This section describes Securit as ’ view of g o v ernance and ho w the top la y er s of the g o v ernance s tructure interrelate in or der to achie v e efectiv e g o v ernance . This includes such components as g o v ernin g policies, s tr ate g ic decision-makin g and the de v elopment of fr amew orks. Compliance with the S w edish Corpor ate G o v ernance Code (the Code) The section, prepared in accor dance with Chapter 6, Section 6 of the S w edish Annual Accounts Act , pro vides k e y information concernin g compliance with the S w edish Corpor ate G o v er - nance Code , shareholder s, the Annual G ener al M eetin g, Nomination Commit tee , Boar d of Director s and their w ork includin g commit tees, remuner ation and the division of responsibilities throug hout the g o v ernance s tructure . This section also co v er s Securit as ’ sys tem of internal control and risk mana g ement is also co v ered, which is the responsibilit y of the Boar d of Director s accor din g to the S w edish Companies Act and the S w edish Corpor ate G o v ernance Code . This description does not form part of the Annual R eport . In the Internal control section pert ainin g to risk, w e ha v e opted to widen the scope of our description and e xplain ho w enterprise risk mana g ement w orks in the broader per spectiv e re gar dless of the t ype of risk, which means that our focus is not confned to risk related to internal controls o v er fnancial reportin g. F ulfllin g our s tr ate g ies and objectiv es while maint ainin g appropriate risk le v el is imper ativ e , which is wh y risk man- a g ement procedures span all le v els of the or ganization. This section also describes our v arious risk cate g ories and risks requirin g hig h-le v el mana g ement at tention, includin g ho w the y are mana g ed. Securit as ’ mana g ement model is described in this section. The model, called th e T oolbo x, con v e ys our corpor ate culture and creates a shared platform, which ensures that Securit as ’ v alues, w ork methods and mana g ement philosoph y are shared throug h- out the or ganization. This section also cont ains further det ails about the fnancial model, which is specifcally t ailored to Securit as ’ business and is centr al to oper ational mana g ement . The model focuses on the oper ational factor s that impact proft and cash fo w , thus makin g fnancial per formance more tr ansparent for oper ational mana g er s. The section ends with a present ation of Group M ana g ement , which assumes responsibilit y for oper ational mana g ement and carries out the a greed s tr ate g ies. Corporat e Go v ernance 33 Signifcant shareholder s 33 Annual G ener al M eetin g 33 Nomination Commit tee 33 Compliance with the Code 34 Boar d and Audit Commit tee 35 F acts on Boar d of Director s 36 R emuner ation Commit tee 38 Auditor s 39 Internal control and enterprise risk mana g ement 40 Or ganization of internal control 46 Auditor s report on Corpor ate G o v ernance St atement 47 Operational Management 48 Securit as mana g ement model – T oolbo x 48 Securit as fnancial model – Six Fin g er s 50 F acts on Group M ana g ement 52 Go v ernance and Management R ead more at www .securit as. com / corpor ate- g o v ernance Securit as has published its principles for corpor ate g o v ernance in pre vious annual reports. A separ ate section on the Group w ebsite cont ains the Articles of Association and other k e y compan y documents. Securit as Annual R eport 2012 32 G o v ernance and mana g ement Introduction