The corporate governance of Swedish companies is regulated by a combination of statutory rules, self-regulation and unwritten practice and traditions.
Key elements of the framework include the Swedish Companies Act, the Swedish Corporate Governance Code and the listing requirements and agreements applicable on the respective stock exchanges. Another key aspect is the statements issued by the Swedish Securities Council regarding what is regarded as accepted practice on Swedish stock markets.
The Swedish Companies Act
The Swedish Companies Act contains fundamental rules regarding company organisation. The Act stipulates which corporate bodies a company is required to have, the tasks of each of these bodies and the responsibilities of the people within each body. The Code acts as a complement to the Act by setting higher demands in some areas, but also allows companies to deviate from Code rules if this leads to better corporate governance, (comply or explain).
The four governance bodies
The Swedish Companies Act stipulates that a company must have three decision making bodies in a hierarchical relationship: The Shareholders' Meeting , the Board of Directors and the Chief Executive Officer. There must also be a controlling body, the Auditor, appointed by the Shareholders' Meeting.