We observe the Swedish Code of Corporate Governance. It is based on the principle of "comply or explain," meaning that a company may deviate from the code, provided that each deviation is properly explained.
The term corporate governance refers to the rules and structure created to ensure effective and controlled management of a limited liability company. It encompasses a variety of company bodies and functions, of which the Board of Directors and President are the most important.
Under the Swedish Companies Act, the board of directors is ultimately responsible for the organisation and the management of a company. Our articles of association provide that our board of directors shall be elected by shareholders and consist of not less than three and not more than fifteen members.
Pursuant to Swedish law our board of directors shall be elected at the annual general meeting of shareholders and serve for a term expiring at the next annual general meeting. The Corporate Governance Code also contains rules for director independence and requires a majority of the directors to be independent from the company and its management.
Pursuant to the Corporate Governance Code, we shall be required, among other things, to have a Nomination Committee, an Audit Committee and a Compensation Committee. The Corporate Governance Code also sets forth composition requirements for each of these committees as well as for the board of directors.