Ownership structure
According to the share register maintained by Värdepapperscentralen AB (VPC), as of 31 December 2008, Concordia Maritime had 4,834 shareholders. The largest owner is the Stena Sphere, which has been the principal owner since the company was first listed in 1984.
Stena has declared that a holding in Concordia Maritime of about 50 per cent of the capital is one of its long-term objectives. At year-end, the Stena Sphere owned 52 per cent of the share capital and had 72.7 per cent of the votes.
Information on shareholders and ownership is updated every quarter on Concordia Maritime’s website.
Voting right
The share capital consists of Series A shares and Series B shares, both of which entitle their holders to a share in the company’s assets and profit and an equally large dividend. The quota value is SEK 8 per share. Each Series A share represents ten votes and each Series B share one vote. At year-end all the Series A shares were controlled by the Stena Sphere.
On 31 December 2008, the share capital amounted to SEK 381.8 million divided between 47.73 million shares, of which 43.73 million were Series B shares.
Nomination process
Concordia Maritime’s nomination process for the election of board members includes the appointment of a nomination committee consisting of three board members. These members shall be the board’s Deputy Chairman and one representative of each of the two largest shareholders, in terms of votes, who wish to appoint a representative.
The composition of the nomination committee is based on shareholder statistics from VPC as of the last banking day in August the year before the annual general meeting and other reliable ownership information provided to the company at this time. The names of the representatives on the nomination committee and the shareholders they represent shall be made public as soon as they have been appointed, although no later than six months prior to the annual general meeting. If the shareholdings of the major shareholders change during the nomination process, the composition of the nomination committee may be changed to reflect this.
The guidelines for the largest shareholders’ choice of committee member are that the person shall have knowledge and experience relevant to Concordia Maritime. The rules in the Swedish Code of Corporate Governance applying to independent board members shall be observed.
The task of the nomination committee is to submit proposals to the AGM concerning the following questions:
- Chairman of the AGM
- Board members
- Chairman of the Board
- Remuneration of each board member
- For work on committees
- For the nomination committee for the following year
The nomination committee’s proposal together with a report on its work shall be published no later than in conjunction with the notice convening the AGM. Shareholders are given the opportunity to present nomination proposals to the nomination committee.
Governance and control
The corporate governance and control of Concordia Maritime’s operations can be described from several different perspectives.
From an owner perspective, its operations are governed by a board of directors elected by the shareholders. The board formulates the frameworks for the operations and exercises control over the company’s management. It has recourse to an elected auditor whose task is to provide an auditor’s report for Concordia Maritime AB’s annual report and consolidated accounts and the administration of the company by the board and the President.
As a public and listed Swedish company, Concordia Maritime is also governed by a number of laws and regulations. Among the most important of these are the Swedish Companies Act, the Swedish Annual Accounts Act, International Financial Reporting Standards (IFRS), Nasdaq OMX Stockholm stock exchange listing and the Swedish Code of Corporate Governance. The day-to-day operation of the company is ultimately guided by the customers’ demands for effectiveness and reliability. Concordia Maritime has chosen a strategy that involves collaboration with a number of subcontractors for e.g.the commercial operation and ship management functions. This collaboration is regulated by binding contracts as well as mutual trust. There is an extensive exchange of information between the parties and here, too, the control and reporting systems are well developed.
In addition to these legal control mechanisms, Concordia Maritime’s business activities are subject to and governed by a number of industry-specific regulations. The most important of these are UN, EU and US regulations related to shipping and trade in oil and petroleum products and the oil companies’ own ship inspections (vetting). There are also regulations related to individual flag states, classification societies and national maritime authorities. All these bodies exercise continuous control over the activities down to ship level.
Nomination comittee for the 2009 AGM
The composition of the nomination committee was announced on Concordia Maritime’s website on 26 September 2008.
In 2008, the nomination committee met once in addition to a number of contacts over the telephone. The nomination committee consisted of C. Mikael von Mentzer (Deputy Chairman, Concordia Maritime), Karl-Magnus Sjölin (Stena Sessan Rederi AB), and Arne Lööw (Fjärde AP-fonden). The nomination committee represented approx. 3.2 per cent of the shareholders’ votes.
As of 11 March 2009, no changes had been made to the composition of the nomination committee. Shareholders wishing to present proposals for the composition of the nomination committee may do so via e-mail to info@concordia-maritime.se
Annual General Meeting
The shareholders’ right to make decisions about Concordia Maritime’s business is exercised at the shareholders’ meeting. To participate in decisions, the shareholder must be present at the shareholders’ meeting, either in person or via a proxy. Additionally, the shareholder must be registered in the share register by a certain date prior to the AGM and the company must have been formally informed of his intention to attend the AGM.
Decisions at shareholders’ meetings are normally taken by simple majority vote. In certain questions, however, the Swedish Companies Act stipulates that decisions be taken by a larger majority of the shares represented at the shareholders’ meeting and votes given.
Individual shareholders wishing to have a matter considered at the annual general meeting can normally apply to the board in good time before the shareholders’ meeting at the address published on the company’s website.
The annual general meeting is held in the Gothenburg region in the first half of every year. At the annual general meeting, decisions are taken on questions concerning approval of the annual report, dividends, remuneration of the board and the auditors, the election of board members and, where appropriate, auditors, guidelines for remuneration of group management together with other important matters.
An extraordinary annual general meeting may be held if the board considers it necessary or if Concordia Maritime’s auditors or owners of at least 10 per cent of the shares so request.
Annual General Metting 2008
The 2008 annual general meeting was held on 22 April 2008. The meeting was attended by 97 shareholders, either in person or via a proxy, representing 77.5 per cent of the votes. All the board members elected by the meeting were present with the exception of Morten Chr. Mo, Mats Jansson and Stefan Brocker. Also present were the company’s auditor and members of the nomination committee. The decisions taken at the meeting included the following:
- In accordance with board’s and the President’s proposal, to pay a dividend of SEK 1.00 per share for 2007.
- Re-election of the board members Dan Sten Olsson, C. Mikael von Mentzer, Per Bjurström, Stefan Brocker, Mats Jansson, Morten Chr. Mo, Bert Åke Eriksson, Göran Dahlman, Jens Ole Hansen and Jörgen Lorén to the board.
- Re-election of Dan Sten Olsson as Chairman of the Board.
- That the annual fee, not including travel expenses, paid to the members of the board of directors shall amount to SEK 1,575,000, to be distributed as follows: SEK 350,000 each to the Chairman and the Deputy Chairman and SEK 175,000 to each of the other members not employed in the Group; and that the auditors shall receive remuneration for reasonable costs as specified in invoices based on the actual time spent on carrying out the assignments.
- Principles for remuneration and terms of employment for the President and other senior executives.
- Routines for the appointment of the nomination committee and its work.
The board of directors
The overall task of the board is to administer the business of the Group on behalf of the owners in such a way that the owners’ interest in a good return on capital in the long term is satisfied in the best possible way. The board’s work is regulated by, among other things, the Swedish Companies Act, the company’s articles of association, the Code and the rules of procedure established by the board for its work. The board makes decisions in questions concerning the Group’s overall objectives, strategic direction and more important policies such as significant questions involving financing, investments, acquisitions and sales. The board monitors and considers, among other things, the follow- up and control of the activities in the Group, the Group’s external communications and organisational questions, including the evaluation of the Group’s operative management. The board’s responsibility includes appointing and, when appropriate, dismissing the company’s president. It also has the overall responsibility for establishing effective systems for internal controls and risk handling.
Every year, the board establishes rules of procedure for its work. When necessary, these rules of procedure are revised. The chairman’s special role and tasks as well as the areas of responsibility for the committees appointed by the board are described in the rules of procedure. According to the rules of procedure, the chairman shall ensure that the board’s work is conducted in an effective way and that the board performs its tasks. The chairman shall also organize and distribute the board’s work among its members and ensure that the board’s decisions are implemented in an efficient manner and that the board carries out an evaluation of its work every year. The rules of procedure also include detailed instructions to the president and other corporate functions concerning what questions require the board’s approval. Among other things, the instructions specify the highest amount different decision-making bodies in the Group are entitled to approve in conjunction with credits, investments and other outlays.
The work follows rules of procedure established each year which cover the issues the board of directors will deal with at each ordinary meeting, the division of work within the board of directors, with special duties for the Chairman and Deputy Chairman. The rules of procedure also specify rules for fi nancial reporting to the board and more detailed rules concerning the president’s responsibilities and powers.
The rules of procedure stipulate that the statutory board meeting shall be held directly after the annual general meeting. At this meeting, decisions are taken on, for example, the election of the deputy chairman and who shall sign Concordia Maritime’s business name. In addition, the board holds six ordinary meetings per year. Four of these meetings are held in conjunction with the Group’s annual report and interim reports. These meetings are normally held in Gothenburg. Additional meetings, including teleconferences, are held when necessary.
Rules of procedure and board meetings
Every year, the board establishes rules of procedure for its work. When necessary, these rules of procedure are revised. The chairman’s special role and tasks as well as the areas of responsibility for the committees appointed by the board are described in the rules of procedure. According to the rules of procedure, the chairman shall ensure that the board’s work is conducted in an effective way and that the board performs its tasks. The chairman shall also organize and distribute the board’s work among its members and ensure that the board’s decisions are implemented in an efficient manner and that the board carries out an evaluation of its work every year. The rules of procedure also include detailed instructions to the president and other corporate functions concerning what questions require the board’s approval. Among other things, the instructions specify the highest amount different decision-making bodies in the Group are entitled to approve in conjunction with credits, investments and other outlays.
The rules of procedure stipulate that the statutory board meeting shall be held directly after the annual general meeting. At this meeting, decisions are taken on, for example, the election of the deputy chairman and who shall sign Concordia Maritime’s business name. In addition, the board holds six ordinary meetings per year. Four of these meetings are held in conjunction with the Group’s annual report and interim reports. These meetings are normally held in Gothenburg. Additional meetings, including teleconferences, are held when necessary.
Ensuring the quality of financial reporting
Concordia Maritime is a company with a limited number of customers and a limited number of employees. Its business is based on long-term contracts. Taken as a whole, this means that relatively few transactions take place every year and as a result, the financial reporting at the company is relatively easy to verify. For this reason there is no specific function for internal controls in the Group. The President bears the ultimate responsibility for ensuring that internal controls function satisfactorily. Day-to-day work, however, is delegated to the business administration and finance function.
The rules of procedure decided on by the board every year includes detailed instructions concerning what financial reports and other financial information shall be submitted to the board. In addition to the interim reports and the annual report, other financial information relating to the company and its areas of activity are examined and evaluated on an ongoing basis.
Control environment
The core of the internal control of the financial reporting is based on the Group’s directives, guidelines and instructions as well as a structure of responsibility and authority that has been adapted to the Group’s organisation in order to create and maintain a satisfactory control environment. The principles for internal controls and directives and guidelines for financial reporting are collected in the Group’s financial policy. Since there are relatively few internal transactions, which by their nature are not especially complex, in the company, the company’s management and board have not considered it necessary to establish a special function for internal audits.
A fundamental component of Concordia Maritime’s control environment is the corporate culture existing in the Group in which management and employees work. Concordia Maritime works actively with communication and training/education as regards the basic values, which are described in an internal document that ties all the business areas together and constitutes an important part of the common culture in the Stena Sphere.
Risk assessment
Risks related to the financial reporting are assessed and monitored by the board as whole. There is no separate audit committee; instead, audit matters are considered by the whole board.
Prior to examining interim reports and the annual report, the board members are given access to relevant information in good time before publication in conjunction with the following board meeting. The reports are then discussed in detail at a board meeting. A few days before publication, Concordia Maritime’s financial manager reserves time to answer any questions that may be asked by the board members.
The board also examines the most important accounting principles applied in the Group with respect to the financial reporting as well as significant changes in these principles.
The external auditors report to the board when necessary but at least once a year.
Financial reporting and information
Concordia Maritime’s routines and systems for external communication are intended to provide the market with relevant, reliable, correct and current information about the Group’s development and financial position. Concordia Maritime has an information policy that satisfies the demands made on a listed company. Financial information is provided regularly in the form of:
- Interim reports, which are published as press releases
- Annual reports
- Press releases regarding important news and events that could have a significant impact on the share price
- Presentations and teleconferences for financial analysts, investors and media on the same day as interim reports and annual reports are published and in conjunction with the publication of other important information
- Meetings with financial analysts and investors
All reports, presentations and press releases are published at the same time on the Group’s website www.concordia-maritime.se
Evaluation of the work of the board of directors
Led by the Deputy Chairman, the board of directors carries out an annual evaluation of its work. The evaluation covers working methods and work climate, the direction of the board’s work and access to and the need of special competence on the board. The evaluation is used as an aid in developing the board’s work and also forms a basis of the nomination committee’s work. The evaluation as a whole for 2008 gave a positive picture of the work of the board of directors.
Evaluation of the work of the board of directors
Concordia Maritime’s board of directors consists of seven ordinary members and three employee representatives, one of which is a deputy. The employee representatives are elected by the trade unions in accordance with Swedish law. None of the board members is a member of the executive management of the company. For information on the board members, see www.concordia-maritime.se and pages 86–87.
Independence
The board is considered to be in compliance with both Nasdaq OMX Stockholm’s regulations and the Code’s requirements regarding independence. All the board members elected by the annual general meeting, with the exception of Dan Sten Olsson and Bert Åke Eriksson, have been considered independent of both Concordia Maritime’s major owners and of the company and its executive management by the nomination committee prior to the annual general meeting in 2009.
Dan Sten Olsson is considered not to be independent of Concordia Maritime’s major owners. Dan Sten Olsson is the principal owner of, among others, Stena Sessan Rederi AB, which holds approx. 52 per cent of the capital and 73 per cent of the total number of votes. Bert Åke Eriksson is the President of Stena Sessan Rederi AB and consequently, he is not considered to be independent in relation to the principal owner.
The work of the board of directors in 2008
In 2008, six ordinary meetings were held together with telephone meetings and a number of per capsulam meetings for decisions on urgent matters. All the ordinary meetings were held in Gothenburg.
At the ordinary meetings, the president gives an account of the Group’s income and financial position, including the prospects for the following quarters. Additionally, investments, the establishment of new business activities and acquisitions and sales are discussed.
The company’s auditor participated in one board meeting in February 2009 when the Final Accounts for 2008 were approved. All the meetings during the year followed an approved agenda, which, together with documentation of each item on the agenda, was given to the members before the board meetings. Karl-Magnus Sjölin, the CFO at Stena Sessan, was the secretary at all the board meetings.
Significant questions during the year
- Strategy questions
- Market assessments
- Financial risks
Salary compensation committeeThere is a salary compensation committee, the main task of which is to propose principles for the remuneration of members of group management. The committee presents proposals for remuneration guidelines regarding:
- Objectives of and reasons for calculating variable compensation
- The relation between fixed salary and variable compensation
- Changes in fixed salaries or variable compensation
- Criteria for the evaluation of variable compensation, long-term incentives, pensions and other benefits
The committee also decides on salaries and other terms of employment for the President. The committee consists of the Chairman and the Deputy Chairman of the board. In 2008, the committee met twice.
Management and corporate structure
The Concordia Maritime group consists of the parent company Concordia Maritime AB (publ) and three subsidiaries, which report directly to the President. The parent company’s organisation is very limited. In principle, the company consists of only its executive management and a small staff. Other functions are purchased from cooperation partners and subcontractors.
President and group management
Concordia Maritime’s group management consists of the Financial Manager and a general manager of the subsidiaries in addition to the President.
The President is appointed by and receives instructions from the board of directors. The President is responsible for the daily administration of the company in accordance with the board’s guidelines and directions, produces information and decision documentation prior to board meetings and acts as a rapporteur at these meetings. The President also has the ultimate responsibility for communication and ensuring the quality of contacts with the company’s cooperation partners.
Pursuant to the rules of procedure, which among other things regulate the relationship between the President and the board of directors, group management is responsible for formulating the Group’s overall strategy, business management, division of financial resources within activities and the Group’s financing and risk management. These tasks also include issues concerning company acquisitions and other major projects. Group management is also responsible for compiling the Group’s financial reports, communications with the stock market and a number of other issues of general interest to the Group.
Remuneration for group management
Concordia Maritime endeavours to offer total remuneration that is both fair and competitive. All its employees receive remuneration in the form of a fixed salary and a prospective bonus. Guidelines for remuneration for the group management are decided by the annual general meeting on the basis of proposals from the board. Remuneration for the President is thereafter decided on by the salary compensation committee. Remuneration for other leading executives is prepared and decided on by the President.
For further information on remuneration, long-term incentives and pension plans, see Note 16 in the financial report.
Audit
The auditor provides an auditor’s report for Concordia Maritime AB’s annual report and consolidated accounts, the administration by the board and the President of Concordia Maritime AB (publ) plus the annual reports for the subsidiaries.
The audit is carried out in compliance with the Swedish Companies Act and audit standards in Sweden in accordance with FAR, which are based on international auditing standards according to the International Federation of Accountants (IFAC). The audit of annual financial statements for legal entities outside Sweden is in accordance with legal requirements and other applicable regulations in the countries concerned and with generally accepted accounting standards as defined by IFAC for the issue of audit reports for the legal entities.
An auditor is proposed by the principal owner and elected by the AGM for a period of four years. At the AGM in 2007, Johan Kratz was elected as the company’s external auditor until the AGM in 2011. He has been an authorised public accountant since 1995 and has the main responsibility for the audit of Concordia Maritime AB. In addition to this assignment, Johan Kratz is in charge of audits at a number of companies such as Akzo Nobel Functional Chemicals AB, Eka Chemicals AB and Nobel Biocare AB. KPMG has been in charge of audits at Concordia Maritime since 1984. The audit comprises mainly an ongoing audit and examination of the annual accounts. KPMG also assists Concordia Maritime AB with advice in the field of accounting. In recent years, this has involved issues primarily relating to the introduction of accounting in accordance with IFRS. Additionally, KPMG has provided assistance in a number of taxrelated issues. No circumstances have been found that are felt to have affected the impartiality and independence of the auditors as a result of this advice.
The auditor’s fee is charged on an ongoing basis. In 2008, KPMG received fees totalling SEK 1.8 million.