Annual Report 2006 - Munters

Work of the Board of DirectorsGeneralAccording to the Company’s Articles of Association, theBoard of Directors shall consist of four to eight memberselected each year by the Annual General Meeting for theperiod until the end of the next Annual General Meeting.The Articles of Association permit the election of deputies,but no deputies were elected by the Annual General Meeting.By law, the employees appoint two members and two deputymembers to the Board of Directors. In 2006, Pia Nordqvistand Mats Persson were appointed as employee representativeson the Board, with Tommy Morin and Kjell Wiberg as deputies.The Group’s CFO participates in Board meetings as doesthe Board’s secretary, who is a lawyer and independent of theCompany. Other employees participate in Board meetings aspresenters of special issues or when otherwise deemed appropriate.The members of the Board of Directors are presentedon page 68 of the Annual Report.The Board of Directors establishes a written WorkingProcedure each year that regulates the Board’s work and theinternal distribution of responsibility, including its committees,decision procedures within the Board, the order ofmeetings and the Chairmen’s duties. The Board of Directorshas also issued instructions for the President and instructionsfor financial reporting to the Board. Furthermore, the Boardof Directors has adopted a number of other policies, which aredescribed below under the heading Policy documents.The Board of Directors takes responsibility for the Company’sorganization and the administration of its business andin so doing, must ensure that the organization is appropriateand dimensioned in such a manner that accounting, capitalmanagement and other financial matters are managed andchecked in a satisfactory manner. Furthermore, the Board ofDirectors is responsible for ensuring that the Company hasadequate internal controls and for continuously reviewingthe internal control systems. The Board of Directors is alsoresponsible for developing and following up the Company’sstrategies in the form of plans and goals. The Board of Directorscontinuously monitors the work of the President andoperative management.Among the members of the Board of Directors electedby the Annual General Meeting, there are persons withties to the Company’s major owners – Industrivärden andLatour – and persons who are independent of these parties.In accordance with the rules of the Code and the listingrequirements of the Stockholm Stock Exchange, seven of theBoard members elected by the Annual General Meeting areindependent of the Company. Of these, five are independentof the Company’s major owners and meet established requirementsfor experience.ChairmanAt the statutory meeting of the Board of Directors on 26April 2006, Berthold Lindqvist was elected Chairman untilthe end of the next Annual General Meeting. The Chairmanorganizes and leads the Board of Directors work so that it isconducted in accordance with the Swedish Companies Act,other laws and regulations, prevailing rules for exchange listedcompanies (including the Code) and the Board’s internalcontrol instruments. The Chairman follows business developmentthrough regular contact with the President and isresponsible for ensuring that Board members receive sufficientinformation and supporting materials for decisions.The Chairman is responsible for ensuring that the Boardof Directors continuously updates and increases its knowledgeof the Company and in other respects receives the trainingrequired to be able to conduct Board work effectively. Inaddition, the Chairman ensures that an annual evaluationis conducted of the Board of Directors’ work and that thisinformation is provided to the Nominating Committee. TheChairman represents the Company in ownership matters.Work proceduresAccording to the Work Procedures currently in effect, theBoard of Directors shall meet not less than five times peryear and for one statutory meeting per year. It shall also beconvened at other times when the situation so demands. During2006, the Board of Directors held six ordinary meetingsand four per capsulam meetings. Board work during the yearwas focused on strategic, financial and accounting issues. Alldecisions were taken unanimously. At each Board meeting,the President reports on the Group’s development.As evident in the table below, attendance at Board meetingswas highly favorable.Board ofDirectorsAuditCommitteeCompensationCommitteeNumber ofmeetings, total 10 5 5Berthold Lindqvist 1 8 5Anders Ilstam 9Bengt Kjell 9 5Eva-Lotta Kraft 9Sören Mellstig 9 5Sven Ohlsson 2 9 5Jan Svensson 9 51Chairman of the Board of Directors and the Compensation Committee2Chairman of the Audit CommitteeAudit CommitteeAt the statutory meeting of the Board of Directors on 26April, 2006, the Board decided to appoint Sven Ohlsson(Chairman), Bengt Kjell and Jan Svensson as members ofthe Audit Committee for the period until the next statutoryBoard meeting. The Audit Committee is charged with preparingissues regarding the procurement of auditing servicesand audit fees, following up the auditors’ work and internalcontrol systems, monitoring the current risk situation withrespect to financial reporting, following up external auditsand the Company’s financial information and handling otherissues assigned by the Board of Directors.The Audit Committee’s work is regulated by specialinstructions adopted by the Board of Directors as part of itsWork Procedures. During 2006, the Audit Committee heldfive meetings at which all members were in attendance.On one occasion during 2006, the Board of Directorsmet with the auditors and reviewed their reports without thePresident and other members of Company management beingpresent. The auditors’ report did not motivate any specialmeasures on the part of the Board of Directors.M U N T E R S A N N U A L R E P O R T 2 0 0 6 35