Recommendations to highest governance body (4.4)

The shareholder’s direct influence over the company is exercised at the Annual General Meeting, which is the highest decision-making body in the company. Since 2005, Vattenfall AB holds open Annual General Meetings. The reason for this is to offer not just the owner’s representative but also the general public the opportunity to attend and pose questions to company management directly.

The Swedish government has established a separate division for state enterprises within the Swedish Ministry for Industry, Employment and Communications that, like other owners, governs and issues recommendations by different means, such as:

• Nomination of the Board of Directors, which is the highest governance body;
• Adoption of the Articles of Association, which stipulate the framework for Vattenfall AB’s operations;
• Nomination of auditors;
• Approval of principles for compensation and other employment terms and conditions for board members and senior executives.

In order to clarify the Swedish state’s view on certain issues, and to attain unity among the administered companies, the Swedish government has established a State ownership policy, which forms part of the Swedish government’s annual report on state-owned companies (a link to this policy can be found in the corporate governance section of www.vattenfall.com). The policy regulates the Annual General Meeting, the board nomination process, the composition of the board, assessment of the board’s work, directors’ fees, committee work, the appointment of auditors and the responsibility of the board, among other things. The policy requires Vattenfall AB to apply the Swedish Code of Corporate Governance, however with some exceptions, as described in Vattenfall’s Corporate Governance Report.

The Swedish government has furthermore established guidelines for external reporting, guidelines for terms of employment for senior executives, rules of procedure for the board and for managing certain information-related issues. In addition, the Swedish government has identified certain crucial policy issues concerning social responsibility that state-owned companies shall adhere to. This applies to such areas as equality, the environment, diversity, the work environment and the company’s role in society.