The Commit tee ’ s scope of w ork is es t ablished in the Procedure and Ins tructions for the Nomination Commit tee of Securit as AB. The Commit tee should hold meetin g s as often as necessar y to ful fll its duties. Ho w e v er , the Commit tee should hold at leas t one meetin g annually . The Commit tee met once in 2012. M ember s of the Boar d of Director s Accor din g to the Articles of Association, the Boar d of Director s should ha v e bet w een fv e and ten Boar d member s elected b y the Annual G ener al M eetin g, with no more than t w o Deput y Director s. The Director s and Deput y Director s are elected b y the Annual G ener al M eetin g for the period up to and includin g the fr s t Annual G ener al M eetin g to be held in the y ear after the Director or Deput y Director w as elected. Securit as ’ Boar d of Director s has eig ht member s elected b y the Annual G ener al M eetin g, three emplo y ee represent ativ es and one deput y emplo y ee represent ativ e . The Annual G ener al M eetin g 2012 re-elected F redrik Cappelen, Carl Doug las, M arie E hrlin g, Annik a F alk en gren, Alf G or ansson, F redrik Palms tierna, M elk er Schorlin g and Sofa Schorlin g Hog ber g. The Annual G ener al M eetin g re-elected M elk er Schorlin g as Chairman of the Boar d and Carl Doug las as V ice Chairman. Mik ael E k dahl, at torne y -at -la w , is the secret ar y of the Boar d. F or further information about the member s of the Boar d of Director s and the President and CEO , see pa g es 36–37. It w as resolv ed that the fees to the Boar d should tot al SEK 4 700 000 (includin g fees of SEK 450 000 for commit tee w ork), to be dis tributed amon g the Boar d member s as follo ws: Chairman of the Boar d: SEK 1 000 000; V ice Chairman of the Boar d: SEK 750 000; and each of the other Boar d member s (e x cept the President and CEO and emplo y ee represent ativ es): SEK 500 000. R esponsibilities of the Boar d of Director s The Boar d of Director s is responsible for the or ga- nization and adminis tr ation of the compan y and the Group in accor dance with the S w edish Companies Act and also appoints the President and CEO , the Audit Commit tee and the R emuner ation Commit tee . In addition, the Boar d of Director s determines the President and CEO ’ s salar y and other remuner - ation. The Boar d meets a minimum of six times annually . The Group ’ s auditor s participate in the meetin g of the Boar d of Director s that is held in con junction with the y early closin g of the books. The Boar d assures the qualit y of fnancial report - i n g throug h a series of Group policies, procedures and fr amew orks, clear s tructures with defned responsibilities and throug h documented dele gation of authorit y , which is further described in the Internal Control R eport . ELECTED MEMBERS , 1 NO MINA TION C O MMIT TEE ¦ Gus t af Doug las, ma jor shareholde r , 30.02% 2 ¦ Mik ael Ek dahl, M elk er Schorlin g AB (ma jor shareholder), 11.75 % 2 ¦ Jan Ander sson, S w edbank R obur F unds, 2.82% 2 ¦ Henrik Didner , Didner & G er g e , 2.04% 2 ¦ Johan St ahl, L annebo F onder , 2.61% 2 ¦ Share of v otes not represented in the N omination Commit tee , 50.76 % 2 1 At the Annual G ener al M eetin g held on M a y 7, 2012. 2 Share of v otes as of M a y 7, 2012. Compliance with the S w edish Corpor ate G o v ernance Code (the Code) As a S w edish public compan y lis ted on NASD A Q O MX Stockholm, Securit as applies the S w edish Corpor ate G o v ernance Code (the Code). Securit as complies with the Code principle of “ comply or e xplain ” and has t w o de viations to e xplain for 2012: Code R ule 7.3 An audit commit tee is to comprise no few er than three boar d member s. Comments: The Boar d of Director s deems that t w o member s is sufcient to correctly address Securit as ’ mos t import ant areas in re gar d to risk and audit issues, and that the incumbent member s ha v e lon g -s t andin g and e xtensiv e e xperience in these areas from other ma jor lis ted companies. Code R ule 9.8 F or share-based incentiv e progr ams, the v es tin g period, or the period from the commence- ment of an a greement to the date on which the shares are acquired, is to be no less than three y ear s. Comments: The implement ation of the Securit as Share-based Incentiv e Scheme in 2010, which has been renew ed annually since then, w as based on the then-e xis tin g bonus s tructure of the Securit as Group . In simple terms, the bonus potential w as increased in e x chan g e for a one-time salar y free z e and one thir d of the cash bonus outcome w as to be receiv ed in shares in M arch of the y ear follo win g the y ear in which the cash bonus w ould ha v e been paid out , pro vided that the per son remained emplo y ed b y Securit as at such time . Since the progr am replaces an immediate cash b o n u s pa y out and is not gr anted in addition to already e xis tin g bonus rig hts, the Boar d deems that the t w o- y ear period from the commencement of the progr am until the release of the shares is w ell motiv ated and reasonable in or der to achie v e the purpose of the progr am. 34 Securit as Annual R eport 2012 G o v ernance and mana g ement Boar d of Director s ’ report on corpor ate g o v ernance and internal control