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.
The AGM elects the Chairman of the Board. Directly after the AGM, the Board holds a meeting for formal constitution at which the members of the Commttees of the Board are elected, among other things. The Chairman of the Board of Electrolux is Ronnie Leten.
All current members of the Board, except for the President and CEO, are non-executive members. Two of the nine Board members are not Swedish citizens.
For additional information regarding the Board of Directors, see pages 152–153. 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 page 152.
All Directors except for Petra Hedengran and Jonas Samuelson 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 has been considered independent in relation to major shareholders of Electrolux but not, in his capacity as President and CEO, in relation to the company and the administration of the company.
Jonas Samuelson has no major shareholdings, nor is he a part-owner in companies having significant business relations with Electrolux. Jonas Samuelson is the only member of Group Management with a seat on the Board.
One of the main tasks 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 profitable growth and value creation 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 and the Code, the Chairman shall among other things:
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 statutory meeting include the election of members of the Commttees of the Board and authorization to sign on behalf of the company. In addition to the statutory Board meeting, 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 page 152.
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. 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 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.
In 2016, 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.
The result of the evalutations was presented for the Nomination Committee by the Chairman of the Board.
Remuneration to Board members is determined by the AGM and distributed to the Board members who are not employed by Electrolux. The remuneration to the Chairman and the Board members was revised during 2016, see page 145.
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 | 2016 | 2015 | 2014 |
|---|---|---|---|
| Chairman of the Board | 2,030,000 | 2,000,000 | 1,800,000 |
| Deputy Chairman of the Board | — | 640,000 | 625,000 |
| Board member | 560,000 | 550,000 | 540,000 |
| Chairman of the Audit Committee | 250,000 | 250,000 | 200,000 |
| Member of the Audit Committee | 95,000 | 95,000 | 90,000 |
| Chairman of the Remuneration Committee | 120,000 | 120,000 | 120,000 |
| Member of the Remuneration Committee | 60,000 | 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.