Concordia Maritime is not covered by the Swedish Corporate Governance Code, but the board of directors and management strive, through openness, to make it easier for individual shareholders to follow the company’s decision paths and to clarify where in the organisation responsibility and authority lies.
Annual General Meeting
The Annual General Meeting (AGM) is the highest decision-making body at Concordia Maritime AB. At the AGM, the financial situation is discussed, and decisions are made on a number of important matters, such as the dividend, changes to the Articles of Association, appointment of auditors, decisions on remuneration for the board and the auditors, the granting of discharge of liability to the board, and election of the board for the period until the next AGM.
All shareholders have the same right of proposal and participation at the AGM. Each class A share entitles the shareholder to ten votes, while each class B share entitles the shareholder to one vote.
A summons to the AGM shall be issued no earlier than six weeks and no later than four weeks before the meeting.
Formalities for the AGM are regulated by both the Com panies Act and the Articles of Association.
AGM 2006
The previous AGM was held on 26 April 2006 in Gothenburg, with 104 shareholders present, representing 74.4 per cent of the votes. The meeting re-elected the sitting board members Per Bjurström, Bert Åke Eriksson, Mats Jansson, C. Mikael von Mentzer, Morten Chr. Mo and Dan Sten Olsson who was also elected Chairman of the board. The share dividend for 2005 was set in accordance with the board of directors proposal at SEK 1.00 per share.
The board of directors
The board of directors bears the ultimate responsibility for the company’s organisation and administration. In addition to supervising the President, the board of directors also monitors that the company’s financial circumstances are reviewed in a satisfactory manner. The board of directors’ considerations and decisions are entirely aimed at promoting shareholders’ interest in value development and returns. The board of directors is responsible for weighing up Concordia Maritime’s risk-taking and has established rules for decision-making procedures, financial reporting and financing. In addition, the company has guidelines for work within the areas of quality, the environment, ethics, information, personnel, IT activities and safety monitoring.
The work follows rules of procedure established each year which cover the issues the board of directors will deal with at each ordinary meeting, the division of work within the board of directors, with special duties for the Chairman and Deputy Chairman. The rules of procedure also specify rules for financial reporting to the board and more detailed rules concerning the President’s responsibilities and powers.
Chairman
The Chairman of the board of directors shall, through contact with the President, follow the company’s development between board meetings, and is responsible for board members always receiving the information they need to be able to complete their tasks. In addition, the Chairman shall lead the work of the board of directors.
Committees of the board of directors
Nomination committee
The task of the Nomination committee is to submit proposals to the AGM for board members and auditors (in the event of an election) and fees for the board and the auditors. The Nomination committee must also submit proposals for renumeration for the work of members on special committees. The Nomination committee consists of the board’s Deputy Chairman and one representative of each of the two largest shareholders in terms of votes. These representatives must not be board members. The Chairman of the Nomination committee must be the representative of the largest shareholder.
The mandate period for the Nomination committee runs until a new Nomination committee is appointed. If any of the shareholders ceases to be one of the two largest, a member appointed by such a shareholder must make his/her place available, and the shareholder(s) who replace(s) the former largest shareholder shall appoint a new member. If any shareholder renounces the right to appoint a member, the shareholder that is the next largest in terms of votes may appoint a member.
If a member leaves the Nomination committee before its work is complete, the shareholder who appointed the member in question must appoint a new member. If the member in question is appointed by a shareholder who was one of the two largest, but is no longer such when the member leaves the post, the shareholder that has taken the place must appoint a new member. A shareholder who appoints a member to the Nomination committee is entitled to discharge the member and appoint a new member. The names of the Nomination committee’s members and the shareholders they represent will be published on the company’s website at least six months before the AGM.
The Nomination committee for the 2007 AGM consists of Karl-Magnus Sjölin (Stena Sessan Rederi AB), Ivar Virgin (Mariedals Lantbruk), C. Mikael von Mentzer (Deputy Chairman, Concordia Maritime). Prior to the 2007 AGM, the members met once.
Salary compensation committee
A salary compensation committee is set up to make decisions on the salary and other terms of employment for the President. The committee consists of the Chairman of the board of directors and the Deputy Chairman. During 2006, the committee met twice.
Audit committee
According to the Swedish Code of Corporate Governance (“the code”) the board of directors shall establish an audit committee. The committee should have at least three members, where at least one should be independent to major share holders and a majority of the committee should be independent towards the company and its management. The work of the audit committee, according to the code, includes ensuring the quality of the company’s financial reports.
Concordia Maritime’s board of directors has decided not to establish an audit committee instead that work is to be carried out by the entire board. The reason is that accounting- and auditing issues are of high importance hence it is deemed a matter for the entire board.
The work of the board of directors during 2006
The instructions issued by the AGM are followed when nominating board members. Concordia Maritime’s board of directors consists of six ordinary members elected by the AGM, and two employee representatives and a deputy appointed by the employees. Members elected at the AGM are elected for one year. There is no limit for how long a member can sit on the board. The board of directors’ assignments are regulated by the Companies Act and the Articles of Association.
At the first board meeting on 26 April 2006, Dan Sten Olsson was re-elected Chairman, and C. Mikael von Mentzer as Deputy Chairman. The current Chairman has held the post since 1993, and the Deputy Chairman since 2002.
During 2006, six ordinary and five extraordinary board meetings were held. Each ordinary meeting dealt with the minutes from the previous meeting, safety and the environment, the President’s report on the business situation, including a report from the subsidiaries, the President’s report on the current status compared to the business plan/objectives, as well as a report on income and the financial position.
Assessment of the work of the board of directors During 2006, the work of the board of directors was assessed within the following three main areas:
- Is the board of directors dealing with the appropriate issues?
- Is the board of directors working in the right way?
- How does the board of directors function as a group?
The assessment as a whole gave a positive picture of the work of the board of directors.
Remuneration
The members of the board of directors elected by the Annual General Meeting receive a fee determined by the AGM, distributed between the members in accordance with a decision of the board. The board of directors decided at the first board meeting on 26 April 2006, that the total board fee determined by the AGM, amounting to SEK 1,400,000 should be distributed as follows: SEK 350,000 each to the Chairman and Deputy Chairman, and SEK 175,000 to each of the other members elected by the Annual General Meeting. Apart from expenses incurred in the board’s work, no other remuneration or benefits have been paid. Each of the employee representatives received remuneration of SEK 15,000.
President and group management
Concordia Maritime’s group management, which consists of the President, Financial Manager and Technical Director, is based primarily in Gothenburg. The President leads daily activities, produces information and decision documentation prior to board meetings and acts as a rapporteur at such meetings.
Pursuant to the rules of procedure, which among other things regulate the relationship between the President and the board of directors, the group management is responsible for formulating the group’s overall strategy, business management, division of financial resources within activities and the group’s financing and risk management. These tasks also include issues concerning company acquisitions and other major projects. The group management is also responsible for compiling the group’s financial reports, communications with the Stock Market, and a number of other issues of general interest to the group.
Incentive program and bonus system
In order to attract and retain expertise, Concordia Maritime aims to offer employees attractive, competitive remuneration, with a bonus system linked to targets met and earnings. All Concordia Maritime employees receive remuneration in the form of a fixed salary. There is also a bonus program for all employees. The bonus for the President is determined by the Salary compensation committee on the basis of a number of qualitative and quantitative objectives.
Remuneration for the President and group management
Remuneration and terms for the President are determined by Concordia Maritime’s Salary compensation committee. Remuneration for other senior executives is prepared and determined by the President. All remuneration paid to the President and group management during 2006 is shown in note 17 to the financial report.
Pension terms for the President and group management
Pension premiums for the President of SEK 1,242 thousand have been expensed. The President is contractually entitled to retire at the age of 65. A premium corresponding to 35 per cent of the President’s monthly pensionable salary at any time is paid into the pension. For other senior executives, pension terms comply with the relevant collective agreements.
Periods of notice and severance pay
The President has an agreement for severance pay amounting to two years' salary on termination by the company. Compensation from Concordia Maritime remains if remuneration is received from another employer. The President himself cannot claim severance pay. The period of notice by the President is twelve months and by Concordia Maritime twelve months.
Other benefits Other benefits consist mainly of company car benefits.
Organisation
The Concordia Maritime group consists of the parent company Concordia Maritime AB (publ) and two subsidiaries, which report directly to the President. Reporting takes place every month.
Audit
An auditor is proposed by the main owner and elected by the AGM for four years. The current auditor is Thord Elmersson, KPMG, whose mandate expires in 2007. The auditor provides an auditor's report for Concordia Maritime AB’s Annual Report and consolidated accounts, the administration by the board and the President, plus the Annual Reports for the other subsidiaries. The audit is done in accordance with the Companies Act and IFRS.
The auditor's fee is charged on an ongoing basis. Each year the auditor reports the results of his review to the board. KPMG has been in charge of audits at Concordia Maritime since 1984. The audit comprises mainly an ongoing audit and examination of the annual accounts.
KPMG also assists Concordia Maritime with advice in the field of accounting. Over the last three years, this has meant issues primarily relating to the introduction of accounting in accordance with IFRS. KPMG has also assisted with some tax issues. No circumstances have been found that are felt to have affected the impartiality and independence of the auditors as a result of this advice. During 2006, KPMG received fees totalling SEK 1.8 million.