Independence requirements

The Board of Directors of AB Volvo must meet independence requirements pursuant to the Swedish Corporate Governance Code ("the Code"). Further, the Audit Committee must meet independence requirements pursuant to the Swedish Companies Act. Below follows a short description of the independence requirements.

The independence requirements mainly state that only one person from the company's management may be a member of the Board, that a majority of the Board members elected by the General Meeting shall be independent of the company and the company management and that at least two of the Board members elected by the General Meeting who are independent of the company and the company's management shall also be independent of the company's major shareholders.

In addition, the Code demands that a majority of the members in the Audit Committee shall be independent of the company and the company management and that at least one of the members who is independent of the company and the company management shall also be independent of the company's major shareholders. According to the Swedish Companies Act, the members of the Audit Committee may not be employees of the company and at least one member of the Audit Committee shall be independent of the company, the company management and the company's largest shareholders and shall have accounting and auditing expertise. With regard to the Remuneration Committee, the Code sets the requirement that members of the Remuneration Committee, with the exception of the Board Chairman if a member of the Remuneration Committee, shall be independent of the company and company management.

Prior to the Annual General Meeting 2011, considering the above requirements regarding the Board's independence, the Election Committee reported the following understanding with regard to the Board members who were elected at the Annual General Meeting in 2011:

Peter Bijur, Hanne de Mora, Louis Schweitzer, Ravi Venkatesan, Lars Westerberg and Ying Yeh were all considered independent of the company and company management as well as of the company's major shareholders.

Olof Persson, as Volvo's CEO, was considered independent of the company's major shareholders but not of the company and company management.

Jean-Baptiste Duzan was considered independent of the company and the company management. As an advisor to the Chief Executive Officer of Renault S.A. he was considered to have such a relationship with Renault that he was not to be regarded as independent thereof. Since Renault s.a.s. controlled more than 10 percent of the votes in the company, prior to the Annual General Meeting 2011, he could not, in the Election Committee's opinion, be considered as independent of one of the company's major shareholders.

Anders Nyrén was considered independent of the company and company management. As Chief Executive Officer of AB Industrivärden he was considered not to be independent thereof. Since AB Industrivärden controlled more than 10 percent of the votes in the company, prior to the Annual General Meeting 2011, he could not, in the Election Committee's opinion, be considered as independent of one of the company's major shareholders.

The Election Committee must also meet independence requirements pursuant to the Code. According to the Code, the majority of the members of the Election Committee are to be independent of the company and the company management. At least one member of the Election Committee is to be independent of the company's largest shareholder in terms of votes or any group of shareholders that act in concert in the governance of the company. Neither the CEO nor other members of the executive management are to be members of the Election Committee. If Board members are included in the Election Committee, these may not constitute a majority of the Election Committee's members. The Chairman of the Board of the company or other Board member may not be the Chairman of the Election Committee. If Board members are included in the Election Committee, not more than one of them may be dependent in relation to the company's largest shareholders.
 
All members of the Election Committee have been considered to be independent of the company and the company management. All members of the Election Committee except Jean-Baptiste Duzan have, prior to being appointed, been considered to be independent of  Volvo's largest shareholder in terms of votes. This conclusion is based on the facts that Renault s.a.s. is Volvo's largest shareholder in terms of votes and that Jean-Baptiste Duzan represents Renault s.a.s. in the Election Committee.