- The group’s strategic direction and key strategic initiatives
- Major investments
- The capital structure and dividend policy
- Appointment and dismissal of the CEO
- The delegation of authorities
- The development of group policies
- The overall organization of the group
- The group’s internal control environment and
risk management model
- The core content of the group’s external communication
Instructions for the work of the Board of Directors are set forth in its rules of procedure, which are reviewed and adopted at least once a year. Inter alia, the rules of procedure detail matters to be addressed at ordinary board meetings and regulate the number of ordinary board meetings, agenda items for ordinary board meetings, the duties of the Chair of the Board and the allocation of responsibilities between the Board and the CEO as well as the CEO’s reporting to the Board. The rules of procedure also include instructions for the work in board committees, inter alia stipulating the committees’ duties, the number of committee meetings, the matters to be addressed at the meetings and how the committees shall report to the Board.
Members and independence
The Board of Directors consists of eight members elected by the Annual General Meeting, serving one-year terms, and three employee representatives (with three deputies) from the Swedish operations. A Finnish employee representative is present at the Board meetings, but without voting rights. Marie Ehrling is Chair of the Board. The other members of the Board, elected by the Annual General Meeting, are Olli-Pekka Kallasvuo (Vice-Chair), Mats Jansson, Mikko Kosonen, Nina Linander, Martin Lorentzon, Per-Arne Sandström and Kersti Strandqvist.
In accordance with the guidelines of the Swedish Corporate Governance Code, all members elected by the Annual General Meeting 2015 are considered to be independent in relation to the company, to the administration of the company and to major shareholders.
The members of the Board of Directors are presented in more detail, including meeting attendance, remuneration and holdings of TeliaSonera shares, at the end of this Statement.
Annual work cycle
The work of the Board follows an annual cycle. This enables the Board to appropriately address each of its duties and to keep strategic issues, risk assessment and value creation high on the agenda.
Board meetings are normally held in Stockholm, but one meeting a year rotates between Helsinki, Oslo and Copenhagen. At least one other meeting is held elsewhere to be able to discuss local issues more deeply, make specific site visits, etc. In 2015, Board meetings outside Stockholm were held in Oslo and Gothenburg.
The annual cycle starts with the inaugural Board meeting which is held immediately after the Annual General Meeting. At this meeting, members of the Committees are appointed and the Board resolves on matters such as signatory powers.
Q1 report meeting
At the next ordinary meeting, the Board approves the interim financial report and reviews the risk report for the first quarter of the year.
Strategy input meeting
At the third ordinary meeting, the Board is updated on and discusses various strategic issues.
Q2 report meeting
The Board convenes to approve the interim financial report and review the risk report for the second quarter of the year.
First strategic planning meeting
An ordinary Board meeting focused on the first step of the strategic planning process by discussing the scope and key assumptions.
Q3 report meeting
An ordinary Board meeting is held to approve the interim financial report and review the risk report for the third quarter of the year and to discuss the second step of the strategic planning process – the strategic options. This meeting is also devoted to the annual evaluation of the Board’s internal work.
Business and financial plan meeting
As the final step of the strategic planning process, an ordinary meeting is held for the Board to approve management’s business and financial plan and to discuss target setting for executive management. This meeting also comprises an annual review of the capital structure and dividend policy.
Q4 report and full-year financial results meeting
Following the end of the calendar year, this ordinary Board meeting focuses on the financial results of the entire year and the fourth-quarter financial report and risk report, also including a final decision on target setting for executive management and the dividend proposal for the year.
Annual and Sustainability Report meeting
This ordinary meeting closes the annual work cycle of the Board of Directors by an approval of the Annual and Sustainability Report.
The Board’s Annual Work Cycle
In addition, ordinary Board meetings include:
- An integrated management report by the CEO, comprising:
- Comments on progress towards the long-term ambitions in terms of customers, shareholders, people and sustainability
- Financial performance and an operational update covering competitor, commercial, technology, people, and legal issues
- Updates on strategy issues and on M&A activities, internally as well as industry developments
- Reports on committee work by the respective Committee Chair
- A closed session without management being present
Board work in 2015
In 2015, the Board of Directors held 9 ordinary meetings and 7 extra meetings. In addition to following up on the day-to-day business of the group, the Board of Directors paid special attention to:
- Strategic options, with specific review of the changing business environment in the telecom industry
- Assessment of the operations in region Eurasia, resulting in a decision to reduce the presence in the region and over time fully leave
- Follow-up of major strategic initiatives within the business operations, including for example pricing strategy and fiber roll-out
- Review of the overall sustainability risks for the group, including decisions on new or updated group policies
- Further follow-up of the review of transactions in Eurasia as well as the severe corruption and money-laundering allegations related to the investments in Uzbekistan, currently under criminal investigation by the Swedish Prosecution Authority, by the Dutch prosecutor and police authorities, and by the U.S. Department of Justice and the U.S. Securities and Exchange Commission
- Reviewing efficiency initiatives and cost-reducing programs
- Regulatory developments in the telecom industry
- Structure for target model and financial targets
- Potential acquisitions, joint ventures and increase of ownership in subsidiaries
- Investments in telecom licenses and frequency permits
- Follow-up of CAPEX, in particular related to network investments
- Developments in the associated companies in Turkey and Russia
- Capital structure of the group
- Operating model and organizational issues
- Human Resources issues, in particular succession planning and performance management
Further, the Board of Directors evaluated its internal work during 2015 by self-assessment, based on individually responding to formal surveys and bilateral interviews with the Chair of the Board. The results of the evaluation were reported to the Nomination Committee.
ORGANIZATION OF THE BOARD WORK
Committees and committee work in 2015
To improve board work efficiency, the Board of Directors has appointed a Remuneration Committee, an Audit Committee and a Sustainability and Ethics Committee. The committees prepare recommendations for the Board.
The Remuneration Committee handles issues regarding salary and other remuneration to the CEO and Group Executive Management, incentive programs that target a broader group of employees and succession planning. The Remuneration Committee has the authority to approve remuneration to the members of Group Executive Management, except for the CEO remuneration which is decided by the entire Board of Directors.
The Audit Committee reviews for example financial statements, accounting, internal controls over financial reporting and auditing. The Audit Committee has the authority to decide on audit scope and audit fees and to approve purchase of other services from the external auditors.
The Sustainability and Ethics Committee primarily reviews the sustainability strategy, the progress of the Sustainability Priority Action Plan and the Ethics and Compliance programs as well as the external sustainability reporting.
Members of the board committees
Marie Ehrling is Chair of the Remuneration Committee. In 2015, the Committee held 5 meetings. At each Board meeting following a Committee meeting, the Committee Chair reported on key discussion items and brought proposals on decision items. Committee work included, amongst others, the following issues:
- Structure for target model and financial targets
- Succession planning
- Performance management
- Long-term incentive programs
- Remuneration to the CEO and Group Executive Management
As part of the Board of Directors’ overall assessment, the Remuneration Committee evaluated its internal work during 2015 by self-assessment.
Nina Linander is Chair of the Audit Committee. In 2015, the Committee held 7 meetings. At each Board meeting following a Committee meeting, the Committee Chair reported a summary of the issues raised, decision proposals as well as assessments and reviews performed by the Committee.
When identifying risk areas related to financial reporting, the Committee collaborates with the CEO and CFO, the external auditors as well as the internal audit and internal control functions. Information gathered hereby forms the basis when deciding on future focus areas. Committee work in 2015 included, amongst others, the following issues:
- Overseeing improvements of financial reporting and financial processes, with specific focus on risk identification and assessment of the internal control environment
- Overseeing that the decision to exit Eurasia over time will not negatively impact financial governance, reporting and process efficiency
- Assessment and review of the quality and integrity of risk management, risk assessment and risk reporting
- Reviews of the company’s external financial reporting
- Reviews of important risk areas, e.g. treasury, procurement, taxes, litigation, insurance and IT systems
- Review of the CAPEX process and quarterly follow-up of CAPEX programs
- Reviews of significant accounting policies and key sources of estimation uncertainty, e.g. accounting for discontinued operations and assets held for sale, revenue recognition, valuation of pension obligations, and asset valuation, including the annual impairment testing process and setting of significant testing parameters
- With regards to the external auditors: reviews of audit reports and follow-up of recommended actions, as-sessment and approval of audit plans, closed sessions without management being present, independence and performance assessment, and submitting a nomination proposal for auditor election to the Nomination Committee
- With regards to the internal auditors: reviews of audit reports and follow-up of recommended actions, assessment and approval of audit plans, closed sessions without management being present, and performance assessment
As part of the Board of Directors’ overall assessment, the Audit Committee evaluated its internal work during 2015 by self-assessment.
Sustainability and Ethics Committee
Mikko Kosonen is Chair of the Sustainability and Ethics Committee. The Committee held 5 meetings during 2015. At each Board meeting following a Committee meeting, the Committee Chair reported on key discussion items and brought proposals on decision items. Committee work included, amongst others, the following issues:
- Review of the sustainability strategy
- Map and review of the status of ongoing ethics, compliance and sustainability initiatives in TeliaSonera
- Establish a vision of leadership in sustainability
- Review of the development of the group ethics and compliance function, including forensic capabilities
- Approval of the sustainability priority action plan and regular follow-up, with special attention on status and actions of the anti-bribery and corruption program, including e.g. corruption risk-assessment by country, instructions and training, whistle-blowing tools, etc.
- Reviews of sustainability-related risks in the quarterly risk reports
- Follow-up of the compliance with the OECD Guidelines for Multinational Enterprises
- Review of TeliaSonera’s external sustainability reporting
As part of the Board of Directors’ overall assessment, the Sustainability and Ethics Committee evaluated its internal work during 2015 by self-assessment.