Annual Report 2006 - Munters

Corporate Governance ReportMunters AB (publ) applies the applicable rules contained in theSwedish Code of Corporate Governance (“the Code”). Inaccordance therewith, the Company has prepared this corporategovernance report.Division of responsibilityResponsibility for management and control of the Group isdivided among the shareholders at the Annual General Meeting,the Board of Directors and its appointed committees andthe President, in accordance with the Swedish Companies Act,other legislation and regulations, prevailing rules for exchangelistedcompanies, the Company’s Articles of Association andthe Board of Directors’ internal control instruments.ShareholdersAt 31 December 2006, the Company had 5,267 shareholders.The proportion of the share capital owned by Swedish institutionsamounted to 47 percent. Foreign investors owned 28percent of the share capital. The ten largest owners togetherhad holdings corresponding to 60 percent of the share capital.For further information on ownership at 31 December 2006,see page 32 of the Annual Report.Annual General Meeting 2006The Annual General Meeting is the Group’s highest governingbody. The Annual General Meeting is normally held in April inStockholm. The 2006 Annual General Meeting was held on 26April 2006. Sven Unger was elected Chairman of the Meeting.The following decisions were taken:The Annual General Meeting adopted the Parent Companyincome statement and balance sheet, the consolidatedincome statement and balance sheet, decided to dispose ofearnings in accordance with the proposed distribution ofearnings resulting in a dividend of SEK 5.50 per share forthe 2005 fiscal year, and discharged the Board of Directorsand the President from liability.The Annual General Meeting approved decisions in accordancewith the Nominating Committee’s proposal- that the number of members of the Board of Directorselected by the Annual General Meeting shall be sevenand that no deputy members shall be elected;- that fees to the Board of Directors shall be paid in a totalamount of SEK 1,450,000 of which (i) SEK 400,000 tothe Chairman, (ii) SEK 175,000 to each of the Boardmembers elected by the Annual General Meeting who isnot an employee of the Company and (iii) SEK 50,000 tothe Chairman of the Audit Committee and SEK 25,000to each of the other members. It was also noted that the2004 Annual General Meeting decided that fees shall bepaid to the auditors on account;- that Berthold Lindqvist, Anders Ilstam, Bengt Kjell,Eva-Lotta Kraft, Sören Mellstig, Sven Ohlsson and JanSvensson were to be re-elected. It was noted that LennartEvrell declined re-election.The Annual General Meeting decided to appoint aNominating Committee each year that shall consist of theChairman of the Board of Directors and representatives forthe four largest owners in the Company in terms of votingrights, with replacement rules if any of these membersresign from the Committee before its work is completed.In accordance with the Board of Directors’ proposal, theAnnual General Meeting decided to authorize the Board ofDirectors to decide on the acquisition of treasury stock.In accordance with the Board of Directors’ proposal, theAnnual General Meeting decided to issue call optionson repurchased shares and to transfer repurchased shareswhen call options are redeemed.The Annual General Meeting decided to change theArticles of Association to conform with the applicableSwedish Companies Act (2005:551).Nominating CommitteeIn accordance with the 2006 Annual General Meeting, theNominating Committee is to be elected annually throughthe Chairman of the Board contacting the Company’s fourlargest shareholders, in terms of voting rights, who will eachelect a representative to jointly with the Chairman, comprisethe Nominating Committee for the period up until the endof the next Annual General Meeting or, if applicable, until anew Nominating Committee has been elected. If a memberresigns from the Nominating Committee before completionof his/her duties, if applicable, a replacement shall be electedby the same shareholder who elected the resigning member or,if that shareholder is no longer one of the four largest shareholders,by the newest shareholder joining the group. One ofthe owner representatives in the Nominating Committee shallbe its Chairman. The Nominating Committee’s assignment isto prepare and present proposals for the election of the Chairmanand other members of the Board of Directors, Chairmanof the Annual General Meeting, fees and associated matters.Information about the Nominating Committee’s compositionshall be published not less than six months prior to theAnnual General Meeting.Since October 2006, the Nominating Committee includesthe following persons: Carl-Olof By (AB Industrivärden),Gustaf Douglas (Investment AB Latour), Anders Algotsson(AFA Försäkring), and Jan Andersson (Swedbank RoburFunds). The last mentioned person replaced Peter Rudman(Nordea Funds), since Nordea Funds reduced its ownershipin Munters on 19 October 2006. In addition to the above list,Berthold Lindqvist, Chairman of the Board of Munters is alsoincluded. The Nominating Committee will prepare a proposalto the 2007 Annual General Meeting regarding Chairmanof the Annual General Meeting, composition of the Board ofDirectors and Board fees. The Nominating Committee heldthree meetings during 2006. No compensation was paid tothe Nominating Committee.34 M U N T E R S A N N U A L R E P O R T 2 0 0 6