Annual Report 2005 (6 MB) - Lundin Petroleum

BOARD OF DIRECTORS
The Annual General Meeting (AGM) elects the Board members
for a period of one year. Board members are nominated in
accordance with the nomination process adopted by the AGM
in 2005 (see below). The composition of the Board of Directors is
decided through a vote of the shareholders during the AGM after
recommendation from the Nomination Committee.
NOMINATION PROCESS
Election to the Board
The 2005 AGM decided upon the Nomination Process which
would take place in 2006, requiring the creation of an external
Nomination Committee. This Nomination Committee was formed
in 2005 and consists of a total of fi ve members, representing
four of the largest shareholders, i.e Magnus Bakke, of Robur
Fonder, Ossian Ekdahl, of Första AP-fonden , Björn Lind, of SEB
Trygg-Liv, Ian H. Lundin (of Landor Participation Inc. and Lorito
Holdings Ltd, also Chairman of Lundin Petroleum) and Magnus
Unger (non-executive Board member) who acts as Chairman of
the committee. Magnus Unger was unanimously selected as the
chairman as it was felt that he had the best knowledge both of
the Company and Swedish requirements and thus could best
represent the shareholders’ interests. The names of the members
of the Nomination Committee were announced and posted on the
website as soon as the representatives had been appointed.
In furtherance of the Nomination Committee’s responsibility
to propose members of the Board to the AGM, the Chairman
undertook on its behalf a systematic evaluation of the work of the
Board and its members through the preparation of a questionnaire
and presented the results and conclusions to the Nomination
Committee. In addition to the functions described above the
Nomination Committee makes recommendations to the AGM
regarding fees for the Chairman and Board members and for
Board committee work, audit fees and election of the Chairman to
the AGM. No remuneration was paid to either the Chairman or any
of the members for their work on the Nomination Committee.
Election of auditors
The audit fi rm PricewaterhouseCoopers AB, Sweden, was
appointed by the 2005 AGM as auditors for the period up until
2008. As part of the function of the Nomination Committee
auditors are recommended for nomination.
THE BOARD OF DIRECTORS
The composition and the functions of the Board of Lundin
Petroleum are described below. The Board adheres to a set of
rules and procedures, the Rules of Procedure, which are updated
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on a regular basis to take into account changes in legislation
as well as the structure and orientation of the Company.
The Rules were revised on 15 August 2005, to make them conform
to the terms of the Swedish Code of Corporate Governance. Major
changes were in the reduction in the number of Board Committees
and the external Nomination Committee replacing the prior
Governance and Nomination Committee.
Composition of the Board
According to the Articles of Association the board shall consist of
a minimum of three and a maximum of ten directors. Nine Board
members were elected at the AGM on 19 May 2005, including a new
member, Viveca Ax:son Johnson. At the statutory Board meeting,
Ian H. Lundin was appointed Chairman. No deputy directors have
been appointed and the CEO is a member of the Board. There are
no members appointed by employee organisations.
As a matter of policy, there is a majority of independent directors
on the Board. The criteria to establish whether a director is
“independent” are those listed under Article 3.2.4 of the Swedish
Code of Governance and the listing requirements of the Stockholm
Stock Exchange.
The Chairman of the Board of Directors is not employed by
the Company and does not receive any salary nor is he eligible
for participation in the Company’s incentive programme. The
Chairman of the Board of Directors up-holds the reporting
instructions for the Company management as drawn up by the
Managing Director and approved by the Board of Directors and
does not take part in the day-to-day decision-making concerning
the business operations of the Company.
REMUNERATION OF BOARD MEMBERS
Remuneration of the Chairman of the Board and Board members is
in accordance with the resolution adopted by the Annual General
Meeting. The remuneration of the Board of Directors is stated in
the Annual Report’s note to fi nancial statements (see Note 38,
Remuneration to Board of Directors and Management).
Rules of Procedures for the Board
The Rules of Procedure are adopted annually and reviewed when
necessary. In order to be in full conformity with the Code of
Corporate Governance, the Rules of Procedure were thoroughly
reviewed and revised by the Board on 15 August 2005.
The Rules of Procedure set out the details of how the Board is
to conduct its work, including the number of Board meetings,
Audit
Compensation Independent of
Name Function Elected Committee Committee Company
Carl Bildt Director 2001 Yes
Viveca Ax:son Johnson Director 2005 Yes
C. Ashley Heppenstall President & CEO 2001 No
Kai Hietarinta Director 2001 Yes Yes
Adolf H. Lundin Honorary Chairman 2001 No
Ian H. Lundin Chairman 2001 Yes No
Lukas H. Lundin Director 2001 Yes Yes*
William Rand Director 2001 Yes Yes Yes
Magnus Unger Director 2001 Yes Yes Yes
* No professional ties to Lundin Petroleum but linked to dominant shareholder by family ties.