Board of directors

The board is responsible for the company’s organisation and the management of the company’s business.

The extensive decision-making authority assigned by the law to the board of directors is primarily limited by the legal provisions giving the shareholders’ meeting exclusive decision-making powers on certain matters, e.g. changes to the articles of association, election of board members and the auditor and adoption of the balance sheet and income statement.

The board is obliged to follow any specific directives passed by the shareholders’ meeting, providing these do not contravene the Swedish Companies Act or the company’s articles of association.

The board may delegate tasks to individual members or non-members of the board, but may not disclaim liability for the company’s organisation and management or its obligation to ensure satisfactory control of the company’s financial position.When delegating, the board has an obligation to act responsibly and to monitor that such delegation can be maintained.

The board must specify its ways of working in written rules of procedure. If there is a division of tasks and responsibilities between the members of the board, e.g. if the board has a committee to prepare certain issues, such as an audit committee, this must be described in its rules of procedure. The board may also delegate decision making to such a committee, but it may not disclaim responsibility for decisions made on this basis.

The board must consist of no fewer than three members, one of which is to be appointed chair. The chair has particular responsibility for leading the work of the board and ensuring that it fulfils its legal obligations. Current OMX Nordic Exchange Stockholm regulations stipulate that no more than one of the directors elected by the shareholders’ meeting may be on the executive management team of the company or one of its subsidiaries. Normally, this place is taken by the chief executive officer. However, many companies have no member of the executive management on the board.

Boards of Swedish stock exchange listed companies are therefore composed almost entirely of non-executive directors. The same stock exchange regulation also states that a majority of the members of the board are to be independent of the company and its management. At least two members must also be independent of the company’s major shareholders,3 which means that it is possible for major shareholders of Swedish companies to appoint a majority of members with whom they have close ties. This is in line with the positive view of active and responsible ownership expressed in the preparatory documents to the Swedish Companies Act.