Volvo 2009 Annual Report Download - page 62

CORPORATE GOVERNANCE REPORT 2009
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 thereof, the work procedures contain dir-
ectives concerning the tasks of the Audit
Committee and the Remuneration Committee
respectively. The Board has also issued written
instructions specifying how nancial informa-
tion should be reported to the Board as well as
dening 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 Meet-
ing held on April 1, 2009 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: 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 excep-
tion of the President. In addition, the Chairman
of the Audit Committee should receive SEK
250,000, the other two members of the Audit
Committee SEK 125,000 each and the mem-
bers of the Remuneration Committee SEK
75,000 each.
During the year, the Board reviewed the busi-
ness plans and strategies for the various busi-
nesses in the Volvo Group. The Board also
reviewed the nancial positions of AB Volvo and
the Volvo Group on a regular basis and acted in
order to ascertain that there are efcient sys-
tems in order to follow-up and control the busi-
ness and 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
nancial reporting through reviewing the interim
reports and the annual report. In connection
therewith, the Board met with the company’s
auditors during 2009. The Board continuously
evaluated the performance of the CEO.
During 2009, the Board focused specically
on adapting the Group’s operations and cost
structure to the signicantly weaker demand for
the Group’s products. Furthermore, the Board
focused on the continued integration of the
operations acquired during the last years and
issues relating to the continuous renewal of the
Group’s product portfolio. In addition, the Board
focused on securing a strong liquidity position
for the Group.
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 discuss on-
going business and to ensure that the decisions
taken by the Board are executed. An account of
each Board member’s age, main education, pro-
fessional experience, assignments in the Com-
pany, other important board memberships, their
and related parties’ ownership of shares in Volvo
as of February 26, 2010, and the years of mem-
bership on the Volvo Board, is presented on the
Board and auditors page.
During 2009, 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
Code. Up to October 1, 2009, these independ-
ence requirements were also set out in the
NASDAQ OMX Stockholm’s (“Stockholms-
börsen”) Rule Book for Issuers. Further, since
July 1, 2009, the Audit Committee must meet
independence requirements pursuant to the
Swedish Companies Act. Below follows a short
description of the independence requirements.
The independence requirements mainly state
that only one person from the company’s man-
agement 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 who are independent of
the company and the company’s management
shall also be independent of the company’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. According to the Swedish
Companies Act, the members of the Audit Com-
mittee may not be employees of the company.
With regard to the Remuneration Committee,
the Code sets the requirement that members of
the Remuneration Committee, with the excep-
tion of the Board Chairman if a member of the
Remuneration Committee, shall be independent
of the company and company management.
Prior to the Annual General Meeting 2009,
considering the above requirements regarding
the Board’s independence, the Election Com-
mittee reported the following understanding
with regard to the Board members who were
elected at the Annual General Meeting in
2009:
Finn Johnsson, Peter Bijur, Ravi Venkatesan,
Lars Westerberg, Ying Yeh and Anders Nyrén
are all independent of the company and com-
pany management as well as of the company’s
major shareholders.
Leif Johansson, as Volvo’s CEO, is independ-
ent of the company’s major shareholders but
not of the company and company management.
Louis Schweitzer is Chairman of the Board of
Directors of Renault S.A. and Jean-Baptiste
Duzan is employed by Renault S.A. Both of them
represent Renault s.a.s. on the company’s Board
of Directors. They are both independent of the
company and the company management but
are, since Renault s.a.s. controls more than 10
percent of the shares and votes in Volvo, not to
be considered as independent of one of the
company’s major shareholders.
After the Annual General Meeting 2009,
Louis Schweitzer has left his assignment as
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