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Corporate governance

SEK has a highly developed corporate governance system in place to meet the Swedish state’s requirements for return on equity and an effective operation.

Articles of Association

The owner (the Swedish state) decides by way of the Articles of Association, the company’s operational objectives and specific stated frameworks for operations. However, the direction of operations is decided on by Swedish parliament.

The work of the Board of Directors

The tasks of the Chairman are based on the Swedish Companies Act and the Boards’ rules of procedure.

The Board of Directors establishes annual rules of procedure which regulate reporting to the Board, the frequency and composition of Board meetings, as well as the delegation and evaluation of the work of the Board and of the CEO.

In addition to appointing the CEO, the Board’s primary tasks are to establish the business plan and the budget, approve major investments and significant changes to the company’s organization, as well as to establish central policies. In addition, the Board monitors financial performance and has the ultimate responsibility for internal control and risk management.

The Board is responsible for SEK’s financial reporting. The quality is ensured by the Board of Directors reading and submitting points of view for proposals on interim reports and annual reports prior to publication. At Board meetings, issues are addressed that have a material impact on financial reporting.

The Board Committees

Credit Committee

The Committee prepares matters relating to credits and credit decisions that are of fundamental or otherwise significant importance to SEK. Additionally, the Committee must, in other cases, make credit decisions without any particular restriction concerning credit exposure and credit rating. At the request of the Board, the Committee has issued a Credit Instruction, which has been reported to the Board. The meetings of the Credit Committee are reported by the Committee’s Chairman at the next Board meeting. The Board also receives the minutes from the meetings.

Finance and Risk Committee

The Finance and Risk Committee acts as the Board’s preparatory group by preparing matters pertaining to general policies, strategies and risk appetite in all risk and capital-related issues. Other duties of the Committee include (i) resolving certain limits for risk and capital-related matters, (ii) ensuring that equity, regulatory requirements and credit ratings are handled in such a manner that supports our business strategy, profitability and financial strength, and (iii) following up on how previously made decisions regarding general risks, strategies and limits have been adhered to.

At the request of the Board, the Committee has issued a Finance Instruction, which has been reported to the Board. The meetings of the Finance and Risk Committee are reported by the Committee’s Chairman at the next Board meeting. The Board also receives the minutes from the meetings.

Remuneration Committee

The Remuneration Committee prepares matters relating to salaries and other benefits for executive management, and general policy issues relating to salaries and other benefits. The Committee decides on salary and benefits for executive management (with the exception of the CEO).
The Board of Directors has established a remuneration policy as an instruction for the Remuneration Committee. The minutes of the meetings of the Committee are submitted to the Board and reviewed at the Board meeting.

Audit Committee

The Audit Committee is a preparatory body for the Board’s work to assure the quality of the company’s financial reporting and to keep itself informed about how the company’s policies for internal control are complied with. The meetings of the Audit Committee are reported by the Committee’s Chairman at the next Board meeting. The Board also receives the minutes from the meetings.

The work of the Auditors

The Board decides an annual letter of engagement concerning the format of the auditors’ work. The auditors study the written material during the year that has been sent to the Board. They also examine the minutes from the Board and Committee meetings.
The auditors participate in at least one of the Board meetings per year. Additionally, SEK’s CEO has regular meetings with the auditors during the year. At these meetings, the focus and scope of the audit is discussed, as well as the coordination of internal and external audits, internal control, key audit matters and the financial reports that SEK submits.

Remuneration system

The Board of Directors’ Remuneration Committee prepares proposals for decision by the Board relating to the human resources policy, on total remuneration for the CEO, for other members of the executive management, for the Head of Compliance, and for other employees reporting directly to the CEO, as well as on the terms and conditions for and the outcome of the company’s remuneration system. The Remuneration Committee also prepares and handles overall issues relating to remuneration (salaries, pension and other benefits), measures aimed at following up the application of the human resources policy, and issues relating to succession planning.

The Remuneration Committee ensures that the relevant department for control, together with the Remuneration Committee, annually reviews and evaluates the company’s remuneration systems and also reviews whether such systems comply with the company’s human resources policy and relevant instructions regarding remuneration. The outcome is presented to the Board of Directors in a separate report on the same day as the annual report is submitted.

Individual Variable Remuneration (IVR)

The IVR is discretionary and decisions on outcomes and disbursements are made by the Board. All disbursed amounts are subject to deferred disbursement. Before an individual receives any IVR payment, this is subject to testing at three different levels: company, department and individual.

Each included individual is assessed on their performance and behavior on an individual and a functional level. IVR to an individual can amount to three monthly salaries at the highest, excluding payroll tax and pension benefits. Total variable remuneration for the function and for the company may not exceed the sum of two monthly salaries for all who are encompassed by the IVR. The variable remuneration can be determined to be zero at the company, function, and individual level.

The company will apply a deferred disbursement. The first disbursement of 40 percent is paid one year after the year in which the IVR was vested, and thereafter in three disbursements of 20 percent each in each of the three following years. If it transpires that the performance criteria have not been fulfilled, or if credit losses have arisen or recoveries of credit losses that are deemed to be attributable to the vesting year, or if the employee has acted in significant breach of internal regulations, or the disbursement cannot be justified with regards to the company’s financial position, then an adjustment of previously determined remuneration will be made. Disbursements must be authorized by the Board. The company pays payroll taxes on any IVR paid, which also carries pension entitlements.

Employees whose work duties have a material impact on SEK’s risk profile

As part of its strategic analysis and planning, the company undertakes an annual process for internal capital and liquidity assessment processes. As part of this evaluation, an analysis is conducted with the aim of identifying employees whose work duties have a material impact on SEK’s risk profile, including risks related to the company’s human resources policy and remuneration system. The outcome of this analysis is taken into account when designing the remuneration systems in order to promote sound and efficient risk management and to restrict excessive risk-taking. For additional information, refer to the annual report.

More on the Board’s competence and suitability

In the Swedish FSA’s regulation FFFS 2014:1, that applies to the company, it is stated that companies must explain how the Board, the Board members and the CEO meet requirements in terms of knowledge, insight, experience and suitability. In view of this, the following information is submitted:

As part of SEK’s human resources policy, which is issued by the Board, it is stated that SEK, in conjunction with the election of its Board members, the appointment of its CEO as well as members of executive management or managers for independent control functions, will make a suitability assessment with the purpose of making sure that the individuals in these positions are suitable for their respective assignment or post. Such a suitability assessment will also be made at another time if deemed necessary.

The suitability assessment of the Board members should, if possible, be made before the members take up their positions and be available for the owner when deciding on the nominations. The suitability assessment of the CEO and senior executives must be carried out before they are appointed.
The suitability assessment is made by taking into account the individual in question’s competence, experience, reputation and judgment. The Board members are appointed in accordance with “The state’s ownership policy and guidelines for companies with state ownership”. The Board members must have a high level of competence that is well adapted to SEK’s operations, circumstances and future challenges. Additionally, the members should possess a high level of integrity and good judgment, which can be expected from a representative of the Swedish state. Every Board member should possess the ability to look after the best interests of SEK and be able to make independent assessments of SEK’s operations. It’s necessary that the Board has the ability to work strategically with sustainability issues, which are of high importance.

The Board members should maintain independence and maintain a high level of integrity. The Board members may not enter into any arrangement with SEK or its management whereby their independence is brought into question. Upon the assessment of a Board member’s experience, special attention is given to their theoretical and practical experience of financial markets, legal frameworks and requirements, strategic planning and understanding of a credit institute’s business strategy or business plan and how it is carried out, risk management, assessment of the efficiency of the credit institute and their ability to produce efficient governance, supervision and checks as well as their interpretation of the financial information of the credit institute and ability to identify important issues on the basis of this information as well as suitable control measures. For the assessment of practical and professional experience, the length of employment, scope of areas of competence, authorization rights and area of responsibility as well as the number of employees are to be taken into account.

The CEO must have a high level of competence that is well adapted to SEK’s operations, circumstances and future challenges. The CEO must possess fundamental integrity, sound judgment and the ability to look after SEK’s best interests. The CEO must possess good market knowledge, a focus on the customer and on profitability, and experience of running financial companies. The CEO is to be concerned with and have experience with sustainability issues, possess a high moral character and a good understanding of risk and regulatory compliance issues, financial analysis and income statement and balance sheet issues with financial operations. The CEO must possess strong leadership qualities and a good ability to represent SEK in external circumstances as well as in the media.

Catrin Fransson, CEO

Upon the assessment of a CEO’s experience, special attention is given to their theoretical and practical experience of financial markets, legal frameworks and requirements, strategic planning and understanding of a credit institute’s business strategy or business plan and how it is carried out, risk management, assessment of the efficiency of the credit institute and their ability to produce efficient governance, supervision and checks as well as their interpretation of the financial information of the credit institute and ability to identify important issues on the basis of this information as well as suitable control measures. For the assessment of practical and professional experience, the length of employment, scope of areas of competence, level of decision making and area of responsibility as well as the number of employees is taken into account.

The company’s Board members are elected by the owner at the general meeting of shareholders for a period of one year. The owner and the company believe that all current Board members meet the requirements in terms of requisite knowledge, experience and suitability that is established in the external regulations and in the above described internal instruction of the company. The Board members possess, inter alia, many years’ experience from leading positions in part with respect to extensive financial and industrial operations with an international orientation, in part with respect to export-promotion and in part with respect to corporate governance. The company’s annual report contains each Board member’s year of birth, education, the first year of their election to the Board, previous positions, other assignments and current assignments when applicable. This information is also available on SEK’s website under the picture of each respective Board member.

The Board, who appointed Catrin Fransson as the company CEO in 2013, believes that she more than meets the requirements in terms of the requisite knowledge, experience and suitability that is established in the external regulations and in the human resources policy.

Deviations from the Code

SEK’s corporate governance deviated from the Code on the following points in the 2012 fiscal year :

Nomination Committee

Owing to its owner structure, SEK lacks a Nomination Committee. The nomination procedure complies instead with the Swedish state’s ownership policy (link to ownership policy).

Chairman of the Annual General Meeting

Owing to its owner structure, SEK lacks a Nomination Committee that is able to make proposals for the nomination of the Chairman of the Annual General Meeting. The election of the Chairman of the Board takes place at the Annual General Meeting instead, in accordance with the provisions of the Swedish Companies Act . This is also in line with the Swedish state’s ownership policy.

Appointment of auditors

The nomination process for auditors adheres to the principles described in the state’s ownership policy.

The Board of Directors’ independence from the owner

SEK does not disclose whether members of the Board of Directors are independent in relation to the owner. This is in accordance with the state’s ownership policy, which makes clear that nominations to the Board must be published in accordance with the Code’s guidelines, with the exception of the reporting of independence to the major owners. In entirely state-owned companies, there is no reason to report on independence since there is no minority interest to consider.

Documents

  1. Notice to attend the Extraordinary General Meeting in Aktiebolaget Svensk Exportkredit

    Download pdf (opens in a new window)
Karl Johan Bernerfalk General Counsel, SEK

Would you like to know more?

Contact Karl Johan for more information.

karl-johan.bernerfalk@sek.se

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