The Board of Directors

The Board of Directors is responsible for the administration of ICA Gruppen’s affairs and the interests of all the shareholders. The duties of the Board include establishing operational goals and strategies; appointing, evaluating and where necessary dismissing the CEO; approving significant assignments held by the CEO outside the Company; ensuring that systems for monitoring and control of operations are effective; ensuring that there is satisfactory control of compliance with applicable laws and regulations; and ensuring that ethical rules have been established for employee conduct. The Board is also to ensure that the provision of information is correct, relevant, reliable and transparent.

According to the Articles of Association adopted at the 2013 Annual General Meeting, ICA Gruppen’s Board of Directors is to have between five and ten members. There are no other rules in the Articles of Association concerning the appointment or removal of Board members. The present Board has ten regular members, see section The Group's Board of Directors. In the previous financial year (2012) the Board had seven members; the Board has thus been expanded by three members. At the 2013 Annual General Meeting Claes-Göran Sylvén was elected as Chairman of the Board. The CEO makes presentations at Board meetings and the General Counsel is the secretary to the Board. In addition to the Board members elected by the Annual General Meeting, the Board has two employee representatives, each with a deputy. The Board members newly elected at the 2013 Annual General Meeting – Claes-Göran Sylvén, Göran Blomberg and Fredrik Hägglund – were members of the management of the Company up until the 2013 Annual General Meeting. They each left their positions in the Company in conjunction with the meeting and became employed by ICA-handlarnas Förbund. At the 2013 Annual General Meeting Anders Fredriksson declined re-election to the Board and Hannu Ryöppönen declined re-election to the Board and as Chairman of the Board.

The Board is made up of individuals with long, sound expertise from ICA and in retail, business development, corporate finance, corporate governance, corporate responsibility, enterprise and social issues.

Independence of Board members

Five of the members of the Board – Margot Wallström, Bengt Kjell, Cecilia Daun Wennborg, Jan Olofsson and Andrea Gisle Joosen – are independent in relation both to ICA Gruppen and its management and to the major shareholders in the company. Combined, they have many years of experience of management and board positions in various listed companies, institutions and organisations. Peter Berlin and Magnus Moberg are ICA retailers and members of the board of ICA-handlarnas Förbund. ICA-handlarnas Förbund is a non-profit association for Sweden’s ICA retailers. According to NASDAQ OMX Stockholm’s Rule Book for Issuers and the rules of the Code concerning independence, Peter Berlin and Magnus Moberg are independent in relation to ICA Gruppen and its management, but not independent in relation to its principal shareholder ICA-handlarnas Förbund. Magnus Moberg and Peter Berlin have each participated in establishing new ICA stores. In conjunction with the establishment of a new ICA store, ICA Sverige AB (a subsidiary to ICA Gruppen) may provide a financing solution to the ICA retailer. Magnus Moberg and Peter Berlin participated in such a financing solution. This does not affect their independence in relation to the Company or their membership of ICA-handlarnas Förbund, and thus does not affect their independence in relation to ICA Gruppen. Up to and including 20 May 2013 Claes-Göran Sylvén, Fredrik Hägglund and Göran Blomberg were members of the Company’s management. Under the Code, therefore, they are not considered independent in relation to the Company and its management. As employees of ICA-handlarnas Förbund since 20 May 2013, Fredrik Hägglund and Göran Blomberg are also not considered independent in relation to the Company’s principal shareholder ICA-handlarnas Förbund. Claes-Göran Sylvén was employed by ICA-handlarnas Förbund in 2013, but left his position on 31 January 2014. In his capacity as an ICA retailer and member of ICA-handlarnas Förbund, however, he is not in any case to be regarded as independent in relation to ICA-handlarnas Förbund.

The work of the Board

The main task of the Board of Directors is to manage the Company’s affairs on behalf of the shareholders such that the shareholders’ interest in a good long-term capital return is satisfied in the best possible way. The main issues of concern to the Board are strategies, risk management and adding value.

The Board’s work is led by a chairman. The work is regulated by the rules of procedure established by the Board each year, and by applicable laws and regulations. The Board has also prepared instructions for the CEO and for its three working committees, as well as other policy documents as guidelines for ICA Gruppen’s employees. Each year the Board reviews the rules of procedure and instructions. The present rules of procedure and instructions were discussed and formally adopted at the Board meeting on 10 June 2013.

As a result of the Company’s acquisition of Ahold’s shares in ICA AB, the operations of ICA AB have been incorporated into the Company. This has occasioned changes to the rules of procedure and its annexes. The intention was to leave as much as possible unchanged, the only exceptions being changes required by the changed operations.

During the 2013 financial year the Board of Directors met 20 times. Eight of the Board meetings were held by the present Board elected on 20 May 2013.

Board committees

ICA Gruppen’s Board has three committees: the Audit Committee, the Remuneration Committee and the Investment Committee. The work of the committees is reported to the Board on a regular basis. The committees are to be regarded as working committees to the Board and do not assume the responsibility that rests with the Board as a whole.

Audit Committee

The Audit Committee’s tasks are to supervise the Company’s accounting and financial reporting, and to monitor the effectiveness of the Company’s internal control, internal audit, risk management and compliance with rules and regulations. The Audit Committee must also keep itself informed concerning the audit of ICA Gruppen and must review and monitor the impartiality and independence of the audit. The Audit Committee assists with the preparation of proposals to the Annual General Meeting concerning the election of auditors. Since the 2013 Annual General Meeting the Audit Committee has comprised Cecilia Daun Wennborg (chair), Bengt Kjell, Göran Blomberg and Magnus Moberg. Matters are presented by the Company’s CFO.

Remuneration Committee

The Remuneration Committee is responsible for the preparation and evaluation of issues regarding remuneration and other terms of employment for ICA Gruppen’s Management Team (IMT), including pay structures, pension plans, incentive programmes and other terms of employment. The Committee also monitor and evaluate the variable remuneration arrangements for the IMT that are ongoing or concluded during the year, and monitor and assess the application of the guidelines for remuneration to senior executives decided by the Annual General Meeting, as well as current pay structures and remuneration levels in the Company. Since 10 June 2013 the Remuneration Committee has comprised Claes-Göran Sylvén (chair), Andrea Gisle Joosen and Fredrik Hägglund.

Investment Committee

The Investment Committee’s main tasks are to review and quality-assure the documentary basis for decisions on acquisitions and divestments, to recommend decisions and to ensure compliance with ICA Gruppen’s Investment Policy. In addition, the Investment Committee has an investment and divestment mandate as set out in the Company’s delegation arrangements. Since 10 June 2013 the Investment Committee has comprised Claes-Göran Sylvén (chair), Jan Olofsson, Margot Wallström and Peter Berlin. 

Matters arising and business dealt with 2013

January

  • Acquisition of Ahold’s shares in ICA AB.
  • Cooperation with Norgesgruppen.
  • Approval of ownership plans for the Portfolio Companies.

February

  • Decision on acquisition of Ahold’s shares in ICA AB.
  • Approval of the financing of the acquisition of Ahold’s shares in ICA AB.
  • Decision to convene an extraordinary general meeting concerning the issue of shares.
  • Decision to change the date of the Annual General Meeting.
  • Approval of the year-end report.
  • Decision to appoint Peder Larsson as CEO of Hemtex AB.

March

  • Decision to appoint new management for the Company, to take effect at the Annual General Meeting on 20 May 2013.
  • Decision to propose to the Annual General Meeting that the share-based incentive programmes be terminated.

April

  • Decision to appoint Per Strömberg as CEO of the Company.
  • Decision to appoint the management of ICA AB as the management of the Company, along with Stein Petter Ski.
  • Approval of the share issue prospectus.
  • Decision on new share issue.
  • Approval of the Q1 report.

May

  • Statutory Board meeting with decisions on delegation arrangements, Audit Committee and Financial Policy.
  • Decision on allocation of new shares.
  • Decisions regarding the MTN programme.
  • Decisions on investments in stores.

June

  • Decision to develop ICA To Go.
  • Decisions on the Investment Committee and Remuneration Committee.
  • Adoption of the rules of procedure, CEO instructions and instructions for the Board committees.
  • Decision to develop the logistics structure, including acquisition of logistics property in Helsingborg.

August

  • Approval of the Q2 report.
  • Training in ICA Gruppen’s various operations.

September

  • In-depth discussion of ICA Norway.
  • Decision to adopt the Tax Policy, Guarantee Policy and Insurance Policy.
  • Decisions on investments in Riga.

November

  • Approval of the Q3 report.
  • Decision to report store sales in Sweden monthly.
  • As a result of the Company’s assessment of the Portfolio Companies it was decided that the Portfolio Companies Forma, Kjell & Co and Cervera are not to be regarded as strategic holdings and may therefore be sold, while Hemtex and inkClub are judged to be capable of contributing to the core business and will thus be retained with their ownership unchanged.
  • Decision on new non-food strategy. 
  • Decision to sell Forma Books.
  • The Board of Directors adopted the following long-term financial targets:
    - To grow faster than the market
    - Operating margin (EBIT) of 4%
    - Return on capital employed (ROCE) of 9%
    - Net debt/EBITDA <2.0
    - Dividend 50% of profit after tax

December

  • Decision to sell commercial properties in Linköping and Älmhult to Ancore Fastigheter AB. 
  • Decision to issue unlisted preference shares in ICA Fastigheter Sverige AB to a total value of SEK 3 billion.

Conflicts of interest

The rules of procedure of ICA Gruppen’s Board of Directors state that the CEO and the Board members must not deal with matters relating to agreements between themselves and the Company or matters between the Company and third parties if the person in question has a significant interest that could conflict with the Company’s interests.

Internal Audit

The Company has an Internal Audit function. This is an independent, objective function that works according to instructions from the Board and reports to the Audit Committee. Internal Audit performs audits on corporate governance, risk management and the management and control of ICA Gruppen’s business processes. Each year the Audit Committee draws up a risk-based plan for Internal Audit work to ensure that it focuses on the areas where most value can be added to ICA Gruppen.

Internal Audit reviews how ICA Gruppen’s operations are working in Sweden, Norway and the Baltic countries and how the Group can be developed from a management and control perspective. Audit of stores is a special area within the review of business processes. Internal Audit did not review the Portfolio Companies in 2013, but the Portfolio Companies that will remain part of the Group – i.e. Hemtex and inkClub – will be included in Internal Audit’s reviews with effect from 2014.

The observations and recommendations made by Internal Audit aim both to reduce the level of risk within a business area and to increase efficiency and improve ICA Gruppen’s processes. It is the responsibility of the respective management team to put in place appropriate action plans in respect of the recommendations made by Internal Audit. An important part of Internal Audit’s work is to follow up the action plan quarterly.

Internal Audit reports quarterly to ICA Gruppen’s Audit Committee, which in turn reports to the Board. The reporting covers the audits carried out during the past quarter and the status of the action plans.

Evaluation of the Board

An evaluation of the Board is carried out every year in order to develop the work of the Board and provide a basis for the Nomination Committee’s evaluation of the Board’s composition. The evaluation of the Board in 2013 took the form of members completing a questionnaire and having individual conversations with the Chairman of the Board. The evaluation showed that the Board is functioning efficiently and is a well-composed group of highly committed individuals. Each of the members contributes broad expertise and many years’ experience in various areas that are relevant to ICA Gruppen’s operations.

Remuneration to the Board of Directors

The Nomination Committee submits proposals to the Annual General Meeting for resolutions on Board fees.

The 2013 AGM approved the Nomination Committee’s proposal concerning fees. Information on Board fees in 2013 can be found in Note 4 for the Group and on The Group's Board of Directors.

The Nomination Committee is proposing to the 2014 AGM that the fees to the Board should amount to SEK 3,780,000 (3,550,000) in total, which is an increase of SEK 230,000 compared with 2013. The Nomination Committee proposes that the fees are distributed as follows: SEK 900,000 (850,000) to the Chairman of the Board and SEK 320,000 (300,000) to each of the other members. The Nomination Committee also proposes that a provision of SEK 900,000 (825,000) is made for committee work in 2014, to be distributed as follows: For work on the Audit Committee, compensation totalling SEK 425,000 (300,000) shall be paid, of which SEK 170,000 (150,000) to the chairman and SEK 85,000 (75,000) to each of the other members. For work on the Remuneration Committee, fees totalling SEK 175,000 (175,000) shall be paid, of which SEK 75,000 (75,000) to the chairman and SEK 50,000 (50,000) to each of the other members. For work on the Investment Committee, fees totalling SEK 225,000 (175,000) shall be paid, of which SEK 75,000 (75,000) to the chairman and SEK 50,000 (50,000) to each of the other members. A total of SEK 75,000 (175,000) will be held in reserve to give the Board the capacity to appoint up to three additional committee members or create additional Board committees.For full details of the Nomination Committee’s proposals refer to the notice convening the Annual General Meeting.

Auditor

According to the Articles of Association, the Annual General Meeting shall appoint a minimum of one and a maximum of two auditors, or one or two registered public accounting firms. The audit firm Ernst & Young AB was elected auditor on the Annual General Meeting 2010 for a term of four years up unitl the Annual General Meeting 2014. Ernst & Young AB has consequently audited the Company’s accounts for 2013 and authorised public accountant Thomas Forslund was the auditor in charge.

Thomas Forslund attended one Board meeting to present Ernst & Young AB’s audit process for ICA Gruppen and to give Board members an opportunity to ask questions without management being present.