Corporate Governance Report 2022
CORPORATE GOVERNANCE REPORT
This Corporate Governance Report has been prepared as an independent document in relation to the Annual Report. Information in accordance with Chapter 6, Section 6 of the Annual Accounts Act, Paragraphs 3-6, can be found in the Board of Directorʼs Reportʼs sections on share-related information and corporate governance in the Annual Report.
Operations and governance of
Shareholders exercise their decision-making rights at the Annual General Meeting (as well as at possible extraordinary meetings), which is the Companyʼs high-est decision-making authority. The Board of Directors and the Chairman of the Board of Directors are appointed by the Annual General Meeting while the President is appointed by the Board of Directors. The Companyʼs accounts as well as the administration of the Board of Directors and the President are re-viewed by auditors appointed by the Annual General Meeting. The Annual General Meeting adopts principles for the appointment of the Nomination Committee, which formulates proposals to the Annual General Meeting prior to the election and setting of fees for the Board of Directors and auditors. In addi-tion to laws, regulations and the Code,
Shareholders
Ownership and share capital
On
Annual General Meeting
The Annual General Meeting considers resolutions regarding: dividends, adoption of the Income Statement and Balance Sheet, discharge of liability for Board members and the President, election of Board members, the Chairman of the Board of Directors and auditors, approval of fees to the Board members and au-ditors, adoption of executive remuneration guidelines, and, when applicable, adoption of principles for appointing the Nomination Committee. At the Annual General Meeting, shareholders have the opportunity to ask questions about the Company. All Board members, management and the auditors are normally present at the meeting to answer such questions.
The 2022 Annual General Meeting was held on
in accordance with the proposal by the Board of Directors, to pay a dividend of
to authorize the Board of Directors, on one or several occasions and not later than the 2023 Annual General Meeting, to make decisions regarding the transfer of treasury shares for the purpose of financing smaller corporate acquisitions.
Annual General Meeting 2023
BE Groupʼs Annual General Meeting will take place on
Nomination Committee
As resolved by the Annual General Meeting, the Nomination Committee must consist of four members, who, in addition to the Chairman of the Board of Directors, shall include representatives for each of the three largest shareholders in the Company in terms of voting rights, as of
The Nomination Committee is tasked with: submitting to the Annual General Meeting its nominations for Chairman of the Board of Directors and other Board members accompanied by a justified statement regarding the proposal, proposing fees for the Board of Directors and the auditors and any remuneration for committee work, proposing auditors and nominating an individual to serve as the chairman of the Annual General Meeting. The Nomination Committee is also charged with assessing the independence of Board members in relation to the Company and major shareholders.
When preparing its proposal for the Board of Directors before the Annual General Meeting 2022 and 2023, the Nomination Committee applied the following di-versity policy. As a whole, the Board of Directors must have an appropriate combined competence and experience for the activities that are conducted to be able to identify and understand the risks that the business entails. The Nomination Committee strives to achieve diversity on the Board. The objective of the di-versity policy is that the Board of Directors shall consist of members with varying industry experience, competence, geographical background and with a vary-ing educational and professional background, which together contribute to an independent and critical questioning of the Board, and an even gender distribu-tion shall be sought. The Annual General Meeting 2022 decided to appoint Board members in accordance with the Nomination Committeeʼs proposal, which means that five members were elected, of which one woman and four men. As far as the Nomination Committeeʼs ambitions of a more even gender distribu-tion are concerned, it has not been possible to achieve this, but the Nomination Committeeʼs continued ambition is to create a more even gender distribution on the Board. As a basis for its proposals to the 2023 Annual General Meeting, the Nomination Committee assessed whether the Board of Directors has a suit-able composition and meets the requirements on the Board of Directors imposed by the Companyʼs operations, position and conditions in other regards. The assessment was based on material including relevant sections of the evaluation of the Boardʼs work performed under the Chairmanʼs guidance.
The Board of Directors and its work
Composition
Under the Articles of Association, the Board of Directors of
Rules of procedure of the Board of Directors
The Board of Directors is appointed by BE Groupʼs shareholders to have ultimate responsibility for the Groupʼs organization and administration of the Groupʼs interests. At the statutory Board of Directors meeting directly following the Annual General Meeting, the Board of Directors adopted rules of procedure that closely regulates its work and responsibility as well as the special work tasks that are the responsibility of the Chairman of the Board. The Chairman of the Board, Jörgen Zahlin, leads the Boardʼs work and monitors the operation through a continuous dialogue with the President. Through monthly reports and Board meetings, the Board of Directors obtains information about BE Groupʼs economic and financial status. Prior to every Board meeting, the Chairman and the President review those issues that shall be addressed at the meeting. Documentation for the Boardʼs handling of the issues is sent to the Board members approximately one week before every Board of Directors meeting. The Board of Directors has also established sets of instructions for the President and for fi-nancial reporting to the Board of Directors and has adopted other special policies.
The Board has an Audit Committee and a Renumeration Committee. The members of the committees are appointed annually by the Board of Directors at its statutory meeting following its election by the Annual General Meeting. Instructions to the Committees are included in the rules of procedure of the Board of Directors.
Work of the Board of Directors in 2022
During 2022, the Board of Directors held 11 meetings, of which one per capsulam. According to the rules of procedure, the Board of Directors shall meet on five occasions per year, in addition to its statutory meeting. Additional meetings shall be held as necessary. One of the meetings during the year is regularly held at one of BE Groupʼs operative units. The table provides a report of attendance by Board members at the six meetings prior to the Annual General Meeting and the five meetings after the Annual General Meeting. As shown, attendance at Board meetings during the year was excellent.
The Board of Directors, attendance 2022
ElectedAtten-dance
Committee workAtten-danceBoard-fees
Fee audit-committee
Independent of company & companies managementIndependent of larger owners
Jörgen Zahlin, chairman
2013
11 of 11
1 of 1
2 of 2
446,667
40,000
Yes
YesPetter Stillström
2012
11 of 11
1 of 1
2 of 2
2018
6 of 11
223,333 70,000
40,000
Yes YesNo Yes
2006
11 of 11
Audit Committee
2 of 2
2020
11 of 11
2022
5 of 11
223,333 223,333 153,333
76,667
Yes Yes YesYes Yes Yes
2022
5 of 11
-
1)
Carina Andersson withdrew as board member in connection with the Annual General Meeting inApril 2022 -
2)Monika Gutén became board member in connection with the Annual General Meeting in
April 2022 -
3)Ida Strömberg became board member in
April 2022
Evaluation of the Board of Directorsʼ work
The Chairman ensures that the Board of Directors and its work are evaluated annually and that the result of the evaluation is passed on to the Nomination Committee. The evaluation is made by the Board of Directors itself using a questionnaire where their work within a number of areas are judged. The Chairman of the Board summarizes the evaluation used as the base for a discussion within the Board of Directors regarding the development of the Board of Directorsʼ work. The purpose is to examine how the Board of Directors´ work can be more efficient and to clarify potential need of additional skills in the Board of Directors.
Audit Committee
The Audit Committee prepares a number of questions for the Board of Directorsʼ decision and supports the Board of Directors in its work to carry out its re-sponsibility within the areas auditing and internal control, as well as to quality-assure BE Groupʼs financial reporting. Internal control regarding the financial re-porting aims to provide reasonable security regarding the reliability of the external financial reporting in the form of annual reports and interim reports that are published each year and that the financial reporting is prepared in accordance with the law, applicable accounting standards and other requirements for listed companies. Internal control also aims to ensure high quality in the financial reporting to group management and the board so that decisions are made on the right grounds and that established principles and guidelines are followed.
Each year, the Companyʼs auditors formulate a proposed audit policy and present this to the Audit Committee. Once the proposal has been reviewed and com-mented on by the Committee, a final proposal is submitted for approval by the Board of Directors. The work is focused on assuring the quality and accuracy of financial accounting and reporting, internal financial control efforts, as well as the Groupʼs compliance with applicable regulations. In addition, the Audit Committee has recurring contact with the Companyʼs auditor with the purpose of generating an ongoing exchange of information and to assess the auditorʼs efforts. The Committee may establish guidelines concerning what services, other than auditing services, which
The Audit Committee consists of
The Audit Committee met two times in 2022. Meetings of the Audit Committee are minuted and reported orally at Board meetings.
Remuneration Committee
The tasks of the Remuneration Committee include preparing the Boardʼs decisions regarding proposed guidelines for the remuneration of senior executives. The current guidelines are published on BE Groupʼs website. The Board shall prepare proposals of new guidelines at least once every four years and present the proposal for resolution at the Annual General Meeting. The guidelines are to apply until new guidelines have been adopted by the Annual General Meeting. For each financial year, the Board of Directors shall prepare a report on paid and deferred remuneration that is covered by the remuneration guidelines. The report is submitted to the Annual General Meeting for approval and will be made available on the
The Remuneration Committee shall also follow and evaluate programs for variable remuneration of Company management, the application of guidelines for the remuneration of senior executives and applicable remuneration structures and remuneration levels in the Company. The Remuneration Committeeʼs members are independent in relation to the Company and executive management. In the Boardʼs handling of and decisions on remuneration-related issues, the President or other members of Company management do not attend if they are concerned by the issues.
Members of the Remuneration Committee are the Chairman of the Board Jörgen Zahlin and Petter Stillström. The work of the Committee is regulated by a spe-cial set of instructions adopted by the Board of Directors as part of its agenda. The meetings of the Remuneration Committee are reported orally to the Board of Directors.
Board remuneration
The fees for the Board members elected by the Annual General Meeting are determined by the Annual General Meeting on the basis of the Nomination Committeeʼs proposal. Employee representatives to the Board of Directors do not receive Board membersʼ fees. In accordance with a resolution by the 2022 Annual General Meeting, a fee of
Group management
Group management of
Remuneration principles for senior executives
The annual general meeting 2020 resolved on the guidelines for executive remuneration. The individuals who are members of the group management of
The guidelinesʼ promotion of BE Groupʼs business strategy, long-term interests and sustainability
Types of remuneration, etc.
The remuneration shall be on market terms and may consist of the following components: fixed cash salary, variable cash remuneration, pension benefits and other benefits. Additionally, the general meeting may - irrespective of these guidelines - resolve on, among other things, share-related or share price-related remuneration.
Fixed cash salary
The fixed cash salary for the senior executives within
Variable cash remuneration
The variable cash remuneration shall be based on predetermined, well-defined and measurable financial criteria for the group and the relevant business area and may amount to not more than fifty (50) percent of the total fixed cash salary during the measurement period for the criteria. The criteria for variable cash remuneration shall mainly relate to the groupʼs and the business areaʼs respective underlying operating result and, in addition, individual criteria may be estab-lished. The criteria shall be designed so as to contribute to BE Groupʼs business strategy and long-term interests, including its sustainability, by for example be-ing linked to the business strategy or promoting the senior executiveʼs long-term development within
Pension benefits
For the CEO and other senior executives, pension benefits shall be premium defined. Variable cash remuneration shall not qualify for pension benefits. The pension premiums for premium defined pension shall amount to not more than 30 percent of the fixed annual cash salary.
Other benefits
Other benefits may include, for example, life insurance, health and medical insurance, company cars and housing allowance. Such benefits may amount to not more than 10 percent of the fixed annual cash salary.
Foreign employments
For employments governed by rules other than Swedish, pension benefits and other benefits may be duly adjusted for compliance with mandatory rules or es-tablished local practice, taking into account, to the extent possible, the overall purpose of these guidelines.
Criteria for awarding variable cash remuneration, etc.
The remuneration committee shall prepare, monitor and evaluate matters regarding variable cash remuneration. After the measurement period for the criteria for awarding variable cash remuneration has ended, it shall be determined to which extent the criteria have been satisfied. Evaluations regarding fulfilment of financial criteria shall be based on established financial information for the relevant period. Remuneration to the CEO shall be resolved by the Board of Directors. Remuneration to other senior executives shall be resolved by the CEO, after consulting the remuneration committee.
Variable cash remuneration can be paid after the measurement period has ended or be subject to deferred payment. The Board of Directors shall have the pos-sibility, under applicable law or contractual provisions, to in whole or in part reclaim variable remuneration paid on incorrect grounds (claw-back).
Employment term and termination of employment
The notice period may not exceed twelve months if notice of termination of employment is made by the company. Fixed cash salary during the period of notice and severance pay may together not exceed an amount equivalent to the fixed cash salary for twelve months for the CEO and other senior executives. The peri-od of notice may not exceed six months without any right to severance pay when termination is made by the executive.
Salary and employment conditions for employees
In the preparation of the Board of Directorsʼ proposal for these remuneration guidelines, salary and employment conditions for employees of the company have been taken into account by including information on the employeesʼ total income, the components of the remuneration and increase and growth rate over time, in the remuneration committeeʼs and the Board of Directorsʼ basis of decision when evaluating whether the guidelines and the limitations set out herein are reasonable.
The decision making process to determine, review and implement the guidelines
The Board of Directors has established a remuneration committee. The committeeʼs tasks include preparing the Board of Directorsʼ decision to propose guide-lines for executive remuneration. The Board of Directors shall prepare a proposal for new guidelines at least every fourth year and submit it to the general meeting. The guidelines shall be in force until new guidelines are adopted by the general meeting. The remuneration committee shall also monitor and evalu-ate programs for variable remuneration for the executive management, the application of the guidelines for executive remuneration as well as the current re-muneration structures and compensation levels in the company. The members of the remuneration committee are independent of the company and its execu-tive management. The CEO and other members of the executive management do not participate in the Board of Directorsʼ processing of and resolutions re-garding remuneration-related matters in so far as they are affected by such matters.
Derogation from the guidelines
The Board of Directors may temporarily resolve to derogate from the guidelines, in whole or in part, if in a specific case there is special cause for the derogation and a derogation is necessary to serve the companyʼs long-term interests, including its sustainability, or to ensure the companyʼs financial viability. As set out above, the remuneration committeeʼs tasks include preparing the Board of Directorsʼ resolutions in remuneration-related matters. This includes any resolu-tions to derogate from the guidelines.
Provisions of the Articles of Association on appointment and discharge of directors and amendment of the Articles of Association
There are no provisions in the Articles of Association on appointment and discharge of directors and amendment of the Articles of Association. In accordance with the provisions in the Companies Act, directors are elected by the Annual General Meeting for the period extending until the close of the first Annual General Meeting after that at which they were elected, and amendments to the Articles of Association are determined by the Annual General Meeting in accor-dance with the regulations set out in the Companies Act.
Auditors
At the 2022 Annual General Meeting, the auditing firm Öhrlings
Board of Directorsʼ report regarding internal control
The purpose of internal control of financial reporting is to provide reasonable assurance regarding quality and reliability in the external financial reporting and to ensure that the reports are prepared in accordance with accepted accounting standards, applicable laws and provisions and other requirements for listed companies. To ensure this, the Company had the COSO (
Internal control function
The Board of Directors and the Audit Committee follow up BE Groupʼs assessment of internal control by means including discussions with BE Groupʼs auditors. Given the above, the Board of Directors has elected not to maintain a separate internal audit unit. To test the internal control environment, a self-assessment is conducted, among other efforts, based on a Group-wide control framework. The Groupʼs CFO reports the results of the test done of the internal control to the Audit Committee. BE Groupʼs internal control of financial reporting covers five main areas: establishment of a control environment, risk assessment, control ac-tivities, information and communications and follow-up.
Control environment
The company has applied a whistleblower policy, which means that all employees have the possibility to anonymously report if they discover improprieties or illegal actions that affect vital interests for
Risk assessment
The risk assessment is based on a risk review that is updated annually and reported to the Audit Committee. Based on the results of this review, focus is set for the internal control work in the future.
Control activities
The risks identified with regard to financial reporting are managed through the Companyʼs control activities, such as authorization controls in IT systems and signature authentication. Detailed economic analysis of business performance including follow-up against business plans and forecasts supplements opera-tions-specific controls and provides an overall assessment of reporting quality.
Information and communication
The Group maintains channels of information and communication that serve to safeguard completeness and accuracy in financial reporting. Policies, manuals and job descriptions are available on the company intranet and/or in printed form. Information, both external and internal, is governed by an information poli-cy and an insider policy with guidelines. Responsibilities, routines and rules are dealt with here. These are continuously evaluated to ensure that information to the stock market is of high quality and in accordance with current stock exchange rules. Financial information such as interim reports, annual reports and sig-nificant events are published through press releases and on the website. Internally, the intranet is the main source of information. Accounting manuals and in-structions for financial reporting are available on the intranet.
Sustainability report
Follow-up
The Board and the Audit Committee review all external financial reports before they are formally approved by the Board. The Audit Committee receives ongo-ing reports from the auditors on internal control and follows up on significant issues. The Board receives a monthly written report dealing with sales, operating results, market development and other essential information about the business and also has a review of current financial reports as a standing item at all meetings. Group management analyzes the financial development within the Groupʼs business areas on a monthly basis. In general, at all levels in the organi-zation, ongoing follow-up takes place through comparisons with the previous year, budget and plans as well as through evaluation of key figures.
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