Assignment of responsibilities and basic guidelines
Reports and information
Annual General Meeting
Nomination of Board Members
The work of the Board
The duties of the Chairman
Compensation Committee
Audit Committee
The CEO
External audit
Risk management
Corporate remuneration policy
Assignment of responsibilities and basic guidelines
The management and internal controls within the Proffice Group are divided between the shareholders at the Annual General Meeting, the Board of Directors and the Chief Executive Officer in accordance with the Swedish Companies Act and the articles of association of the company.
The Proffice Board has overall responsibility for operations. The Board is responsible for the administration of the company in accordance with the Swedish Companies Act and makes decisions concerning the overall strategies of the company. The Chief Executive Officer manages operations within the framework established by the Board. Responsibility for daily activities rests with the managing directors of each subsidiary and their operational managers.
Reports and information
Through the CEO, the management is responsible for the company’s contacts with the capital market, media and other stakeholder groups. In issues of ownership, the company is represented by the Chairman of the Board.
Proffice produces the annual report, interim reports and other current information in accordance with Swedish law and practice. The reports are published in Swedish and English, and distributed to the shareholders and other parties who have declared their interest in these to the company. Reports and press releases can be accessed on the company’s websites http://www.proffice.se/ and http://www.proffice.com/.
Proffice reports registered people with a position of insight in Proffice to Finansinspektionen (the Swedish Financial Supervisory Authority). The following individuals in Proffice are people considered to always be in a position of insight: board members, members of group management and the company’s auditors. The company also defines an additional group of officers as people with positions of insight.
Annual General Meeting
All shareholders registered in the shareholders’ register and who notify the company of their participation in accordance with issued notice, are entitled to participate in discussions at general meetings. The Annual General Meeting 2006 will take place on April 6. At the Annual General Meeting in 2005, shareholders corresponding to 47 per cent of the capital and 66 per cent of the votes participated.
Nomination of Board members
At Proffice’s Annual General Meeting in 2005 it was decided that, in the final quarter of the year, the three largest shareholders should each appoint a representative for the Nomination committee who should put forward a recommendation to the Board. The recommendation will be presented at the Annual General Meeting on April 6 for its decision.
The members of the Nomination committee are Christer Hägglund (owner of Christiania Compagnie B.V., the principal owner of Proffice), Johan Lannebo (Lannebo Funds) and Ann Ahlberg (SEB Funds).
In accordance with the articles of association, the Board of Directors of Proffice must consist of three, and at most eight, members. During nomination of the members of the Board, candidates are assessed according to their familiarity with the sector, their experience as a Board member, knowledge of the labour market and other conditions in the countries in which Proffice runs its operations.
The work of the Board
At the Annual General Meeting in 2005, Christer Hägglund, Alf Johansson, Roland Nilsson, Christer Sandahl, Gunilla Wikman, Karin Eliasson and Kenny Palmberg were re-elected as members of the Board. Sylvia Kristensen and Britt Vennerström Pedersen are employee representatives. The Board is composed of members who are, or represent, major shareholders in Proffice and independent members. Christer Sandahl was elected Chairman of the Board.
The Board has established rules of procedure with instructions concerning the division of duties between the Board of Directors and the CEO, as well as instructions for financial reporting. The Board is responsible for making decisions concerning the Group’s overall strategy and acquisitions. The Board is also responsible for the administration of the Group in accordance with the Companies Act in Sweden. In accordance with the rules of procedure, the Board must convene at least seven times a year.
The Board has overall responsibility for the company’s system of internal controls, the aim of which is to secure the shareholders’ investments and the Group’s assets, to ensure appropriate accounts are maintained and that the financial information used within the operation and for publication is reliable. The system is designed to ensure efficiency within the operation as well as compliance with Swedish law and regulations. The internal control system cannot, however, provide an absolute guarantee against significant discrepancies or losses.
In 2005, the Board held its board meeting following its election on the same day as the Annual General Meeting at which it was decided that two members of the Board sign jointly for the company. The CEO is entitled to sign for the company at all times concerning current management measures.
In 2005, the Board of Directors held 14 minuted meetings. The secretary was Fredrik Lindgren, CFO, who participated as an additional member. Overall attendance was 91 per cent. The Board dealt with fixed items that arose at each Board meeting such as market conditions, financial reporting and investments. Other issues discussed by the Board during the year included measures to improve profitability, market development, and company acquisitions. In addition, issues discussed at selected board meetings include annual accounts, interim reports, and budgets. At Board meetings in January and December, Proffice’s auditors go through their observations concerning the financial audit of the Proffice Group.
The duties of the Chairman
The Chairman of the Board is responsible for managing the Board’s work and keeping all other members up-to-date with the information they require to ensure the quality of the Board’s work is maintained and exercised in accordance with the Companies Act in Sweden. The Chairman represents the company in issues of ownership.
Compensation committee
The Board has appointed a compensation committee comprising the Chairman of the Board, Christer Sandahl, together with Board members Karin EliassonChrister Hägglund and up till January 2006, former CEO Alf Johansson.
The task of the compensation committee is to establish the salary and other remuneration payable to the CEO, and the policies concerning salaries and other remuneration payable to other Group Management members and managing directors of the subsidiaries, which must be submitted to the Board for their information or approval. The compensation committee must review the conditions of employment of the senior executives regularly and provide reports on this to the Board. Salaries and other remuneration paid to the executives directly under the CEO must be reported to and approved by the compensation committee. The CEO is not to participate in the work of the compensation committee when remuneration of the ceo is under discussion.
Three meetings were held in 2005. A standard review of the conditions and structure was implemented and, furthermore, an incentives programme was reported and discussed.
Audit committee
The Board of Directors has decided that the entire Board shall act as audit committee and be responsible for following up the auditing of the company and the Group, and making recommendations to the Annual General Meeting regarding the election of auditors.
The CEO
The Chief Executive Officer manages operations within the framework established by the Board. He compiles essential information and the basis for decision-making before Board meetings, submits reports and presents justified proposals for resolution. Every month, the Chief Executive Officer provides the Board members with the information they require to monitor the position, activities and development of the company and Group, as well as providing the Chairman with up-to-date information about the operation.
External audit
At the Annual General Meeting in 2003, Torbjörn Hanson and Johan Kaijser of Ernst & Young AB were appointed as auditors until the end of the Annual General Meeting held in the fourth financial year after the election of the auditors, in other words, the Annual General Meeting in 2007. Torbjörn Hanson has been an auditor for Proffice since 1999 and Johan Kaijser since 1991.
Risk management
The company has a number of methods for continuously monitoring and controlling the risks associated with achieving the goals of the company. The Board assists the management by identifying and evaluating major risks associated with the Group’s activities in a co-ordinated manner. The Board is also responsible for assessing and ensuring the operational agenda is focused on the most critical risks involved.
Corporate remuneration policy
Fees are paid to the Chairman of the Board and its members in accordance with the decision of the Annual General Meeting. Separate fees are not paid for committee work. Board members employed by the company and employee representatives do not receive a Board fee.
Remuneration of the Chief Executive Officer and other Group Management members is made up of a basic salary, variable remuneration, other benefits, a pension, financial instruments and more. For more information about members of Group Management see under "Our company/corporate management".
The apportionment of the basic salary and variable remuneration must be in proportion to the responsibility and authority of the officer concerned. In the case of the Chief Executive Officer, the variable remuneration has an upper limit of 50 per cent of the basic salary, the variable remuneration for other Group Management members limited to a maximum of 30 per cent of the basic salary. Variable remuneration is based on performance in relation to individually set goals.
Retirement benefits and remuneration in the form of financial instruments, etc, and other benefits to the Chief Executive Officer and other Group Management members are paid as part of the total remuneration.
The board of directors' and Group Management
Up-to-date information about Board and Group Management members shareholding in proffice can be found at www.fi.se under insider trading.
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