Corporate GovernanceTelelogic applies the principles of sound corporate governance as an instrument for increased competitiveness as well as for promoting capital market confidence for Telelogic. This implies i.a. that the Company maintains an efficient organizational structure with clear areas of responsibility, that the financial reporting is transparent and that the Company in all respects maintains good corporate citizenship. The corporate governance principles applied by Telelogic are based on Swedish law, in particular the Swedish Companies Act, and the regulatory system of the Stockholm Stock Exchange. Swedish Code of Corporate Governance
In December 2004 the Swedish Code of Corporate Governance was introduced (the "Code"). The Swedish Association of Exchange Listed Companies and the Stockholm Stock Exchange have agreed to incorporate the Swedish Code of Corporate Governance into the Stockholm Stock Exchange's rules. The decision means that initially the Code will apply to all Swedish companies on the A List and Swedish companies on the O List with a market capitalization exceeding SEK 3 billion. The affected companies should apply the Code as soon as possible after July 1, 2005, and it must be fully implemented prior to the Annual General Meetings in 2006. Telelogic adheres to the listing requirements of the Stockholm Stock Exchange. Telelogic has since the introduction of the Code gradually adjusted the routines that were not already in compliance with the Code. Board of Directors and its rules of procedure
The Annual General Meeting in May 2006 elected seven regular Directors, including the company’s President. Additionally, the employee organization has appointed two regular members and one deputy member to the Board. The Company’s CFO and CTO regularly participate at board meetings, as do guest speakers, while other management personnel participate at board meetings as deemed necessary. For more information about Directors, please see pages 70–73 about the Board and auditors. During the year, twenty board meetings were held, nine of which were scheduled since the beginning of the year and eleven called to decide about acquisitions, new issues, and stock option programs. A constituent board meeting was held on May 3, the same day as the Annual General Meeting. It was decided at the meeting that Bo Dimert would continue as Chairman of the Board. The Board’s work follows an established plan, which is intended to meet the Board’s needs for information concerning the organizationand the management team’s need for guidelines in carrying out its duties. The Board of Directors has regulated the way in which it operates in written rules of procedure in which clarifi cations are made of the division of responsibility between the Board and the CEO, and the guidelines for fi nancial reporting to the board. The rules of procedure are subject to annual review and an update was performed during the year. The Directors were specifically selected to be able to effectively support and control the work of the Executive Management. In addition to the Chief Executive Offi cer and the company’s lawyer, Erik Gabrielson, all Directors are independent of the Company and the Executive Management. All Directors are independent in relation to the major shareholders. Compensation issues
The Board of Directors appoints, within the Board, a compensation committee that handles issues pertaining to policy with respect to terms of employment, and bonus systems concerning the CEO and executive management Group. The compensation committee also addresses general terms of employment and compensation issues that pertain to all employees at the Company, such as management of the global stock option programs in accordance with the authorization granted at the Annual General Meeting. The compensation committee during 2004 consisted of Bo Dimert, chairman, Kjell Duveblad and Erik Gabrielsson. The committee’s chairman regularly informs the Board of Directors of the committee’s work and the proposals that are submitted for decision by the Board. Nomination committee
The company has established a nomination committee consisting of the Chairman of the Board (convener) and representatives of the four biggest shareholders as of August 31, 2006, which means that Annika Andersson, Fourth National Swedish Pension Fund, chairperson of the nomination committee, Mats Tunér, SEB Funds, Peter Rönström, Lannebo funds, Anders Ljungqvist, AMF Pension, and Bo Dimert, chairman of the board of Telelogic are members of the nomination committee. The composition of the nomination committee was announced in October 2006. The chairman of the nomination committee was appointed among the shareholder representatives at the statutory meeting. The nomination committee will formulate proposals for the chairman of the AGM, the number of Directors, remuneration to Directors and auditors, and proposals for Directors, the Chairman of the Board, and where applicable, the auditors. The nomination committee follows the rules and carries out the tasks that apply to the nomination committee according to the Swedish Code of Corporate Governance (Point 2 in the Code of Corporate Governance). The nomination committee met five times prior to the 2007 AGM. The nomination committee does not receive any remuneration. |
