Board's work and fees
The Board's role, composition and fees
The Board of Directors has ultimate responsibility for Industrivärden’s organization and administration, and plays a central role in Industrivärden’s business model for exercising long-term active ownership. It is responsible for, among other things, the Company’s strategy, matters involving major purchases and sales of securities, 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 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 composition, the directors’ attendance at board and committee meetings, and directors’ fees for 2019 are shown in the table below.
At the 2020 AGM Pär Boman, Christian Caspar, Bengt Kjell, Fredrik Lundberg, Annika Lundius, Lars Pettersson and Helena Stjernholm were re-elected as directors on Industrivärden's board. Marika Fredriksson was elected as a new director. Nina Linander, who had declined re-election, left the Board in connection with the AGM. In addition, Fredrik Lundberg was re-elected as Chairman of the Board.
The Nominating Committee has 2020 made the following assessment with regard to directors’ independence. Fredrik Lundberg, Pär Boman and Lars Pettersson are not to be considered independent in relation to major owners, but independent in relation to the Company and the Executive Management. Helena Stjernholm is not to be considered independent in relation to the Company and the Executive Management, but independent in relation to major owners. Christian Caspar, Marika Fredriksson, Bengt Kjell and Annika Lundius are to be considered independent in relation to major owners as well as to the Company and the Executive Management. The composition of Industrivärden’s board meets the Code’s requirement for independent directors.
The members of the 2020 Audit Committee are Pär Boman, Fredrik Lundberg and Christian Caspar. Pär Boman is Chairman of the Audit Committee.
The members of the 2020 Compensation Committee are Fredrik Lundberg, Annika Lundius and Lars Pettersson. Fredrik Lundberg is Chairman of the Compensation Committee.
The 2020 Annual General Meeting resolved on unchanged fees to the Board compared with 2019.
The Board's work
The Board’s duties are laid out in the Rules of Procedure (incl. the CEO’s instruction), which are adopted yearly at the statutory board meeting. The Rules of Procedure and the CEO’s instructions regulate and structure the Board’s duties during the year, clarify internal decision-making processes and prescribe the division of responsibility visà-vis the CEO.
In addition to the Rules of Procedure, the Board adopts a number of governance documents for the Company’s operations. For further information, see Internal control and risk management. Every board meeting is conducted in accordance with 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. Minutes are recorded of board meetings by the Company’s General Counsel.
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 convened when necessary.
The regular board meetings cover a number of set agenda points. These include, among other things, a report on the financial result of operations, the development of net asset value and performance of the equities portfolio, and on equity transactions that have been carried out. Reporting also includes a description of the portfolio companies’ performance and macroeconomic conditions. In addition, a special review is normally conducted of one or more of the portfolio companies and of potential investments or divestments. Industrivärden’s action plans for the portfolio companies are also updated on a continuous basis and are presented to the Board. Through representation on the portfolio companies’ boards and nominating committees, Industrivärden’s board members and executive management play a central role in exercising active ownership. Senior executives of Industrivärden participate at board meetings to give presentations on specific matters. Within the framework of active ownership, a significant part of the Board’s work consisted of hearing presentations from members of the Executive Management covering Industrivärden’s more in-depth view and action plan the portfolio companies, and discussing and evaluating these action plans.
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 deals with 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.
The Board’s work is evaluated yearly in a structured process conducted under the direction of the Chairman of the Board.