 640,000 |
| Board member | 515,000 | 540,000 | 550,000 |
| Chairman of the Audit Committee | 200,000 | 200,000 | 250,000 |
| Member of the Audit Committee | 85,000 | 90,000 | 95,000 |
| Chairman of the Remuneration Committee | 120,000 | 120,000 | 120,000 |
| Member of the Remuneration Committee | 55,000 | 60,000 | 60,000 |
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Each scheduled Board meeting included a review of the Group’s results and financial position, as well as the outlook for the forthcoming quarters.