Volvo 2008 Annual Report Download - page 70

In addition thereto, the work procedures con-
tain directives concerning the tasks of the
Audit Committee and the Remuneration Com-
mittee respectively. The Board has also issued
written instructions specifying how fi nancial
information should be reported to the Board
as well as the distribution of duties between
the Board and the President.
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 9, 2008 approved a total
fee to the Board, for the time until the end of
the next Annual General Meeting, of SEK
5,725,000 to be distributed among the Board
Members according to the following. The
Chairman of the Board should receive a fee of
SEK 1,500,000 and each of the remaining
members should receive a fee of SEK 500,000,
with the exception of the President. In addition,
the Chairman of Audit Committee should
receive SEK 250,000 and the other two mem-
bers 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. The Board also
reviewed the fi nancial positions of AB Volvo
and the Volvo Group on a regular basis and
acted in order to ascertain that there are effi -
cient systems in order to follow-up and control
the business and fi nancial position of the Volvo
Group. In connection therewith, the Audit
Committee was responsible for preparing for
the Board’s work to assure the quality of the
company’s fi nancial reporting through review-
ing the interim reports and the annual report.
In connection therewith, the Board met with
the company’s auditors during 2008. The
Board continuously evaluated the perform-
ance of the CEO.
During 2008, the Board focused specifi cally
on adapting the Group’s operations to the
present market conditions; initially to a very
strong demand for the Group’s products and
during the second half to a signifi cantly weaker
development. The Board has furthermore
focused specifi cally on issues pertaining to
continuation of the integration of newly acquired
operations and on issues relating to the continu-
ous renewal of the Group’s product portfolio.
The Board’s work is mainly performed
through Board meetings and through meet-
ings 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 on-going business and to
ensure that the decisions taken by the Board
are executed. An account of each Board mem-
ber’s age, main education, professional experi-
ence, assignments in the Company and other
important board memberships, own and
related parties ownership of shares in Volvo as
of March 4, 2009 and the years of member-
ship on the Volvo Board, is presented on the
Board and auditors page.
During 2008, the Board performed its
yearly evaluation of the Board’s work. The
Chairman has informed the Election Commit-
tee on the result of the evaluation.
Independence requirements
The Board of Directors of Volvo must meet
independence requirements pursuant to the
rules of the OMX Nordic Exchange Stockholm
(the “Stockholm Exchange”), and the Code.
Below follows a short description of the rules
of the Stockholm Exchange and the Code. The
independence requirements mainly mean that
only one person from the company’s manage-
ment may be a member of the Board, that a
majority of the Board members elected by the
General Meeting shall be independent of the
company and the company management and
that at least two of the Board members elected
by the General Meeting that are independent
from the company and the company’s manage-
ment shall also be independent of the compa-
ny’s major shareholders. In addition, the Code
demands that a majority of the members in the
Audit Committee shall be independent of the
company and the company management and
that at least one member shall be independent
of the company’s major shareholders. A mem-
ber of the Board who is a member of the com-
pany management shall not be a member of
the Audit Committee. With regard to the Remu-
neration Committee, the Code sets the require-
ment that members of the Remuneration Com-
mittee, with the exception of the Board
Chairman if a member of the Remuneration
Committee, shall be independent of the com-
pany and company management.
Considering the above demands regarding
the Board’s independence, the Election Commit-
tee has reported to the company the following
understanding about the independence from the
company and the company management as well
as the company’s largest shareholders with
regard to the Board members who were elected
at the Annual General Meeting in 2008:
Finn Johnsson, Peter Bijur, Tom Hedelius,
Philippe Klein, Louis Schweitzer, Ravi Venkate-
san, Lars Westerberg och Ying Yeh are all
independent from the company and company
management.
Leif Johansson, as Volvo’s CEO, is not inde-
pendent from the company and company man-
agement.
Louis Schweitzer and Philippe Klein are
Chairman of the Board and employee, respec-
tively, of Renault and represent Renault on the
company’s Board of Directors. Since Renault
controls more than 10% of the shares and
votes in Volvo, these persons may not, pursu-
ant to the Code and the rules of the Stockholm
Exchange, be considered as independent in
relation to one of the company’s major share-
holders.
Also the Election Committee must meet
independence requirements pursuant to the
Code. According to the Code the majority of
the members of the Election Committee are to
be independent of the company and the com-
pany management. Neither the CEO nor other
members of the executive management are to
be members of the Election Committee. At
least one member of the nomination commit-
tee is to be independent of the company’s
largets shareholder in terms of votes or any
Corporate Governance 2008
66