Volvo 2006 Annual Report Download - page 83

The Board’s composition and atten-
dance at meetings January 1, 2006
to December 31, 2006.
Remu-
Audit neration
Board Committee Committee
Finn Johnsson 8 4
Per-Olof Eriksson 8 4
Tom Hedelius 8 4
Leif Johansson 8
Louis Schweitzer 7 4
Philippe Klein1 5
Ying Yeh1 4 3
Peter Bijur1 4 3
Ken Whipple2 3 1
Haruko Fukuda2 2 1
Patrick Faure2 1
Olle Ludvigsson,
employee representative 8
Johnny Rönnkvist,
employee representative 8
Martin Linder,
employee representative 7
Total number of
meetings 8 4 4
1 Elected to the Board at the 2006 Annual General
Meeting.
2 Resigned from the Board in conjunction with the
2006 Annual General Meeting.
senting Svenska Handelsbanken and Thierry
Moulonguet, representing Renault SA. The
Election Committee internally selected Curt
Källströmer as Chairman. The work of the
Election Committee is governed by the in-
structions approved by the Volvo Annual
General Meeting in 2006. In November, 2006
Lars Förberg representing Violet Partners LP,
became member instead of Eva Halvarsson.
Violet Partners LP replaced the Second
Swedish National Pension Fund as the fourth
largest shareholder, by votes, in Volvo. Eva
Halvarsson was at the same time co-opted
onto the Election Committee.
The Election Committee’s proposal for the
2007 Annual General Meeting will be provided
on Volvo’s website.
The Board
In 2006, AB Volvo’s Board of Directors con-
sisted 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.
During 2006, six regular meetings and two
extraordinary meetings were held.
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 add-
ition thereto, the work procedures contain
directives concerning the tasks of the Audit
Committee and the Remuneration Committee
respectively. The Board has also issued written
instructions specifying when and how informa-
tion 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 Presi-
dent 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 5, 2006 approved a total
fee to the Board, for the time until the end of the
next Annual General Meeting, of SEK
4,775,000 to be distributed among the Board
Members according to the following. The
Chairman of the Board receives a fee of SEK
1,350,000 and the remaining members 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
business plans and strategies for the various
businesses in the Volvo Group. In addition
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 2006. The
Board has continuously evaluated the perform-
ance of the CEO.
During 2006, the Board focused specifically
on issues pertaining to the Volvo Group’s strat-
egy with regard to Asia and thereby decided to
acquire shares in Nissan Diesel Motor Co Ltd
and on initiating discussions on the commercial
operation Dongfeng Motor Co Ltd. During the
year, the Board also discussed and decided to
renew the financial goals for the Volvo Group.
In addition, the Board also dealt regularly with
matters involving other divestments, acquisi-
tions and the establishment 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 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 dis-
cuss on-going business and to ensure that the
decisions taken by the Board are executed. An
account of each Board member’s age, educa-
tion, main professional experience, other board
memberships, ownership of shares in Volvo and
the years of membership on the Volvo Board is
presented on pages 84 and 85.
During 2006, the Board performed its yearly
evaluation of the Board’s work. The Chairman
has informed the Election Committee on the
result of the evaluation.
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 (SOX). Below follows a
short description of the rules of the Stockholm
Stock Exchange and the Code. The independ-
ence requirements mainly mean that only one
person 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 company and the company’s manage-
ment shall also be independent of the com-
pany’s major shareholders. In addition, the
Corporate Governance 2006 79