Composition of the Board
According to the Articles of Association, the Board shall consist of a minimum of three and a maximum of ten directors with a maximum of three deputies. There are no deputy members and no members appointed by employee organisations.
The Chairman of the Board is not employed by the Company, does not receive any salary from the Company and is not eligible for participation in the Company’s incentive programmes. The Chairman is responsible for ensuring that the Board’s work is well organised and conducted in an efficient manner. He further upholds the reporting instructions for management, as drawn up by the CEO and as approved by the Board of Directors, however, he does not take part in the day-to-day decision-making concerning the operations of the Company. All Board members have extensive experience from the world of business and several members are also highly experienced within the oil and gas field.
Board Meetings and Work
In its work, the Board is guided by the Rules of Procedure, which set out how the Board is to conduct its work. The Board of Directors generally holds at least five ordinary meetings per calendar year. At the meetings, the following matters are addressed:
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Review and approval of the minutes from the preceding meeting; |
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Report of the CEO regarding: |
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- status of the business
- prospects
- economic and commercial report
- financial report;
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Reports from the Committees of the Board of Directors |
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Items related to decisions (e.g. concerning investments, acquisition and sale of assets, loans and guarantees and structural and organisational matters) |
The Functions of the Board and its Committees
The Board of Directors’ primary duties are the organisation and management of the Company’s operations and include the following:
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Decisions regarding the focus of the business and adoption of Company policies |
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Decisions regarding supply of capital |
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Appointment and regular evaluation of the work of the CEO and the management |
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Approval of the reporting instructions for the management |
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Ensuring that the Company’s external communications are open, objective and appropriate for target audiences |
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Ensuring that there is an effective system for follow-up and control of the Company’s operations and financial position vis-à-vis established goals |
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Monitoring that operations are carried out within established limits in compliance with laws, regulations, stock exchange rules and generally acceptable behaviour in the securities market |
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Ensuring that the necessary guidelines governing the Company’s ethical conduct are established |
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Ensuring that the Company’s organisation in respect of accounting, management of funds and the Company’s financial position in general include satisfactory systems of internal control |
Board Committees
The Board has established a Compensation Committee, an Audit Committee and a Reserves Committee. The terms of reference of each committee are included in the Rules of Procedure of the Board.
Compensation Committee
The function of the Compensation Committee is to receive information and prepare the Board’s and the AGM’s decisions on issues concerning the Policy on Remuneration and compensation of the CEO and the management of the Company.
The objective of the Committee in determining compensation for management is to provide a compensation package that is competitive and motivating, will attract and retain qualified individuals and will encourage and promote performance. The Committee regularly evaluates the terms of employment of management, taking into account individual performance, responsibilities, length of service and levels of compensation provided by industry companies.
The members of the Compensation Committee are William A. Rand, Chairman of the Committee, Magnus Unger, Dambisa F. Moyo and Kristin Færøvik.
Audit Committee
The function of the Audit Committee is to assist the Board in ensuring that the Company’s financial reports are prepared in accordance with the Swedish Annual Accounts Act and accounting practices applicable to a company incorporated in Sweden and listed on the NASDAQ OMX Stockholm and Toronto Stock Exchange, Canada. The Audit Committee supervises the Company’s financial reporting and the efficiency of the Company’s internal controls, internal audit and risk management. The Audit Committee reviews, on behalf of the Board, the Company’s quarterly (Quarter 1 and Quarter 3) interim financial statements, reviews and makes recommendations to the Board in relation to the Company’s six month and yearly financial statements and ensures maintenance of, and compliance with, the Company’s internal control systems. The Audit Committee regularly liaises with the Group’s external auditors as part of the annual audit process and also reviews the audit fees and the auditors’ independence and impartiality. In addition, the Board of Directors meets at least once a year with the auditors without management, including the CEO, present at the meeting.
The members of the Audit Committee are William A. Rand, Chairman of the Committee, Magnus Unger and Asbjørn Larsen.
Reserves Committee
In connection with the listing of the Lundin Petroleum shares on the Toronto Stock Exchange on 24 March 2011, a Reserves Committee of the Board was created in 2011 in accordance with applicable Canadian securities regulation. The function of the Reserves Committee is to review and report to the Board on matters relating to the Company’s policies and procedures for reporting oil and gas reserves and related information.
National Instrument 51-101 (NI 51-101) issued under applicable Canadian securities regulation prescribes standards of disclosure for oil and gas companies, and assigns certain responsibilities to the Board in respect of the Company’s compliance with NI 51-101. The Board is entitled to delegate certain of its responsibilities under NI 51-101 to the Reserves Committee. In particular, the Reserves Committee is to report to the Board on the Company’s procedures for disclosing oil and gas reserves and other related information, on the appointment of the independent qualified reserves auditor and on the Company’s procedures for providing information to the independent qualified reserves auditor. The Reserves Committee is also to meet with management and the independent qualified reserves auditor to review, and determine whether to recommend that the Board approve, the statement of reserves and other oil and gas information required to be submitted annually under NI 51-101.
The members of the Reserves Committee are Ian H. Lundin, Chairman of the Committee, and Asbjørn Larsen.
The CR/HSE Board Representative
The Board has a supervisory role regarding HSE issues. The Board has decided that a member act as focal point for CR/HSE issues to review HSE management and performance issues, together with management, on an ongoing basis.
The CR/HSE Board representative is Asbjørn Larsen.
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