AMF is a life assurance company, which is owned jointly and equally by the Swedish Trade Union Confederation (LO) and the Confederation of Swedish Enterprise, and is managed according to mutual principles. Because customers provide the company's risk capital, and the company is not permitted to pay dividends to shareholders, corporate governance has a special significance.
The most important regulatory structures for corporate governance are the Solvency II legislative program, the Swedish Insurance Business Act and the Swedish Companies Act. The Articles of Association stipulate that AMF may not pay dividends to shareholders. This is also in accordance with the Swedish Insurance Business Act. The Annual General Meeting (AGM) is AMF's highest decision-making body. The AGM appoints the Board of Directors and the company's auditors. The Articles of Association also stipulate that LO and the Confederation of Swedish Enterprise should each appoint a Board member to especially protect insured parties' interests, these being Torbjörn Johansson (LO) and Marie Rudberg (the Confederation of Swedish Enterprise). The AGM appoints the Chairman of the Board. The AGM is held before the end of June each year.
AMF is not formally regulated by the Swedish Code of Corporate Governance. However, the company does comply with the Code in certain respects. The Board of Directors satisfies the Code's requirement of Board member independence of the company and management, but not in terms of members' independence of major shareholders. Because the owners should be equally represented on the Board of Directors, and accordingly have complete insight into the work of the Board of Directors, AMF also does not see the need to produce a corporate governance report as stipulated by the Code. The owners have also decided not to establish a nomination committee for appointing the Board of Directors and auditors. Each year, the Board appraises its competence and suitability in accordance with a predetermined process. The outcome should be communicated to the owners to constitute supporting data for the election and re-election of the Board of Directors. The appraisal of suitability applies to each Board member and includes a review of other assignments, financial integrity and media image. Conflicts of interest should be reviewed each year, and as necessary.
The Board of Directors and its work
The Board of Directors bears ultimate responsibility for AMF's operations being conducted in accordance with applicable laws and regulations. The Board decides on AMF's strategic direction, appoints its CEO and formulates internal regulations. The Board of Directors should ensure that there are appropriate internal regulatory structures for risk management and internal controls. It continuously monitors the company's operations and results of operations. The Board is assisted by an independent internal audit, which reports directly to it. The Board also receives regular special reports on risk and regulations, with more information under Risks and risk management on page 41.
The Board conducted an appraisal of its work in 2017 in accordance with a predetermined process. Its opinion is that the Board has satisfied AMF's requirements of competence and suitability, and that conflicts of interest identified can be managed.
The Board of Directors consists of nine ordinary members with no deputies. The Annual General Meeting 2017 re-elected all Board members apart from Annika Lundius, who was replaced by Torbjörn Callvik. Torbjörn Callvik left the Board on 6 October. His seat was vacant at year-end, and accordingly, as of 31 December 2017, the Board of Directors had eight members. Two employee representatives should attend Board meetings. The Board meets at least six times per year, and held seven meetings where minutes were taken, including the Board meeting following election, in 2017.
The Board of Directors has established three committees, the Audit Committee, Finance Committee and Remuneration Committee. All committees are consultative bodies and do not have the right to make decisions, unless they have been granted a specific mandate.
The Audit Committee normally consists of four Board members. Marie Rudberg serves as Chairman of the Committee. Torbjörn Callvik left of the Board on 6 October. His seat on the Committee was vacant at year-end, and accordingly, as of 31 December 2017, the Committee had three members. The Committee monitors the company's work in preparing statutory financial reporting and systems for internal control. This includes monitoring management of the Board's operational risk and regulatory compliance. The Committee also consults on relevant items relating to the Board of Directors' own risk and solvency assessment. The Committee also receives reports from AMF's Internal Audit function, and from the Compliance and Risk Management functions. Normally, the company's external auditors and Head of Internal Audit attend Committee meetings.
The Finance Committee consists of three Board members. Ola Pettersson serves as Chairman of the Committee. The Finance Committee monitors investing activities and ensures measures taken by the Asset Management function comply with applicable regulations and instructions. The Committee's duties include consulting on an investment plan for asset management, proposing it to the Board, continuously monitoring it and consulting on those investment decisions that require Board approval. The Committee's duties also include continuously monitoring that risks in the company's asset portfolio are compliant with applicable solvency restrictions as stipulated by the Board's rules on risk management, and in terms of investment risks, consult on the Board of Directors' own risk and solvency assessments. The Committee consults, and follows up, on the work conducted within the auspices of AMF's ownership policy.
The Remuneration Committee consists of three Board members. Pär Nuder serves as Chairman of the Committee. The Committee consults on the company's remuneration principles, compensation and benefits for the CEO, Deputy CEO, senior executives, and Head of Internal Audit. The Committee also reports on the CEO's appraisal of senior executives' competence and suitability. In addition, the Committee reports on the CEO's appraisal of the competence and suitability of the managers of central functions, apart from the Head of Internal Audit. The Committee consults on the Board of Directors' competence and suitability.
Governance of subsidiaries
The operational subsidiaries are AMF Fonder AB (AMF Fonder) and AMF Fastigheter AB (AMF Fastigheter). The operations and work of these companies is regulated by their individual Articles of Association and internal policy documents, such as Rules of Procedure for the Board of Directors and Instructions for the CEO. AMF Fonder's operations are also regulated by separate legislation, the Swedish Mutual Funds Act, which regulates how operations should be conducted. The Board of Directors of the parent company issues ownership directives to subsidiaries, which stipulate the standards the parent company applies to subsidiaries from a group perspective, and how subsidiaries' operations are monitored in more detail.
Subsidiaries manage operations where AMF has identified value-added in them being conducted in-house, or when required by law. Those parts of operations where there are co-ordination gains and economies of scale with other parts of the group are managed collectively as far as possible. There are contracts between companies, whereby subsidiaries purchase services from the parent company, and the parent company purchases services from subsidiaries, pursuant to predetermined financial terms and conditions that are compliant with AMF's regulations governing related party transactions.
At year-end 2017, AMF Fonder AB had a Board of Directors with five members. The Chairman and three other Board members are independent of AMF or AMF's owners. The Board members are Per Bardh, Chairman (independent), Camilla Larsson (AMF's Head of Insurance Development), Anders Thorstensson (General Counsel of the Confederation of Swedish Enterprise), Johan Held (independent) and Gunilla Öhman (independent). Ann-Marie Wancke Widemar (independent) left the Board on 4 December 2017 and was replaced by Johan Held. Javiera Ragnartz, AMF's Chief Investment Officer, has been a member of AMF Fonder's Board since 13 April 2017.
AMF Fastigheter has a Board of Directors that has seven members. Four members are independent of AMF or AMF's owners. The Board members are Per-Erik Karlsson, Head of Legal Department of AMF, Agneta Jacobsson (independent), Per-Olov Karlsson (independent), Susanne Lindh (independent), Monica von Schmalensee (independent) and Lars-Åke Bokenberger (AMF's Head of Swedish Equities). Javiera Ragnartz, AMF's Chief Investment Officer, has been a member of AMF Fastigheter's Board since 28 September 2017.
AMF's operational control and management
AMF exercises operational control based on overall business goals. These goals are broken down to entity and departmental level, and then to individual staff development plans. Goals at all levels are monitored regularly. AMF works actively on skills management, such as review interviews, and encourages internal mobility. The company endeavours for 20% of all positions to be filled by internal applicants.
AMF works actively on creating a corporate culture that enables the right decisions to be taken, and the right priorities to be maintained. AMF's corporate culture features the company being managed with the single purpose of creating value for customers. AMF's staff genuinely support and endorse AMF's mission, as is evident in the survey of staff views of AMF's working methods and governance conducted within AMF and AMF Fonder in 2017, where 74 (83)% of respondents stated that they support AMF's strategy. 85 (87)% of respondents indicated that they felt the company always maintained its focus on customers. The response frequency was 92 (90)%. The survey was completed during the transition to a new strategy period, which is one potential explanation for the outcome being lower than the previous survey. Accordingly, when implementing its new strategy, AMF has put a special emphasis on informing and maintaining dialogue on AMF's assignment and strategy. AMF manages continuous communication work on understanding its assignment and customers.
AMF's management has six members.
Name Born in Title Employed in
Johan Sidenmark 1965 CEO 2012
Tomas Flodén 1973 Chief of Staff & Head of Risk 2009
Per-Erik Karlsson 1958 Head of Legal Department 1995
Camilla Larsson 1971 Head of Insurance Development 2004
Javiera Ragnartz * 1969 Chief Investment Officer 2017
Cecilia Rosendahl Lavén 1971 Head of Marketing & Communication 2000
* Effective 27 March 2017.
Principles for determining remuneration and benefits to key individuals in executive positions, and consultative and decision-making processes are stated in note 37 Human resources, see page 98.
Javiera Ragnartz became Chief Investment Officer effective 27 March 2017, after the previous CIO Peder Hasslev left his position. Javiera Ragnartz succeeded Interim CIO Marcus Blomberg. Tomas Flodén resigns as Head of Risk effective 1 January 2018. His successor is Malin Görhammar.