Corporate governance

Group governance is based on the Swedish Companies Act and other relevant legislation, the Articles of Association, the listing agreement with NASDAQ OMX Stockholm, the recommendations of the Swedish Industry and Commerce Stock Exchange Committee and the Swedish Code of Corporate Governance (the Code).

Peab applies the Code in accordance with the listing agreement with NASDAQ OMX Stockholm.

The Board of Directors and its work
According to Peab’s Articles of Association the board of directors must be made up of no fewer than five and no more than nine members in addition to the statutory employee representatives. The members of the board of directors are elected annually by the AGM. Members of the board of directors have no specific retirement age nor is there a limit on the time a member of the board may hold his or her post.
13 meetings of the board of directors were held in 2006 (incl. one inaugural meeting), of which five were ordinary meetings of the board, three meetings of the board were held by telephone and three by letter or mail.

Members of the group management submitted reports at the meetings of the board of directors. The company auditor respective deputy auditor were present at two of the meetings of the board. The work of the board of directors accords with the rules of procedure for the board of directors adopted by the board of directors at the inaugural meeting. The members of the board of directors elected by the shareholders are compensated in accordance with decisions taken by the AGM.

Group management
The Managing Director leads the company in accordance with the framework established by the Board of Directors and is responsible for day-to-day control of the company. By working with one management forum throughout the Group, more effective decision-making and improved communication is achieved. The management forum is divided up into the Executive Management and the Management Group.

The Executive Management consists of the MD and Deputy MDs of Peab AB. Meetings are held once a month and deal with issues relating to strategy and development for improved profitability.

The Management Group consists of the Executive Management, operational managers and support functions. Meetings are held once a quarter and deal with issues focused on structure and co-ordination.

The audit committee
The audit committee prepares the work of the board of directors by assuring the quality of the company financial reports, establishing the guidelines for which other services besides auditing the company may outsource to the company auditor, evaluating the auditing work and informing the nomination committee of the evaluation and assisting the nomination committee in producing proposals for auditors and remuneration for auditing work. The auditing committee met twice in 2006 and all members of the committee attended on both occasions. The company auditor and deputy auditor each attended on one occasion. The audit committee regularly reports to the board of directors.

The finance committee
The finance committee manages and takes decisions in financial matters in accordance with the finance policy established by the board of directors. Representatives of the company management attend  and submit reports at the meetings of the finance committee. The finance committee met on one occasion during 2006, were all members participated. The finance committee regularly reports to the board of directors.

The remuneration committee
The remuneration committee draws up guidelines and the framework for salaries and other terms of employment for the group’s executives. The remuneration committee met on one occasion during the financial year, where all members in the committee participated. The remuneration committee regularly reports to the board of directors.

Management of business units
Peab’s organisation is characterised by production focus with clear decentralisation and delegation of powers and responsibility with a view to obtaining efficient management and control within the respective business units. The support functions support the activities of the entire Peab Group.