Review of 2010 â USD version - Skanska

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Johan Karlström, Stuart Graham, Sir Adrian Montague, Matti Sundberg and Inge Johansson. During 2010, the committee held twelve meetings. Evaluation of the work of the Board The work of the Board is evaluated yearly through a systematic and structured process, among other things aimed at gathering good supporting documentation for improvements in the Board’s own work. The evaluation provides the Chairman of the Board with information about how the members of the Board perceive the effectiveness and collective competence of the Board as well as the need for changes in the Board. When evaluating the work of the Chairman, the Board is led by a specially designated member. The Chairman of the Board and the specially designated member inform the Nomination Committee of the results of these evaluations. Fees to the Board of Directors Total fees to the Board members elected by the Shareholders’ Meeting were approved by the 2010 Annual Shareholders’ Meeting in the amount of SEK 4,500,000. The Chairman of the Board received SEK 1,350,000 (corresponding to USD 187,297) in fees and other Board members SEK 450,000 each (corresponding to USD 62,432). This represented unchanged fees compared to 2009. In addition, in accordance with the decision of the Shareholders’ Meeting, members elected by the Shareholders’ Meeting and serving on the Board’s committees each received SEK 75,000 (corresponding to USD 10,405) for their work on the Compensation Committee, SEK 150,000 (corresponding to USD 20,811) for their work on the Project Review Committee and SEK 100,000 (corresponding to USD 13,874) per member of the Audit Committee and SEK 125,000 (corresponding to USD 17,342) to its Chairman. This also represented unchanged levels of compensation compared to 2009. For a further account, see Note 37, “Remuneration to senior executives and Board members.” Attendance at meetings and remuneration to the Board Compensation Committee Project Review Committee Audit Board member Board Committee Number of meetings 11 7 3 12 Sverker Martin-Löf 11 7 3 12 Stuart E. Graham 11 6 2 8 Finn Johnsson 10 Johan Karlström 11 12 Bengt Kjell 1 0 1 Sir Adrian Montague 11 10 Lars Pettersson 10 2 Josephine Rydberg-Dumont 2 8 Charlotte Strömberg 2 9 5 Matti Sundberg 11 12 Richard Hörstedt 11 Inge Johansson 11 12 Jessica Karlsson 11 Roger Karlström 11 Ann-Christin Kutzner 11 Alf Svensson 10 1 Until April 13, 2010 2 From April 13, 2010 The Board’s communication with the Company’s auditors As mentioned above, the Company’s external auditors participate in all meetings of the Audit Committee. According to the Procedural Rules, the Board of Directors meets with the auditors twice a year. On these occasions, the auditors orally present the findings of their auditing work. At least once per year, the Board meets the auditors without senior executives being present. Operational management and internal control The President and CEO and the Senior Executive Team The President and Chief Executive Officer (CEO) is responsible for day-today management and oversight of the Group’s operations. The work of the President and CEO is specially evaluated at one Board meeting each year at which no senior executives are present. The President and CEO and the seven Executive Vice Presidents plus the Senior Vice President, Human Resources form the Senior Executive Team (SET). The Company’s Procedural Rules stipulate that if the President and CEO cannot fulfill his duties, these duties devolve upon the Chief Financial Officer (CFO), or in his or her absence the Executive Vice President with the longest period of service in this position. For information on the President and CEO and the Senior Executive Team, see page 162. The President and CEO has no business dealings of any significance with Skanska AB or its Group companies. He owns no shares in companies that have significant business dealings with companies in the Skanska Group. Group staff units and support unit At Skanska Group headquarters in Solna, Sweden, there are Group staff units plus the support unit Skanska Financial Services AB. The Group staff units and support unit assist the President and CEO and the Senior Executive Team on matters concerning Groupwide functions, coordination and controls. In addition, they provide support to the business units. The head of each Group staff unit, aside from the head of Internal Audit and Compliance, reports directly to a member of the Senior Executive Team. The head of Internal Audit and Compliance reports to the Board via its Audit Committee. A presentation of the Group staff units and support unit is found on page 163. The business units and their governance The organizational structure of the Skanska Group is characterized by clear decentralization and a large measure of delegation of authority and responsibility to the business units. Each business unit is headed by a President and has its own staff units and other resources in order to conduct its operations effectively. Aside from day-to-day operations of the business units, there are matters related to the strategic development of the units as well as matters concerning their strategic investments and divestments. These items of business are prepared by the management team at each respective unit and are then submitted to the Senior Executive Team or Skanska AB’s Board of Directors for approval, depending on the size of the item of business. The Boards of Directors of the business units consist of representatives of Skanska AB, individuals from other business units as well as of the respective business unit’s own management team. In each business unit, the Chairman of the Board is a member of Skanska’s Senior Executive Team. Where appropriate, employee representatives are included. Each business unit follows a structured, step-by-step risk management process. Depending among other things on the size, type and geographic location of projects, a structured risk management report to the proper decision-making level is required before final decisions are made. Governing documents As part of the governance of Group operations, Skanska AB’s Board of Directors has adopted a number of policy documents. In addition, the Senior Executive Team has adopted more detailed guidelines for the Group. These policies and guidelines are available to all business units on Skanska’s intranet and are updated regularly to reflect changes in operations and new requirements. Among the more important governing documents are the Board’s Procedural Rules and the Group’s Financial Policy, Information Policy, Risk Management Policy and Code of Conduct. The Board’s Procedural Rules state what items of business shall be decided by the Board of Skanska AB, by the President and CEO/Senior Executive Team or at the business unit level. The threshold levels for decisions stated in the Procedural Rules are further broken down in the business units’ own decision-making rules. The business units provide regular, systematic feedback on compliance with the more important governing documents, such as the Financial Policy and the Code of Conduct, to the Senior Executive Team. 78 Report of the Directors Skanska Review of 2010 – USD version
Skanska’s management structure Senior Executive Team Johan Karlström President and CEO Hans Biörck EVP and CFO Tor Krusell EVP Claes Larsson EVP Karin Lepasoon EVP Michael McNally EVP Veronica Rörsgård Human Resources Roman Wieczorek EVP Mats Williamson EVP Skanska Financial Services Skanska Residential Development Nordic Skanska Sweden Communications Skanska USA Building Human Resources Skanska Czech Republic Skanska UK Controlling Information Technology Skanska Norway Investor Relations Skanska USA Civil Skanska Poland Skanska Infrastructure Development Corporate Finance Skanska Finland Skanska Latin America Sustainability and Green Construction Reporting Skanska Commercial Development Nordic Skanska Commercial Development USA Legal Affairs Internal Audit and Compliance Skanska Commercial Development Europe Risk Management Skanska Industrial Production Nordic (SIPN) Business unit Group staff unit/support unit Remuneration to the Senior Executive Team The 2010 Annual Shareholders’ Meeting approved principles for the salaries and other remuneration to senior executives. These principles, as well as the Board’s proposal for new principles to be approved at the 2011 Annual Shareholders’ Meeting, are available on Skanska’s website. Information about salaries and other remuneration to the President and CEO and the other members of the Senior Executive Team as well as share award and share-related incentive programs outstanding are found in a note. The Company’s auditors The 2009 Annual Shareholders’ Meeting selected the accounting firm KPMG AB as auditor of Skanska AB. This assignment runs until the 2013 Annual Shareholders’ Meeting. The auditor in charge is George Pettersson, Authorized Public Accountant. For information on fees and other remuneration to KPMG, see the table below. Fees and other remuneration to the auditors USD M 2010 2009 Audit assignments 7.6 7.1 Tax advisory services 1.7 1.3 Other services 1.5 0.7 Total 10.8 9.0 Other mandatory disclosures in compliance with Chapter 6, Section 6, Annual Accounts Act Due to the requirements in Chapter 6, Section 6 of the Annual Accounts Act concerning certain specific disclosures that must be provided in the corporate governance report, the following is herewith disclosed: • Of the Company’s shareholders, only AB Industrivärden directly or indirectly has a shareholding that represents at least one tenth of the voting power for all shares in the Company. On December 31, 2010, Industrivärden’s holding amounted to 28.4 percent of total voting power. • There are no limitations concerning how many votes each shareholder may cast at a Shareholders’ Meeting. • The Articles of Association prescribe that the appointment of Board members shall occur at the Company’s Annual Shareholders’ Meeting. The Articles of Association do not include any regulations on the dismissal of Board members or on amending the Articles of Association. • The 2010 Annual Shareholders’ Meeting approved a resolution authorizing the Company’s Board of Directors to decide on acquisitions of Skanska’s own Series B shares via a regulated market on the following conditions: A. Acquisitions of Series B shares may only be made on the NASDAQ OMX Stockholm. B. The authorization may be used on one or more occasions, however, not longer than until the 2011 Annual Shareholders’ Meeting. C. A maximum of 4,500,000 Series B shares in Skanska may be acquired for securing delivery of shares to participants in the Skanska Employee Ownership Program. D. Acquisitions of Series B shares in Skanska on the NASDAQ OMX Stockholm may only be made at a price on the NASDAQ OMX Stockholm within the applicable price range at any given time, meaning the interval between the highest purchase price and lowest selling price. Internal control This description has been drafted in compliance with Chapter 6, Section 6, Paragraph 2 of the Annual Accounts Act and includes the most important features of the Company’s internal control and risk management systems in connection with financial reporting. Control environment The Board of Directors’ Procedural Rules and instructions for the President and CEO and the committees of the Board ensure a clear division of roles and responsibilities in order to foster effective management of business risks. The Board has also adopted a number of fundamental rules of Skanska Review of 2010 – USD version Report of the Directors 79
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Review of 2010 - USD version
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The Skanska Group Senior Executive
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United States 28% Business streams:
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Johan Karlström, Skanska’s Presi
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Our new office building projects ar
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Skanska’s core businesses Constru
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Profitable growth 2011-2015 Skanska
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Performance analysis The Group Reve
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Capital structure Capital requireme
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projects during tender preparation
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Green Refurbishment for value-secur
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Evaluating managers To provide a be
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Skanska share price movement, Janua
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Construction 25 Aviation hangar bec
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increase due to stricter energy and
Page 31 and 32: In August, a milestone breakthrough
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Page 39 and 40: Residential Development 37 New home
Page 41 and 42: Stavanger, on the southern coast of
Page 43 and 44: In Ellös on the isle of Orust alon
Page 45 and 46: Ullstorps Gårdar — Country life
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Page 49 and 50: The City Green Court office buildin
Page 51 and 52: Green Lustgården started Poland -
Page 53 and 54: 1 4 5 5 Illustration Tyfonen Illust
Page 55 and 56: Infrastructure Development 55 New K
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Page 65 and 66: Sustainable development 64 Blå Jun
Page 67 and 68: Safety starts with planning Skanska
Page 69 and 70: The Skanska Color Palette TM is now
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Page 73 and 74: Skanska Financials 2010 The financi
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Page 77 and 78: Earnings per share USD 1.6 Investme
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Page 85 and 86: the World Business Council for Sust
Page 87 and 88: Consolidated income statement USD M
Page 89 and 90: Consolidated statement of financial
Page 91 and 92: Consolidated statement of changes i
Page 93 and 94: Consolidated operating cash flow st
Page 95 and 96: Note 01 Consolidated accounting and
Page 97 and 98: Note 01 Continued IFRS 5, “Non-cu
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Page 103 and 104: Infrastructure Development Skanska
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Page 109 and 110: Note 03 Continued Segments, January
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Page 115 and 116: Note 06 Continued earnings and cash
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Note 22 Current-asset properties/Pr
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Note 26 Equity/earnings per share I
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Note 27 Financial liabilities Finan
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Note 28 Continued Actuarial assumpt
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Note 31 Specification of interest-b
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Note 33 Assets pledged Assets pledg
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Note 34 Continued Consolidated stat
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Note 35 Continued Relation between
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Note 37 Remuneration to senior exec
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Note 37 Continued Remuneration and
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Note Business unit Infrastructure D
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Note 42 Consolidated quarterly resu
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Note 43 Continued Statements of fin
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Note 44 Definitions Average capital
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Statement by the President and Chie
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Skanska Review of 2010 - USD versio
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The new environmentally advanced he
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Mike McNally Veronica Rörsgård Ro
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Richard Hörstedt Helsingborg, born
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May - August 2010 5/7/2010 Skanska
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November - December 2010 11/2/2010
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More information about Skanska Worl
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Annual Shareholders’ Meeting Inve
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Review of 2010 â USD version - Skanska