AMF's governance

AMF is a life assurance company. AMF 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. Customers bear the risk of the company, and the company is not permitted to pay dividends to shareholders.

Regulatory structures

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 owners 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 governed 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. However, AMF does not comply with the requirement of Board members' independence of major shareholders. AMF judges that there is no need for a Corporate Governance Report and Report on Internal Controls, in the sense meant by the Code. The background is that the owners should be equally represented on the Board of Directors, and accordingly have complete insight into the work of the Board of Directors. The owners have also decided not to establish a nomination committee.

Each year, the Board appraises its competence and suitability. This process has been developed consistently with the Solvency II Directive. 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 competence is designed to ensure that the Board of Directors' overall competence is sufficient. The appraisal of suitability applies to each Board member. This deals with questions including 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 laws and regulations. The Board decides on AMF's strategy, 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. The Board also receives regular special reports on risk and regulations.

The Board of Directors consists of nine ordinary members with no deputies. Two employee representatives should attend Board meetings. The Board meets at least seven times per year.

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.

The Audit Committee consists of four Board members. Marie Rudberg serves as Chairman of the Committee. 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 receives support from AMF's Internal Audit function. Normally, the company's external auditors and Head of Internal Audit attend Committee meetings.

The Finance Committee consists of four 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, proposing it to the Board and continuously monitoring it. The Committee should also consult on those investment decisions that require approval from the Board of Directors. The Committee's duties also include continuously monitoring that risks in the company's asset portfolio are compliant with applicable solvency restrictions. It should also consult on relevant portions of 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 principles governing compensation and benefits. It also consults on compensation and benefits for the CEO, Deputy CEO, and for other senior managers and central functions. The Committee consults on appraising the competence and suitability of the Board of Directors, senior managers and central functions.

Governance of subsidiaries

AMF Fonder AB and AMF Fastigheter AB are subsidiaries with their own operations. The operations and work of these companies is regulated by their individual Articles of Association and internal policy documents. AMF Fonder AB is also regulated by Swedish mutual funds legislation.

The Board of Directors of the parent company issues owners' directives to subsidiaries. These directives detail the standards the parent company applies to subsidiaries, and how their operations are monitored.

AMF Fonder AB has a Board of Directors that currently has six members. The Chairman and two other Board members are independent of AMF or AMF's owners. Per Bardh is Chairman of the Board (independent).

AMF Fastigheter AB has a Board of Directors that has six members. Three members are independent of AMF or AMF's owners. The Chairman of the Board is Per-Erik Karlsson (Head of Legal Department).

The subsidiaries manage operations that AMF has identified value-added in them being conducted independently, or as required by law. Those parts of operations where there are advantages of coordination or economies of scale with other parts of the group are managed jointly as far as possible. There are agreements between these companies that regulate the purchase and sale of services that comply with internal regulations.