Volvo 2006 Annual Report Download - page 82

Download and view the complete annual report

Please find page 82 of the 2006 Volvo annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 170

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170

Corporate bodies in
corporate governance
>>> The governance and control of the Volvo
Group is carried out through a number of cor-
porate bodies. At General Meetings, the share-
holders exercise their voting rights with regard,
for example, to the composition of the Board of
Directors of AB Volvo and election of external
auditors. An Election Committee proposes
candidates to serve as Board members, Board
Chairman and external auditors. The Board is
responsible for the Group’s long-term develop-
ment and strategy as well as controlling and
evaluating the company’s operations. In add-
ition, the Board appoints the President of AB
Volvo, who is also the Chief Executive Officer
(CEO). The duties of the Board are partly exer-
cised through its Audit Committee and its
Remuneration Committee. The CEO is in
charge of the daily management of the Group in
accordance with guidelines and instructions
provided by the Board.
The CEO is in charge of the daily management
of the Group through primarily two different
organs, the Group Executive Committee and
the business areas Boards of Directors. The
Group Executive Committee comprises those
who report directly to the CEO. At 2006 year-
end, there were 17 Group Executive Committee
members including the CEO and comprised
Presidents of the Group’s eight business areas
as well as President of Volvo Powertrain busi-
ness unit, who is also the Technical Director
for the Volvo Group. The Group Executive
Committee also includes the Executive Vice
President, who is also the Deputy CEO, Chief
Financial Officer and Heads of the Group’s
staff units. Meetings, which are led by the CEO,
deal with Group-wide issues and issues affect-
ing more than one business area, and supply
information concerning the Group’s perfor-
mance. The CEO or the Deputy CEO is the
Chairman of the Board for the Boards of all
business areas and these comprise mainly of
other members of the Group Executive
Committee. The Boards of the business areas
effect control and follow-ups of business areas’
financial development, business plans and
goals as well as make decisions regarding, for
example, investments.
Swedish Code of Corporate Governance
Volvo applies the Swedish Code of Corporate
Governance (“the Code”).
Between January 1, 2006 and December
31, 2006 Volvo did not deviate from any of the
Code’s regulations that were applicable during
this period, with the exception of paragraph
4.2.1. The exception is that Tom Hedelius is
member of the remuneration committe even
though he is not, according to the Code, inde-
pendent in relation to the company and the
company management.
This corporate governance report has not
been reviewed by the company’s auditors.
Nor have the company’s auditors reviewed the
Board’s report concerning the organization
of internal control with regard to financial
reporting.
Election Committee
The Election Committee is the shareholders’
body responsible for submitting to the Annual
General Meeting the names of candidates to
serve as Chairman and other members of the
Board, the fees to be paid distributed among
the Chairman, other members of the Board and
any remuneration for work on the Board’s com-
mittees. In the years in which election of aud-
itors 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 con-
sidered 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 presented 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 ap point-
ed at Volvo’s Annual General Meeting in 2006,
comprised Volvo’s Chairman Finn Johnsson,
Eva Halvarsson, representing the Second Swe d-
ish National Pension Fund, Björn Lind, repre-
senting SEB Funds, Curt Källströmer, repre-
Corporate
Governance
During 2006, the Board
focused specifi cally on
issues pertaining to the
Volvo Group’s strategy with
regard to Asia. The Board
has also decided to renew
the fi nancial targets for the
Volvo Group.
The Board at a visit to the Volvo Truck
plant in Gent.
78 Corporate Governance 2006