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Board's work and fees

The Board’s role, composition and independence conditions

The Board of Directors has ultimate responsibility for the Company’s organization and administration. The Board appoints the CEO, who is responsible for the day-to-day operations within the Company, in accordance with the Board’s guidelines.

The Board of Directors of Industrivärden plays a central role in the Company’s business model for exercising long-term active ownership. It is responsible for, among other things, the Company’s strategy, formulation and application of the methods for active ownership, and overarching ownership matters concerning the portfolio companies. The Articles of Association stipulate that the Board shall consist of a minimum of three and a maximum of nine directors. The Board’s composition and the directors’ attendance at board and committee meetings are shown below.

The Nominating Committee’s reasoned statement ahead of the 2023 AGM certifies that in formulating its recommendations for members of the Board of Directors, the Nominating Committee relied on Rule 4.1 of the Code as its diversity policy. The aim of the policy is that the Board shall have a suitable composition in respect of the Company’s operations, phase of development and conditions in general, distinguished by a diversity and breadth of expertise, experience and backgrounds, whereby an even gender balance shall be strived for. The 2023 AGM resolved to appoint board members in accordance with the Nominating Committee’s recommendation. With respect to gender breakdown, this entailed that of eight elected directors, three were women and five were men.

The composition of Industrivärden’s board meets the Code’s requirement for independent directors. The Nominating Committee’s assessment regarding the directors’ independence status ahead of the 2023 AGM is outlined in the table below.

The Board has appointed an audit committee and a compensation committee tasked with conducting preparatory work for audit and compensation matters, respectively, for decision by the Board. The aim of the committees is to take a more in-depth look at, streamline and quality-assure the Board’s work on these matters.

The Board’s work

The Board’s work is laid out in the Rules of Procedure (incl. the CEO’s instruction), which are adopted yearly at the statutory board meeting. Among other things, the Rules of Procedure and the CEO’s instruction regulate and structure the Board’s duties during the year, clarify internal decisionmaking processes, prescribe the routine for dealing with conflicts of interest and stipulate the division of responsibility vis-à-vis the CEO. In addition to the Rules of Procedure, the Board adopts a number of governance documents for the Company’s operations.

Every board meeting follows an agenda that has been distributed to the directors along with relevant documentation. All board decisions are based on extensive documentation and are made following a discussion that is led by the Chairman of the Board. Senior executives of Industrivärden and employees in the investment organization participate in board meetings by making presentations on specific matters.

In addition to the statutory board meeting, which is held in conjunction with the AGM, the Board normally meets eight times per year (regular meetings, including meetings in connection with the publication of interim and year-end reports). Extra board meetings are called when necessary.

The Board held a total of ten meetings in 2023. At the regular board meetings, a number of set agenda points were addressed, including reports on the financial result of operations, development of net asset value and performance of the equities portfolio, and on equity transactions that have been carried out and an update on macroeconomic conditions. Within the framework of active ownership, a significant proportion of the board's work has consisted of hearing reports, discussing and evaluating the performance of the portfolio companies as well as Industrivärden's owner agenda for exercising its active ownership, including specific investigative projects related to the portfolio companies. The Board also works actively on a continuous basis with the issue of responsibility and compliance with laws and regulations, which included the yearly review of the Company’s Code of Conduct and other internal policies.

In 2023, the Board placed considerable emphasis on dis- cussing the effects of the geopolitical and macroeconomic conditions during the year, such as the consequences of major conflicts and an otherwise rapidly changing geopolitical environment, economic, inflation and interest rate trends, as well as what this environment means for the port- folio companies and the industries and markets in which they operate. Furthermore, the Board discussed and evaluated the portfolio companies' approach to sustainability and other issues such as energy. Another key focus area in 2023 was the evaluation of portfolio companies based on relevant technology and digitization shifts, including AI. The CEOs of the portfolio companies regularly give presentations to the Board on their respective companies' operations. In 2023, the CEOs of Alleima and Handelsbanken gave such presentations.

Each year the Board evaluates Industrivärden’s financial reporting and makes demands on its content and structure to ensure it maintains a high level of quality. In connection with the board meeting that covers the annual financial statements, the Board of Directors’ Report, the proposed distribution of earnings and the year-end report, the Company’s auditor submits a report on its observations and assessments from the performed audit.

Evaluation of the Board’s work

The Board’s work is evaluated yearly through a structured process conducted under the direction of the Chairman of the Board. The 2023 evaluation was conducted via a questionnaire that each board member was requested to complete, in the aim of gaining an idea about the directors’ views on, among other things, how the board work has been conducted and which measures can be taken to improve the board work as well as which matters the directors feel should be given more attention. The evaluation also aims to provide information about areas the directors feel may be suitable to have additional expertise on the Board. This could pertain to expertise related to Industrivärden’s operations, business environment, internal policies and core values, but also expertise related to the portfolio companies’ operations, sectors and markets, and sustainability issues and relevant megatrends. The Chairman of the Board also held individual discussions with directors on the board work during the year. The results of the board evaluation were reported to and discussed by the Board, and were also reported on in the Nominating Committee.

Last update: Feb 28, 2024