CORPORATE GOVERNANCE Our corporate governance – direction and control of the Group ÅR Packaging Group AB is a Swedish public company. The company’s governance is controlled via the Annual General Meeting (AGM), the Board and the CEO, and Group management of AR Packaging in accordance with the Companies Act, the Articles of Association and the directives of the Board and the CEO. Representatives from Group management are also included in the Board of Directors of each subsidiary. Corporate governance at ar packaging AR Packaging’s corporate governance is focused on how to govern, lead and control operations aimed at creating value for the company’s shareholders and other stakeholders. Corporate governance strives to create the conditions for active, responsible corporate bodies, clarify allocation of roles and responsibilities and ensure fair reporting and information. Both external and internal regulations provide the foundation for AR Packaging’s corporate governance. External regulations: Swedish Companies Act Swedish Annual Accounts Act Other relevant laws Internal regulations: Articles of Association The Board’s formal procedures The Board’s instructions for the CEO Policies and guidelines Ownership structure During 2015, the two main owners, Ahlström Capital Oy and Accent Equity, acquired the remaining 2% of the shares in the company, which were owned by management and other shareholders. Management subsequently invested in a warrant programme that, if fully exercised, implies an ownership of approximately 5% of the share in the company. After the acquisition of the remaining shares, the ownership structure of ÅR Packaging Group AB as of 31 December 2015 is as follows: Ahlström Capital Oy owns 65% through AC Pack BV. Accent Equity owns 35% through A16 Packaging Ltd. Articles of association The current Articles of Association were adopted at an Extraordinary General Meeting held on 18 June 2013. They specify that the company’s registered office shall be in Lund, that the company is public, the election period for Directors and that each share carries one vote. For more information, see our company website. Annual General Meeting At the AGM, shareholders decide on key issues. They establish financial statements, appropriate the company’s earnings, discharge Directors and the CEO from personal liability, elect Directors and auditors, and decide on the remuneration of Directors and auditors. Pursuant to the Companies Act, notice to attend the AGM of AR Packaging must be issued no earlier than six weeks and no later than four weeks prior to the meeting. Notice is to be issued by advertising in national publications and on the AR Packaging website. To participate in the AGM, shareholders must notify the company of their intent to participate no later than the date specified in the notice. The next AGM of the shareholders of AR Packaging is scheduled on Wednesday 16 March 2016 in Lund. More information about the AGM, notification etc. is available on the company website. Board of Directors The AR Packaging Board of Directors decides on the company’s business direction, strategy, business plan, resources and capital structure, organisation, acquisitions, major investments, divestments, annual and interim reports, and other general issues of a strategic nature. The Board also appoints the CEO, who is responsible for ongoing management in accordance with instructions from the Board. At the extraordinary general meeting on 1 October 2015, it was resolved to elect Tero Telaranta and to remove Panu Routila from the Board of Directors. Accordingly, until the next AGM, the Board members elected by the general meeting, excluding employee representatives, are Harald Schulz, Hans Petersson, Walter Ahlström, Sebastian Burmeister, Marcus Jennekvist, Jan Ohlsson and Tero Telaranta. Directors Directors are elected annually by the AGM for the period until the next AGM. Pursuant to the Articles of Association, the Board is to consist of three to ten Directors, excluding employee representatives. Since the 2015 AGM, the Board consists of seven Directors and four employee representatives (two ordinary and two deputies). The CEO is also a Director and the CFO regularly attends Board meetings, acting as secretary of the Board. The work of the Board At the first regular Board meeting after the AGM, the Board agrees upon a written charter describing the Board’s working practices. The outlined working practices indicate how work should be divided among the Directors and how often the Board should meet. The working practices also regulate such items as the Board’s obligations, a charter for the CEO and the division of responsibilities between the Board and the CEO. During 2015, the Board established separate committees for audit and remuneration issues. The Board meets according to a prearranged annual timetable and additional meetings are arranged if necessary. The Board had twelve minuted meetings in 2015. Committees Audit Committee The Board has appointed an audit committee consisting of Sebastian Burmeister (Chairman), Walter Ahlström and Jan Ohlsson. Key areas of responsibility for the committee include financials, risk assessment, tax position, treasury and financing, litigation issues, currencies and auditors. The committee has scheduled a number of meetings for 2016, partly aligned with the quarterly reporting. Remuneration and HR Committee The Board has appointed a remuneration and HR committee consisting of Tero Telaranta (Chairman), Jan Ohlsson and Hans Petersson.Key areas of responsibility for the committee include employment terms, remuneration and benefits and other operational matters such as organisation and other issues. Remuneration of senior executives Fees and other remuneration of Directors, including the Chairman, are resolved at the AGM. According to a resolution adopted at the AGM on 28 April 2015, the fees paid to Hans Petersson as Chairman are to amount to SEK 220,000, as well as additional remuneration of SEK 110,000, and remuneration to Walter Ahlström is to amount to SEK 110,000. Furthermore, it was resolved that no remuneration would be paid to the other Directors and that remuneration of the auditors would be paid on current account. The remuneration of the CEO and other members of management is paid in accordance with the guidelines for remuneration of senior executives adopted by the Board. Remuneration should reflect market norms and consist of fixed and variable remuneration, other benefits and pension. The annual variable remuneration must in general not exceed the annual basic salary. AR Packaging has not granted any loans, extended or issued any guarantees or provided any security in favour of AR Packaging’s Directors, officers or auditors. None of the Directors, senior executives or auditors has directly or indirectly through an affiliate entered into transactions with AR Packaging. Chief Executive Officer The Chief Executive Officer of AR Packaging is Harald Schulz. The Board has adopted a charter for the CEO’s performance and role. The CEO is responsible for the ongoing management of the Group’s activities in accordance with the Board’s guidelines. As per 31 December 2015, Harald Schulz held 0 shares (26 435) and 91 200 warrants (0) in ÅR Packaging Group AB. No related party of the CEO has any significant shareholding in ÅR Packaging Group AB. Harald Schulz has no ownership in companies with which the company has significant business relations. Corporate management and control Harald Schulz leads the Group’s management and makes decisions in consultation with other members of management, consisting of business managers and heads of Group functions. The Group’s executive management has nine Directors. In 2015, Group management held eleven meetings. The items addressed at each meeting included a financial report, updates from each business area, key issues for AR Packaging regarding operational, strategic or marketing issues, investments and follow-up of these. Meetings also covered the business plan, strategic issues and plans, and the budget for the coming year. The management team addresses both corporate matters and issues related to individual business areas. It makes regular visits to the subsidiaries. In addition to the usual legal requirements that every company must comply with according to the country in which AR Packaging is active, the Group’s financial policies and procedures must be followed regarding reporting and approval requirements, as well as procedures applicable to investments, contract management, etc. Auditing At the AGM on 28 April 2015, the company appointed KPMG as its auditor, with Eva Melzig Henriksson as the auditor-in-charge. The auditor audits the annual accounts and annual report, as well as the company’s ongoing operations and procedures, to obtain an opinion of the financial accounting and the work of the CEO and Board of Directors. The annual report and financial statements are audited in January and February. The auditors participate in one Board meeting during the year connected to the determination of the annual accounts. In October, the auditors conduct an interim review of figures accumulated in September, known as a hard close. Apart from AR Packaging, KPMG has no assignments in companies over which a principal shareholder, a Director or the CEO of AR Packaging has a significant influence. Eva Melzig Henriksson is a Chartered Accountant and a member of the Swedish accounting authority, FAR SRS.