Board of Directors

The Board of Directors is responsible for the company’s organization and the management of the company’s business. The Board is required to continuously monitor the company’s and the Group’s financial position.

The Board is to ensure that the company’s organization is designed in a way that ensures that the financial statements, the management of assets and the company’s financial condition in general are controlled in a satisfactory manner.

The President is appointed by the Board and is responsible for the daily operations pursuant to guidelines and instructions issued by the Board. The distribution of responsibilities between the Board and the President is laid down in the Board’s Procedural Guidelines which are reviewed and adopted each year. The review is based on such aspects as the Board’s evaluation of the individual and collective work that the Board performs.

In addition to financial reporting and the monitoring and follow-up of daily operations and profit trend, Board meetings address the goals and strategies for the operations, significant acquisitions and investments, as well as matters relating to the capital structure. Senior executives report business plans and strategic issues to the Board on an ongoing basis.

Composition

As of 31 December 2019 Sandvik’s Board consisted of eight members elected by the Annual General Meeting. Björn Rosengren left the Board, effective 1 February 2020, in connection with leaving his position as President and CEO. The new President and CEO, Stefan Widing, is proposed to be elected as a new Board member by the 2020 Annual General Meeting.

The Nomination Committee communicated before the 2019 Annual General Meeting that the Nomination Committee had applied rule 4.1 of the Code as the diversity policy. The current Board composition is the result of the work of the Nomination Committee prior to that General Meeting. The Board consists of members with experience from different geographic areas and different industry sectors and, excluding the President, 42 percent of the Board members elected by the General Meeting are women.

Pursuant to Swedish legislation, trade unions are entitled to representation on the Board and they have appointed two members and two deputies.

The Board members are presented in Board of Directors.

Independence

Helena Stjernholm is not regarded as independent in relation to major shareholders in the company and Björn Rosengren was not regarded as independent in relation to the company and its executive management. The other six Board members elected by the General Meeting are all independent in relation to Sandvik and its executive management, as well as the company’s major shareholders. Accordingly, the composition of the Board complies with the independence requirements of the Code.

Board proceedings during 2019

During the year, the Board held fourteen meetings. The Presidents of all business areas presented their goals and strategies. The Board also reviewed the strategies and results from a number of the divisions (all divisions are reviewed in an 18 month rolling period). The Board addressed matters related to the overall Group strategy, long-term financial and sustainability targets, IT, risk management, human resources, such as incentive programs, environment, health and safety, and issues concerning investments and operational restructuring and reviewed previously made investments. Further, the Board handled matters with respect to acquisitions and divestments, such as the sale of Varel Oil & Gas and the internal separation of the Sandvik Materials Technology (SMT) business with an intention to evaluate the listing of SMT as a separate group. The Remuneration Committee, Audit Committee and the Acquisitions and Divestitures Committee reported from their respective meetings. In respect of the Audit Committee, reported matters included ERM, compliance, SpeakUp and Code of Conduct, internal control and internal audit as well as the result of the external audit. The Committees also submitted matters for resolution by the Board and the minutes and reports from these meetings were made available to the Board members. In June 2019 the Board visited Sandvik’s operations in Finland.

Remuneration of the Board

As resolved at the 2019 Annual General Meeting, the fee to the Chairman of the Board is 2,550,000 SEK and the fee to each of the non-executive Board members elected by the General Meeting is 690,000 SEK.

In addition, 300,000 SEK was paid to the Chairman of the Audit Committee and 170,000 SEK to each of the other Committee members, in total 640,000 SEK. The Chairman of the Remuneration Committee was paid 145,000 SEK and each of the other Committee members 115,000 SEK, in total 375,000 SEK. No remuneration was paid to the members of the Acquisitions and Divestitures Committee.

For more detailed information on remuneration of the Board members, see Note 3.5.

Evaluation of the work of the Board

To ensure the quality of the work of the Board and to identify the possible need for further expertise and experience, the work of the Board and its members is evaluated annually. In 2019 the evaluation, which was led by the Chairman of the Board, was carried out by way of each Board member responding anonymously to an online questionnaire. The Chairman also held separate evaluation discussions with all Board members. The compiled results of the evaluations were presented to the Board as well as to the Nomination Committee.