CORPORATE GOVERNANCE REPORT CHAIRMAN OF THE BOARD ON CORPORATE GOVERNANCE Focusing of operations The turbulent economic environment in recent years has shown that the Trelleborg Group’s long-term strategy is effective in both good times and bad. U creation and we can see the effect of this in, for example, the positive sales and earnings trend of recent years. On this basis, the Board continued its issues to ensure the continued focus of operations on those markets and !!" One important step was the agreement that Trelleborg signed with Freudenberg concerning a joint company in antivibration solutions. The new company will become a global leader with strong competitiveness and good growth potential. Securing the best legal and operational platform was an “The Board has devoted time #$! when the new company is planned to be operational. The agreement with and energy to the long-term Freudenberg opens new strategic perspectives for Trelleborg. The Board has market and structural issues devoted time and energy to the long-term market and structural issues that will ensure continued growth based on market penetration, complementary that will ensure continued acquisitions and divestments in polymer solutions. growth based on market During the second half of the year, the global economic recovery was once again hit by growing uncertainty, mainly due to debt problems in the penetration, complementary eurozone. As a result, the Board’s work in Trelleborg became gradually more acquisitions and divestments focused on heightened vigilance and decision preparedness in anticipation in polymer solutions.” of the impact on demand that a weakening economic trend can bring. U %$U an agreement for a new revolving credit facility, which will form a solid base &'!V) forward. The Group’s capital structure remained healthy, with a level of net !!*+ /" 0U Corporate governance and responsibility issues play a major role in the Board’s daily work. There must be a good balance between developing the Group’s business opportunities, and identifying and managing the risks posed by an increasingly complex and dynamic business environment. The number of internal audit programs was increased and the focus was on business-sup- porting initiatives for the operations in high-growth countries. This concentra- !!" Openness and transparency are key conditions for an effective and sound governance and control culture. The Board monitors the continued development of various processes for external communication and information related to external stakeholder groups to ensure that this is conducted in accordance with relevant laws, regulations and standards. In a similar fashion, the Group is working toward continuous improvements in the quality of content and channels for all types of internal communication, so that this can play #! $U&" Anders Narvinger Chairman of the Board 34 Annual Report 2011 Trelleborg AB GRI: 4.1, 4.5 CORPORATE GOVERNANCE REPORT CORPORATE GOVERNANCE Trelleborg is a publicly traded Swedish limited liability company listed on NASDAQ OMX Stockholm. Trelleborg applies the Swedish Code of Corporate Governance 0&" no deviations to report. The report has been examined by the company’s auditor. Shareholders $'?'U'=W! Annual General Meeting attendance 2007-2011 in attendance, personally or by proxy, rep- % Number Share capital in Trelleborg amounts to <U'=W 100 1,000 SEK$'M, represented by total number of votes. A single share- <$<$<=$! 80 800 holder, Dunker Funds and Foundations, value of SEK"'<" 60 600 )<' Trelleborg has two classes of shares: U<W" 40 400 $?$@H Chairman of the Board, Anders Narvinger, /$?<$<=@J"@H 20 200 was elected Chairman of the Meeting. shares carry ten votes and Series B All Board members elected by the 0 0 shares carry one vote. All Series A 20072008 2009 2010 2011 Annual General Meeting were present. Votes, % Persons, number shares are owned by the Dunker Funds and Foundations, which comprise a Resolutions number of foundations, funds and man- The minutes from the Annual General Number of shareholders, December 31, 2007-2011 agement companies created through Meeting have been made available on Number testamentary disposition by former owner Trelleborg’s website. The resolutions 50,000 and founder of the Helsingborg and passed by the Meeting included the Trelleborg rubber-production plants, 40,000 following: L%#$!'" 30,000 At year-end, the number of share- % 20,000 !?$?<U/$<?W" year as per the Board’s and President’s Of the total number of shares, foreign proposal in the amount of SEK"<? 10,000 share. shareholders accounted for approximately 0 2007 2008 2009 2010 2011 =UW"Y Re-election of all Board members. for the majority of ownership. At the end Number of shareholders $''U</W Re-election of Anders Narvinger as number of shares were owned by legal Chairman of the Board. Ownership structure, December 31, 2007-2011 $=/U'W- Fees to the Board members and % 100 viduals. remuneration of the auditor. For further information on the share 80 $ Principles for remuneration and other 60 = !" employment terms for the President and other senior executives. 40 Annual General 20 Z Procedures for the Nomination Committee’s appointment and work. 0 The Annual General Meeting took place 2007 2008 2009 2010 2011 H$"H Swedish shareholders, % Foreign shareholders, % Further information on corporate governance The following information is available at www.trelleborg.com [0&$/!" Information regarding Trelleborg’s Annual General Meetings since /!\ ^H&Z – Minutes of AGM – President’s presentations – Press release GRI: 4.1, 4.5 Annual Report 2011 Trelleborg AB 35 CORPORATE GOVERNANCE REPORT Nomination Committee Nomination Committee for Meeting re-elect all Board members: Hans Björck, Claes Lindqvist, Sören H the Annual General Meeting Mellstig, Peter Nilsson, Bo Risberg, General Meeting Name/Representing Share of Share of Nina Udnes Tronstad, Heléne Vibbleus votes, votes, Bergquist and Anders Narvinger as H&Z September December passed a resolution regarding the Nomi- 30, 2011 31, 2011 Chairman. nation Committee and assigned the _`{U0W The Nomination Committee has Chairman of the Board the task of asking Henry and Gerda Dunker Foundation ?/"/| ?/"/| decided to propose the re-election U of PricewaterhouseCoopers AB as major shareholders at the close of the Henrik Didner Didner & Gerge Funds ="'| ="/| " third quarter to each appoint one member Peter Rönnström to the Nomination Committee. The com- Lannebo Funds "/| "=| The Board of Directors position of the Nomination Committee Thomas Eriksson was published on Trelleborg’s website Swedbank Robur Funds "| "| I$ J% and through a press release on October Johan Held comprised eight members elected by the '$"H+- AFA Insurance Companies "'| "?| Annual General Meeting, including the ter, the Nomination Committee repre- Total 63.9% 63.7% President and CEO. Employees elect )'/U''W three representatives and one deputy to of the shareholders’ votes. the Board of Directors. Proposals to the Annual The Group’s CFO, Bo Jacobsson, who The guidelines of the principal own- General Meeting 2012 was succeeded by Carolina Dybeck ers for the selection of candidates to be The Nomination Committee has formulat- LH'$$ nominated to the Board specify that they ed the proposals below for submission Board meetings as does the General shall possess knowledge and experience H&Z Counsel, Ulf Gradén, who serves as the relevant to Trelleborg’s operations. The resolution: Board’s secretary. Other salaried employ- Nomination Committee observes the ees of the Group participate in the Board rules regarding the independence of The Nomination Committee resolved meetings to make presentations on Board members, as stated in the to propose that the Annual General U!" Swedish Code of Corporate Governance. ^0 =U=W telephone conferences. The members Work of the Board of Directors of the Nomination Committee and the J!UW"!# shareholders who appointed them are on structural issues and the strategic plan. presented in the table below. In addition, February No. 1: Legal disputes and insurance coverage, Year-end Report, the Chairman of the Board, Anders H_$0$H$ Narvinger, was a member of the Nomi- Structural issues, Financing, Prior to the AGM. 0" As a basis for the Committee’s work, No. 2: Financing. information on the company’s operations April No. 3: YU+$@ and strategic focus was presented by issues, Financing, Prior to the AGM, Committee reports. the President. The Chairman of the No. 4: Statutory Board meeting. Board presented the annual evaluation of the Board members’ activities, and July No. 5: Interim report for second quarter, Audit Report, provided information on the Board’s work Committee reports. during the year. Each chairman of the September No. 6: Review of Trelleborg’s operations in Brazil, Structural Board’s committees provided further issues. information on work in the various committees. The Nomination Committee October No. 7: @/" has also met with a number of individual No. 8: Interim report for third quarter, Committee reports, Board members for interviews and Structural issues. discussions. December No. 9: $@/$@ issues, Committee reports, Audit report. The President presents a report on the operations’ performance at ordinary Board meetings. All business areas are usually given an opportunity to make an in-depth presentation of their operations at a Board meeting at least once per year. The Board conducts reviews with the auditor when audit reports are to be considered. 36 Annual Report 2011 Trelleborg AB GRI: 4.5, 4.6, 4.7, (4.10) CORPORATE GOVERNANCE REPORT Independence of the Board Establishment and follow-up of annual Auditor The Board’s assessment, which is work plans for the Internal Control Trelleborg’s auditor is the Pricewater- staff function. shared by the Nomination Committee, 0HJ of the Board members’ independence Review of continuous reporting from the public accountants, including authorized in relation to the company and the Internal Control staff function relating to public accountants Mikael Eriksson and shareholders is presented in the table internal audits and the proactive work Eric Salander. Mikael Eriksson is the Audi- =="H on the internal control environment.