Corporate bodies in corporate governance

The governance and control of the Volvo Group is carried out through a number of corporate bodies. At the Annual General Meeting, the shareholders exercise their voting rights with regard, for example, to the composition of the Board of Directors of AB Volvo and election of external auditors and as otherwise stipulated in the Companies Act. Information concerning the largest shareholders in AB Volvo as of December 31, 2011, including information on shareholders, whose shareholdings in the company represent at least one tenth of the votes for all shares in the company, is provided in the Board of Director’s report for Volvo.

The notice for Annual General Meetings (and for Extraordinary General Meetings if any) is made through advertisement in the Post- and Inrikes Tidningar (Swedish Official Gazette) and on the company’s website. Announcement that the notice has been published is advertised in Dagens Nyheter and Göteborgs-Posten.

An Election Committee, appointed by the Annual General Meeting of AB Volvo, proposes Board members, Board Chairman and external auditors. The Board is responsible for the Group’s long-term development and strategy, for regularly controlling and evaluating the company’s operations and for the other duties set forth in the Companies Act. In addition, the Board appoints the President of AB Volvo, who is also the Chief Executive Officer (CEO). The duties of the Board are partly exercised through its Audit Committee and its Remuneration Committee. The CEO is in charge of the daily management of the Group in accordance with guidelines and instructions provided by the Board.

On January 1, 2012, the Volvo Group introduced a new organization, which was presented on October 4, 2011, and which among other things aims at the coordination of products and brands in the Group’s Trucks operations. In the new organization, the CEO leads the operations of the Group partly through the Group Executive Team, as previously, but also through the newly established Group Trucks Executive Management Team. In addition, the CEO conducts regular follow-ups with the heads of other business areas, Group functions and corporate functions.

   The Group Executive Team comprises those who report directly to the CEO. The Group Executive Team has 16 members including the CEO. The Group Executive Team meetings, which are headed by the CEO, address Group-wide issues and issues affecting individual business areas, Group functions or corporate functions. The Group Trucks Executive Management Team comprises, in addition to the CEO, mostly members of the Group Executive Team. Members of the Group Executive Team further have positions in management teams and decision-making bodies for other business areas and Group functions. These bodies will effect control and follow-ups of financial development, strategies and targets as well as make decisions regarding, for example, investments.