Members of the board of directors
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.
Control over financial reporting
The organization of the internal control over financial reporting
Volvo has had internal control processes for a long time.
Volvo applies internal control principles introduced by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The COSO principles consist of five interrelated components. The components are: control environment, risk assessment, control activities, information and communication and follow-up/supervision.
Volvo has had a specific department for internal control since 2005. The aim of the Internal Control function is to provide support for management groups within business areas, so that they are able to continuously provide good and improved internal controls relating to financial reporting. The Audit Committee is informed of the result of the work performed by the Internal Control function within Volvo with regard to risk, control activities and follow-up on the financial reporting.
Volvo also has an Internal Audit function with the primary task of independently verifying that companies in the Group follow the principles and rules that are stated in the Group's directives, policies and instructions for financial reporting. The head of the Internal Audit function reports directly to the CEO, the Group's CFO and the Audit Committee.
For more information, read under the heading "Internal control over financial reporting" in the Corporate Governance Report.
Committees of the Board
The Board has an Audit Committee primarily for the purpose of supervising the accounting and financial reporting processes and the audit of the annual financial statements.
The Audit Committee’s duties include preparing the Board’s work to assure the quality of the Group’s financial reporting by reviewing interim reports, Annual Report and the consolidated accounts. The Audit Committee also has the task of reviewing and overseeing the Group’s legal and taxation matters as well as compliance with laws and regulations that may have a material impact on financial reporting. Furthermore, the Audit Committee has the task of reviewing and overseeing the impartiality and independence of the company’s auditors. The Audit Committee is also responsible for evaluating both internal and external auditors’ work and, when applicable, handling the tender process for audit services.
In addition, it is the Audit Committee’s task to preapprove what other services, beyond auditing, the company may procure from the auditors. The Audit Committee also adopts guidelines for transactions with companies and persons closely associated with Volvo. Finally, the Audit Committee evaluates the quality, relevance and effectiveness of the Group’s system for internal control over financial reporting, as well as with respect to the internal audit and risk management, and discharge any other duties of an audit committee.
At the statutory Board meeting following the Annual General Meeting 2019, the following Board members were appointed members of the Audit Committee:
- Hanne de Mora
- Eric Elzvik
- Helena Stjernholm
Hanne de Mora was appointed Chairman of the Audit Committee.
The Board has a Remuneration Committee for the purpose of preparing and deciding on issues relating to the remuneration of senior executives in the Group. The duties of the Committee include making recommendations to the Board on the Board’s decisions regarding terms of employment and remuneration of the CEO and the deputy CEO of AB Volvo, principles for the remuneration, including pensions and severance payments, of other members of the Group Executive Board and principles for variable salary systems, share based incentive programs and for pension and severance payment structures for other senior executives in the Group.
The Remuneration Committee shall monitor and evaluate ongoing programs and programs concluded during the year for the variable remuneration of senior executives, application of the guidelines for the remuneration of senior executives on which the Annual General Meeting shall decide, and the current remuneration structures and levels in the Group. The Board shall, no later than three weeks prior to the Annual General Meeting, present the results of the Remuneration Committee’s evaluation on the company’s website.
At the statutory Board meeting following the Annual General Meeting 2019, the following Board members were appointed members of the Remuneration Committee:
- Carl-Henric Svanberg
- Matti Alahuhta
- James W. Griffith
- Mikael Sällström
Carl-Henric Svanberg was appointed Chairman of the Remuneration Committee.
Work in 2018
The Remuneration Committee held six meetings in 2018. The Remuneration Committee reports the outcome of its work to all members of the Board on a regular basis.
Technology and Business Transformation Committee
In April 2019, the Board’s Business Area Committee was replaced by the Technology and Business Transformation Committee, shifting the primary focus of the committee towards new technologies and the development of new business models.
At the statutory Board meeting following the Annual General Meeting 2019, the following Board members were appointed members of the Technology and Business Transformation Committee:
- Carl-Henric Svanberg
- Matti Alahuhta
- Lars Ask
- Mari Larsson
- Kathryn V. Marinello
- Martina Merz
- Helena Stjernholm
Carl-Henric Svanberg was appointed Chairman of the Technology and Business Transformation Committee.