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Corporate governance report
APPLICATION OF THE SWEDISH CODE OF
CORPORATE GOVERNANCE
This corporate governance report has been prepared in accordance with the rules
in Chapter 5 of the Swedish Code of Corporate Governance (“the Code”) in order
to describe how the Company has applied the Code since it has entered into
force during the period covered by the annual report. This corporate governance
report does not constitute part of the formal annual report and has not been
reviewed by the Company’s auditor.
Corporate governance at Intrum Justitia comprises structures and processes
for management and control of the Company’s operations for the purpose
of creating value for the Company’s owners and other stakeholders.
As of July 1, 2005 Intrum Justitia applies the Code, which, in accordance with
an agreement between Aktiemarknadsbolagens förening (Association of Stock
Market Companies) and Stockholmsbörsen (the Stockholm Exchange), has been
incorporated in Stockholmsbörsen’s revised regulations. Furthermore, Intrum
Justitia’s corporate governance complies with the applicable rules in the Swedish
Companies Act, Stockholmsbörsen’s listing agreement, the rules of Näringslivets
Börskommitté (Swedish Industry and Commerce Stock Exchange Committee),
the decisions of Aktiemarknadsnämnden (Swedish Securities Council) and the
articles of association of Intrum Justitia.
Since the Code entered into force, the Company has not deviated from its
provisions, with the exception of paragraph 2.1.3, as the Nomination Committee’s
complete composition was announced slightly later than six months prior to the
Annual General Meeting 2006 due to the delay in the nomination of the last
member until November 1, 2005. See also under the heading Nomination
Committee.
CONTENTS OF THIS CORPORATE
GOVERNANCE REPORT
The purpose of this report is to provide an overview of relevant information on
corporate governance issues, including:
– Description of the Nomination Committee’s work
– Information on the members of the Board of Directors
– Description of the Board’s work
– Description of the committees’ work
– Information on the Company’s auditor
– Information on the President and CEO
– Compensation to the senior management, and
– Incentive programs.
This report also includes a brief account of how the Board ensures the quality
of fi nancial reporting and communicates with Company’s auditor. Questions on
internal control are addressed in further detail in the Board’s report on internal
control, which can be found on page 70 in this annual report.
NOMINATION COMMITTEE
The Annual General Meeting on April 27, 2005 instructed the Chairman of the
Board to contact the fi ve largest shareholders in the Company at the conclusion of
the third quarter to request that each appoint one representative to serve on a
Nomination Committee. The purpose of the committee is to nominate Board
Born Nationality Elected
Nomination
Committee
members for election at the upcoming Annual General Meeting. Accordingly,
representatives of these fi ve shareholders were summoned to form a Nomination
Committee that, at the time of its formation and on December 31, 2005, represented
a total of 42.7 percent of the share capital in Intrum Justitia. The composition of the
Nomination Committee was announced as soon as the shareholders in question
had appointed their representatives. This took place on October 24, 2005, i.e.,
six months prior to the Annual General Meeting 2006, at which time the names of
the four representatives who had been appointed were announced. Information on
the fi nal member and the complete composition of the Nomination Committee were
announced as soon as the fi nal member was appointed on November 1, 2005.
For the Annual General Meeting in 2006, the Nomination Committee consists
of Christer Gardell (Chairman of the Nomination Committee representing Cevian
Capital), Ársæll Hafsteinsson (Landsbanki Íslands), Björn Fröling (Parkerhouse
Investments), Göran Espelund (Lannebo Funds) and Adam Gerge (Didner & Gerge
Funds). Moreover, Björn Lind (SEB Funds and SEB Trygg Liv) has served as a
co-opted member of the Nomination Committee. Including SEB Funds and SEB
Trygg Liv, the Nomination Committee represented 49.2 percent of the share
capital and votes in the Company as of December 31, 2005. The Secretary of
the Board has served as the co-opted Secretary of the Nomination Committee.
Besides nominating Board members and proposing who to elect as Chairman
of the Board, the task of the Nomination Committee is inter alia to evaluate
the Board and its work, propose compensation for the Board and, when necessary,
propose candidates for auditors’ elections and compensation for auditors.
After its appointment, the Nomination Committee met on two occasions during
the autumn of 2005 and twice in January 2006. All members were present at
these meetings, with the exception of the last meeting in January, when one
member was absent.
The Chairman of the Board has conducted an evaluation of the Board and the
work of individual members during the year. This evaluation has since been reported
to the Nomination Committee, together with an assessment of the needs for
special competence on the Board and an analysis of available resources.
Shareholders have been provided the opportunity to submit proposals to
the Nomination Committee. No such proposals have been submitted within the
applicable deadline. The Nomination Committee’s proposal for the Chairman and
other Board members as well as its proposal for Board fees and compensation
for committee work is presented in the notice to the Annual General Meeting
2006. The proposals will then be presented to the Annual General Meeting for
resolution.
No compensation has been paid to the Chairman of the Nomination
Committee or to any other member of the committee for their work.
COMPOSITION OF THE BOARD
According to Intrum Justitia’s articles of association, the Board shall consist of
at least fi ve and no more than nine members with no more than four deputies.
All members are elected by the Annual General Meeting.
The Annual General Meeting on April 27, 2005 elected eight Board members
with no deputies. Due to ownership changes, two members resigned (Gerard De
Geer and Christian Salamon) and one new member was elected (Sigurjón Th.
Árnason) at an Extraordinary General Meeting on November 24, 2005. Since the
Extraordinary General Meeting, the Company’s Board thus consists of seven
members without deputies.
THE BOARD OF DIRECTORS FOLLOWING THE EXTRAORDINARY GENERAL MEETING ON NOVEMBER 24, 2005
Audit
Committee
Compensation
Committee
Independence
1 Shares 2 Options
Bo Ingemarson Chairman 1950 Sweden 2002 Member Chairman yes 15,585 no
Björn Fröling Deputy Chairman 1957 Sweden 2002 Member Chairman no 20,000 no
Sigurjón Th. Árnason 1966 Iceland 2005 no – no
Helen Fasth-Gillstedt 1962 Sweden 2005 Member yes – no
Lars Förberg 1965 Sweden 2004 Member no – no
Leif Palmdahl 1941 Sweden 2005 yes – no
Jim Richards 1952 USA 2004 yes – no
1 In relation to principal shareholders. All members are independent in relation to the Company and senior management.
2 Information on holdings of shares in Intrum Justitia AB include shares owned through companies and related parties and are updated as of December 31, 2005.