Corporate Governance

The purpose of corporate governance is to create a clear division of roles and responsibility among owners, Board of Directors and executive management. Corporate governance covers the Group’s governing and management systems. Corporate governance at Entraction is based on current legislation, the rules and regulations of the Stockholm Stock Exchange and internal guidelines.

Swedish Code of Corporate Governance

During 2004, a Swedish code was drawn up for corporate governance. This follows the principle “comply or explain.” According to the rules of the Stockholm Stock Exchange, Entraction is not covered by the Swedish Code of Corporate Governance. The Board of Entraction has decided that the company will not comply with the code but will instead apply – as far as possible – the provisions and guidelines in the code. This means that the company has commenced a voluntary adjustment to some of the code’s provisions and has established a Nomination Committee, an audit committee and a remuneration committee.

Annual General Meeting

According to the Swedish companies Act, the Annual General Meeting is the ultimate decision-making body through which shareholders exercise their voting rights. The Annual General Meeting makes decisions regarding the annual report, dividend, election of the Board and auditors, remuneration to Board members and auditors, as well as other matters in accordance with the Swedish companies Act and Articles of Association.

Nomination Committee

At the AGM 2007, it was decided to establish a Nomination Committee for the preparation and submission of proposals for shareholders in the company in respect of the Chairman of the Meeting, Board of Directors, Chairman of the Board and, whenever applicable, auditors, as well as to make decisions in respect of Board fees, and their division between the Chairman and other Board members, along with remuneration for committee work and fees to auditors.

The Meeting decided that the Nomination Committee should consist of representatives of the four largest shareholders and the Board Chairman. The Board Chairman should be the convener of the Nomination Committee. The Nomination Committee’s composition is communicated in interim reports for the third quarter.

For the AGM of 2008, the Nomination Committee consists of Börje Fors, Per Hildebrand, Niklas Borg, Linda Hildebrand and Linda Edengren.

Board of Directors and CEO

The Board of Directors is responsible for the company’s organization and management of the company’s business. The Board shall continually assess the company’s and Group’s financial situation. The Board shall ensure that the company’s organization is configured to ensure the satisfactory control of bookkeeping, administration of funds and the company’s overall financial situation. The CEO shall manage day-to-day operations in line with the Board’s guidelines and instructions. The division of work between
the Board and the President shall be set through written instructions.

Audit Committee

The Audit Committee is appointed annually by the Board at the constituent Board meeting and shall consist of three Board members. The goal of Audit Committee’s work is to ensure that financial reporting is reliable, under control and is of a high quality.

Remuneration Committee

The Remuneration Committee is appointed annually at the constituent Board meeting and shall be made up of at least two Board members. The goal for the work of the Remuneration Committee is to prepare for and present to the Board issues involving principles, forms and conditions for remuneration of the President, senior executives and, in appropriate cases, other employees entitled to remuneration at Entraction