Volvo 2005 Annual Report Download - page 77

Volvo Group 2005 73
the Chairman, other members of the Board
and any remuneration for work on the Board’s
committees. In the years in which election of
auditors for Volvo shall be held, the Election
Committee presents proposals for election of
auditors and audit fees to be paid based on
the preparations carried out by Volvo’s Audit
Committee.
In conjunction with the Election Committee
proposing candidates for Chairman and the
other members of the Board, the Election
Committee shall comment on whether those
persons who are proposed are to be consid-
ered as independent in relation to the com-
pany and company management as well as to
large shareholders in the company. The
Election Committee’s proposal shall be pre-
sented to Volvo in sufficient time to be able to
be included in the notice of the Annual General
Meeting and at the same time on Volvo’s web-
site.
The Election Committee, which was
appointed at Volvo’s Annual General Meeting
in 2005, comprises Volvo’s Chairman Finn
Johnsson, Lars Idermark, representing the
Second Swedish National Pension Fund,
Marianne Nilsson, representing Robur Funds,
Curt Källströmer, representing Svenska
Handelsbanken and Thierry Moulonguet, rep-
resenting Renault SA. The Election Committee
internally selected Lars Idermark as Chairman.
The work of the Election Committee is gov-
erned by the instructions approved by the
Volvo Annual General Meeting in 2005.
The Election Committee’s proposal for the
2006 Annual General Meeting will be provided
on Volvo’s website.
The Board
In 2005, Volvo’s Board of Directors consisted
of eight members elected by the Annual
General Meeting. In addition, the Board had
three members and two deputy members
appointed by employee organizations. The
CEO, Leif Johansson, was a member of the
Board.
The Board held six regular meetings and
three extraordinary meetings in 2005.
The Board has adopted work procedures for
its activities that contain rules pertaining to the
distribution of work between the Board mem-
bers, the number of Board meetings, matters
to be handled at regular meetings of the
Board and duties incumbent on the Chairman.
In addition thereto, the work procedures con-
tain directives concerning the tasks of the
Audit Committee and the Remuneration
Committee respectively. The Board has also
issued written instructions specifying when
and how information required to evaluate the
company’s and Group’s financial position
should be reported to the Board as well as the
distribution of duties between the Board and
the President and in what circumstances the
Executive Vice President and Deputy CEO is
to substitute for the CEO.
The Annual General Meeting decides on the
fees to be paid to the Board members elected
by the shareholders. The Annual General
Meeting held on April 12, 2005 approved a
total fee to the Board, for the time until the end
of the next Annual General Meeting, of SEK
4,775,000. The fee was to be distributed
among the Board Members according to the
following. The Chairman of the Board receives
a fee of SEK 1,350,000, the remaining mem-
bers a total of SEK 2,700,000 to be distributed
among the members as the Board decides. In
addition, the Chairman of Audit Committee
shall receive SEK 250,000 and the other two
members of the Audit Committee SEK
125,000 each and the members of the
Remuneration Committee SEK 75,000 each.
During the year, the Board reviewed the
bus ines s pla ns and st rate gie s f or the va rio us
bus ines ses in th e Volvo G roup . In ad diti on
thereto, the Board reviewed the financial pos-
itions of AB Volvo and the Volvo Group on a
regular basis and acted in order to ascertain
that there are efficient systems in order to fol-
low-up and control the business and financial
position of the Volvo Group. In connection
therewith, the Audit Committee is responsible
for preparing for the Board’s work through
quality assurance of the company’s financial
reporting through reviewing the interim reports
and the annual report. The Board has met with
the company’s auditors during 2005. The
Board also dealt regularly with matters involv-
ing divestments, acquisitions, the establish-
ment of new operations, and matters related
to investments in product renewal and product
development in the Group’s business areas.
The Board’s work is mainly performed
through the Board meetings and through
meetings in the respective committees of the
Board. In addition thereto, the chairman of the
Board is in regular contact with the CEO in
order to discuss the on-going business and to
ensure that the decisions taken by the Board
are executed.
An account of each Board member’s age,
education, main professional experience,
other board memberships, ownership of shares
in Volvo and the years of membership on the
Volvo Board is presented on page 79.
During 2005, the Board performed its
yearly evaluation of the Board’s work. The writ-
ten report has been submitted to the Election
Committee.
Independence requirements
The Board of Directors of Volvo must meet
independence requirements pursuant to the
rules of the Stockholm Stock Exchange, the
Code and NASDAQ’s regulations, as well as
the Sarbanes-Oxley Act. Below follows a short
description of the rules o the Stockholm Stock
Exchange and the Code. The independence
requirements mainly mean that only one per-
son from the company’s management may be
a member of the Board, that a majority of the
Board shall be independent of the company
and the company management and that at
least two of the members that are independent
from the co mpa ny and the c om pa ny’s manage-
ment shall also be independent of the compa-
ny’s major shareholders. In addition, the Code
The Board’s composition and
attendance at meetings 1 January
2005–31 December 2005
Remune-
Audit ration
Board Committee Committee
Finn Johnsson 9 4
Per-Olof Eriksson 9 4
Patrick Faure 9
Haruko Fukuda 9 4
Tom Hedelius 9 4
Leif Johansson 9
Louis Schweitzer 8 3
Ken Whipple 8 4
Martin Linder,
employee representative 9
Olle Ludvigsson,
employee representative 9
Johnny Rönnkvist,
employee representative 9
Total number
of meetings 9 4 4