Electrolux 2005 Annual Report Download - page 96
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Please find page 96 of the 2005 Electrolux 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.92 Electrolux Annual Report 2005
Corporate Governance Report 2005
The Board of Directors
The main task of the Electrolux Board of Directors is to manage the
Group’s affairs in such a way as to satisfy the owners that their inter-
ests in a good long-term return on capital are being met in the best
possible way. The Board’s work is governed by rules and regulations
that include the Swedish Companies Act, the Articles of Association,
the code and the working procedures established by the Board.
The Board decides on issues related to the Group’s main goals,
strategic orientation and major policies, as well as important issues
related to financing, investments, acquisitions and divestments. The
Board monitors and deals with, inter alia, follow-up and control of
Group operations, Group communication, and organization, including
evaluation of the Group’s operative management. The Board has also
the overall responsibility for establishing an effective system of
internal control and risk management.
Working procedures and meetings
The Board determines its working procedures each year and reviews
them when necessary. The working procedures include allocation of
tasks between Board members. The Chairman’s special role and
tasks are described, as well as the responsibilities delegated to the
committees appointed by the Board. In acordance with the above
procedures, the Chairman shall ensure that the Board functions
effectively and discharge its duties. The Chairman shall also organize
and distribute the Board’s work, and ensure that the Board’s deci-
sions are implemented effectively and that the Board annually evalu-
ates its work.
The working procedures for the Board of Directors also include
detailed instructions to the President and CEO and other various
corporate functions regarding issues that require the Board’s
approval. Among other things, these instructions specify the maxi-
mum amounts that various decision-making functions within the
Group are authorized to approve regarding credit limits, capital
expenditure and other outlays.
The working procedures stipulate that the meeting for formal
constitution of the Board shall be held directly after the AGM. Deci-
sions at this meeting include election of the Deputy Chairman, distri-
bution of remuneration to the Board members for work in commit-
tees, and authorization to sign for the Company. The Board normally
meets on six other occasions during the year. Four of these meetings
are held in connection with publication of the Group’s annual and
interim reports. One or two meetings are held in connection with visits
to Group operations. Additional meetings, including telephone
conferences, are held when necessary.
Ensuring quality in the financial reporting
The working procedures determined annually by the Board include
detailed instructions regarding the type of financial and other reports
that shall be submitted to the Board. In addition to interim reports and
the annual report, the Board reviews and evaluates comprehensive
financial information regarding the Group as a whole and the entities
it comprises.
The Board also reviews, primarily through the Audit Committee,
the most important accounting principles applied by the Group in
financial reporting, as well as major changes to these principles. The
tasks of the Audit Committee also include reviewing reports regarding
internal control and processes for financial reporting, as well as
internal audit reports submitted by the Group's Internal Audit func-
tion, Management Assurance & Special Assignments.
The Group’s external auditors report to the Board as necessary, but
at least once a year. At least one of these meetings is held without the
presence of the President and CEO or any other member of Group
Management. The external auditors also attend meetings of the Audit
Committee.
The Audit Committee reports to the Board after all its meetings.
Minutes are taken at all meetings of the Audit Committee and are
available to all Board members and the auditors.
Evaluation of the Board’s activities
The Board evaluates its activities annually with regard to working
procedures and the working climate, as well as the alignment of the
Board’s work. The evaluation also focuses on the access to and need
for special competence. This evaluation provides input for the nomina-
tion procedures in which the Nomination Committee determines mat-
ters such as the Board’s composition and remuneration to members.
The Deputy Chairman of the Board also manages a separate
annual evaluation of the Chairman’s work.
Composition of the Board
The Electrolux Board of Directors consists of ten members without
deputies who are elected by the Annual General Meeting for a period
of one year. Three additional members, with deputies, are appointed
by the Swedish employee organizations, in accordance with Swedish
labor laws.
With the exception of the President and CEO, the members of the
Board are non-executives.
Three of the ten members are not Swedish citizens. Four are
women.
For information on Board members, see page 98.
Changes in the Board in 2005
• Prior to the election of new Board members at the Annual General
Meeting on April 20, 2005, Thomas Halvorsen declined renomina-
tion, after having served on the Board since 1996.
• Ten Board members were elected at this AGM. Tom Johnstone,
Caroline Sundewall, Marcus Wallenberg and Louis R. Hughes were
elected as new Board members. Louis R. Hughes returned to the
Board after leaving it in 2004, when he was appointed Chief of Staff
for a group of advisors to the Afghanistan government.
• The AGM elected Michael Treschow as Chairman of the Board.
• The meeting for formal constitution of the Board re-elected
Peggy Bruzelius as Deputy Chairman.
• In the Audit Committee, Caroline Sundewall replaced
Thomas Halvorsen.
Remuneration to Board members
Remuneration to Board members is authorized by the AGM and
distributed by the Board to members who are not employed by the
Group. Information on remuneration to Board members is given in the
table below. Remuneration to the President and CEO is proposed by
the Remuneration Committee. Board members who are not employed
by Electrolux do not participate in the Group’s long-term incentive
programs, nor in any outstanding share or share price incentive
schemes.