20% - Assa Abloy

Corporate governance report
50
the following companies besides ASSA ABLOY: Bonnier AB
(publ) and Skandinaviska Enskilda Banken AB (publ).
PwC submits the audit report for ASSA ABLOY AB, the
Group and a large majority of the subsidiaries worldwide.
The audit of ASSA ABLOY AB also includes the administration
by the Board of Directors and the CEO.
The company’s auditor attends all the meetings of the
Audit Committee as well as the board meeting in February,
at which he reports his observations and recommendations
concerning the Group audit for the year.
The external audit is carried out in accordance with
good auditing practice in Sweden. The audit of the annual
financial statements for legal entities outside Sweden is
carried out in accordance with legal requirements and
other applicable regulations in the country concerned
and in accordance with good auditing practice as defined
by the International Federation of Accountants (IFAC) for
submitting audit reports for the legal entities. For information
about the fees paid to auditors and other assignments
carried out in the Group during the last three
financial years, see Note 3 of this Report and Note 3 on
page 63 of the Annual Report for 2006.
Deviations from the Swedish Code of
Corporate Governance
ASSA ABLOY has chosen to deviate from the following
clauses of the Swedish Code of Corporate Governance:
Clause 2.1.2 (relevant parts)
“The majority of the members of the nomination committee
are not to be members of the board of directors. The chair of
the board of directors or another board member is not to
chair the nomination committee.”
Explanation for the deviation: Prior to the 2008 Annual
General Meeting, the Nomination Committee comprises
four members, two of whom are board members. Half of
the Committee’s members, but not a majority, are thus
not board members. The departure from this clause of the
Code is the result of, on the one hand, the wish to limit
the number of members of the Committee in order not to
jeopardize the effectiveness of the Committee’s nomination
work and, on the other hand, the representation of
the principal shareholders on the Committee. A majority
of external members would have required five members,
which was deemed to be too many. The Chairman of the
Nomination Committee prior to the 2008 Annual General
Meeting is Melker Schörling, who is also a member of
ASSA ABLOY’s Board. The departure from this clause of
the Code is justified by the fact that one of the largest
shareholders in terms of votes naturally also leads the
work of the Committee.
Clause 3.2.4 (relevant parts)
“The majority of the directors elected by the shareholders’
meeting are to be independent of the company and its management.”
Explanation for the deviation: This clause is not complied
with on account of the so-called 12-year rule, which states
that a director is not deemed to be independent if he has
been a board member of the company for more than 12
years. Four board members out of a total of eight board
members are dependent on the company, as defined
by the Code. For three of these, this dependence only
arises on account of the 12-year rule. The Nomination
Committee does not consider that in a company such
as ASSA ABLOY dependence arises as a result of a board
member working with and getting to know the company
over a longer period.