Volvo 2013 Annual Report Download - page 99

Olof Persson, as AB Volvo’s President and
CEO of the Volvo Group, was considered inde-
pendent of the company’s major shareholders
but not of the company and the company man-
agement.
Since AB Industrivärden, prior to the Annual
General Meeting 2013, controlled more than 10
percent of the votes in the company, Anders
Nyrén, due to his capacity as President and
CEO of AB Industrivärden, was not considered
independent in relation to one of the company’s
major shareholders.
Work procedures
Every year, the Board adopts work procedures
for the Board’s work. The work procedures con-
tain rules pertaining to the distribution of work
between the Board members, the number of
Board meetings, matters to be addressed at
regular meetings of the Board and duties in -
cumbent on the Chairman.
In accordance with the work procedures,
Volvo’s Chairman shall organize and guide the
Board’s work, be responsible for contacts with
the owners regarding ownership matters and pro-
vide the owners’ viewpoints to the Board, ensure
that the Board receives adequate information and
decision documents for its work and verify that the
Board’s resolutions are implemented. In addition,
the work procedures contain directives concern-
ing the tasks of the Audit Committee and the Re -
muneration Committee respectively.
The Board has also issued written instruc-
tions specifying how fi nancial information should
be repor ted to the Board, as well as defi ning the
distribution of duties between the Board and
the President.
The Board’s work in 2013
The Board’s work is mainly performed within
the framework of formal Board meetings and
through meetings in the respective committees
of the Board. In addition, regular contact is
maintained between the Chairman of the Board
and the CEO in order to discuss on-going busi-
ness and to ensure that the resolutions taken
by the Board are executed.
In 2013, there were nine regular meetings
and one statutory meeting. The attendance of
Board members at these meetings is presented
in the table on page 97.
In the beginning of 2013, AB Volvo signed an
agreement with the Chinese vehicle manufac-
turer Dongfeng Motor Group Company Limited
(DFG) to acquire 45 percent of a new subsidiary
of DFG, Dongfeng Commercial Vehicles
(DFCV). The acquisition will include the major
part of DFG’s medium- and heavy-duty com-
mercial vehicles business. The completion of
the transaction is subject to certain conditions
including the ap provals of concerned authori-
ties. In January 2014, the National Develop-
ment and Reform Com mission in China gave its
approval of the es tablishment. Yet, additional
authority approvals are to be obtained, and
completion of the transaction is expected to
take place mid 2014. The agreement with DFG
has been preeceded by dis cussions and deci-
sions by the AB Volvo Board, and the Board
sees the cooperation with DFG as a possibility
to strengthen the Volvo Group’s position, both
in and outside China. The cooperation within
DFCV is therefore an important step towards
the Group’s vision to become the world leader in
sustainable transport solutions.
The Volvo Group continued the renewal of its
truck products ranges during 2013. Volvo
Trucks launched several new products in addi-
tion to the new Volvo FH which was launched in
2012. Renault Trucks renewed its total product
range, and is now offering a completely new
range of vehicles for Long Distance, Construc-
tion and Distribution applications. In August,
UD Trucks launched Quester, a new heavy-duty
truck range developed specifi cally for growth
markets. The launch of Quester is an important
step in the Volvo Group’s strategy to increase
sales in fast growing markets across for exam-
ple Asia Pacifi c. VE Commercial Vehicles Ltd., a
joint-venture between the Volvo Group and
Eicher Motors Ltd, launched the Pro Series, a
new range of trucks and buses developed spe-
cifi cally for India and other selected growth
markets. The renewal of the different truck
products ranges was the result of long-term
development projects that have been discussed
and decided upon by the AB Volvo Board.
During 2013 the Board further devoted time
to matters related to the strategies applicable
to the 2013–2015 period established for the
Volvo Group’s trucks business and other Busi-
ness Areas. The Group-wide effi ciency program
announced in September 2013 which encom-
passes both reduction of white collar employ-
ees and consultants and effi ciency enhance-
ments in the global industrial system is part of
the implementation of the strategies.
During the fall of 2013, the Board of Direc-
tors visited the Group’s businesses in China and
also plants within DFCV’s businesses in China.
In the end of 2013, the Volvo Group decided
to sell Volvo Rents, the Group’s North American
rental business for construction equipment, to
the US private equity fi rm Platinum Equity. The
transaction was completed on January 31, 2014
and has been preceeded by discussions within
the Board of Directors. The divesture is part of
the Group’s strategic effort to focus on the core
business. In the end of 2013, the Volvo Group
also agreed to acquire the off-highway hauler
business of the Terex Corporation with the
purpose of improving Volvo Construction Equip-
ment’s penetration in the core earthmoving
segment and extend its presence in light min-
ing. This was also a strategic transaction that
offers Volvo Construction Equipment consider-
able scope for growth, and it has been pre-
ceeded by discussions within the Board of
Directors.
As a result of the uncertainty about the
macro economic trend, the Board focused on
monitoring the business environment in order to
be prepared to adapt the operation to prevailing
demand. The Board also continuously worked
with leadership succession and leadership
development issues.
The Board also reviewed the fi nancial posi-
tions of AB Volvo and the Volvo Group on a
regular basis and acted in order to ensure that
there are effi cient systems for follow-up and
control of the business and the fi nancial posi-
tion of the Volvo Group. In connection therewith,
the Audit Committee was responsible for
preparing the Board’s work to assure the quality
of the Group’s fi nancial reporting by reviewing
the interim reports, the Annual Report and con-
solidated accounting. The Board also met with
the company’s auditors at several occasions
during 2013 and without the presence of man-
agement at one occasion. The Board continu-
ously evaluates the performance of the CEO.
During 2013 the Board performed its yearly
evaluation of the Board’s work.
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