Corporate Governance Report 2017 Corporate Governance Report 2017 Tele2 in brief Tele2 AB (publ) (“Tele2” or the “company”) has 15 million custom- mandatory law and rules, applies Nasdaq Stockholm’s Rule Book for ers in seven countries and offers mobile services, fixed broadband Issuers Nasdaq Stockholm and the Swedish Corporate Governance and telephony, data network services, content services and global Code (“the Code”). IoT solutions. In 2017, the company had net sales of SEK 25 (21) bil- This Corporate Governance Report is published separately lion and reported EBITDA of SEK 6.4 (5.4) billion. Tele2's divestment from the Annual Report and prepared in accordance with the of its Austrian operations to Hutchison Drei Austria GmbH (Three Swedish Annual Accounts Act and the provisions of the Code. Austria) was closed on October 31, 2017. On December 15, 2017, Previous years’ Corporate Governance Reports and other corporate Tele2 and Deutsche Telekom agreed to combine Tele2 Netherlands governance documents are available on the corporate website, and T-Mobile Netherlands where Tele2 will hold a 25% share www.tele2.com. The Code is based on the principle of comply or in the combined company. Tele2 Austria and Tele2 Netherlands explain, which means that companies can deviate from single rules have been reported as discontinued operations and therefore not in the Code, provided that they offer an explanation for the devia- included above. Tele2 is a Swedish limited liability company with tion. Tele2 has not deviated from the Code during 2017. shares listed on the Nasdaq Stockholm and thus, in addition to Overview of corporate governance at Tele2 Sound corporate governance at Tele2 means the establishment supports the understanding and monitoring of the development of of an appropriate framework for decision making, assignment of the company. Tele2’s overall corporate governance framework can responsibility and the implementation of transparent reporting that be visualised as follows: Tele2’s governance structure Proposals for Board Elections and Auditor External Steering External Auditors Shareholders AGM Nomination Committee Documents, such as Swedish Companies Act, Election Evaluation the Annual Accounts Act, the Swedish Code of Reporting Charters Corporate Governance, Audit, Remuneration Rule Book for Issuers Board of Directors Reports and Capital Structure Nasdaq Stockholm, Committees industry regulations etc. Strategies & Plans Execute strategies & plans and report progress Reporting Leadership Team & President and CEO Central Functions Internal Steering Documents Reporting Reporting Business Units Tele2 – Corporate Governance Report 2017 1 (13) Shareholder information Annual General Meeting Tele2’s Class A and B shares were first listed on the O-List of the The 2017 Annual General Meeting (“AGM”) was held on May 9, Stockholm Stock Exchange in May 1996. Tele2 has been listed 2017. At the meeting, 718 shareholders were in attendance, per- on the Nasdaq Stockholm main market (Large Cap list) list since sonally or by proxy, representing 70 percent of the votes. Wilhelm October 2006. Per 31 December 2017, Tele2 had 61,468 sharehold- Lüning was elected Chairman of the meeting. Noted as present ers and the market value of the company was SEK 50,746 million. were the Chairman of the Board Mike Parton, the Board members In addition to shareholder meetings, Tele2 continuously provides Lorenzo Grabau, Sofia Arhall Bergendorff, Georgi Ganev, Cynthia information to shareholders by publishing financial reports Gordon, Irina Hemmers, Eamonn O’Hare and Carla Smits-Nusteling, (interim reports, full year reports and annual reports) and press the proposed new Board member Anders Björkman, the President releases. The company also arranges regular analyst meetings. and CEO Allison Kirkby, CFO Lars Nordmark, General Counsel Stefan Backman, the member of the Nomination Committee John Hernander and the auditor-in-charge Thomas Strömberg. The Tele2 shares1) Attendance, % of votes Total issued % of total Votes per % of total Par value shares count share votes A Shares 1.25 22,793,523 4.5% 10 32.0% 100 B Shares 1.25 482,207,489 95.1% 1 67.7% C Shares 1.25 1,899,000 0.4% 1 0.3% 80 72% 70% 69% 70% 70% Total 506,900,012 100% 100% 60 1) at December 31, 2017 40 Number of shareholders 20 66,244 70,000 0 56,527 61,468 2013 2014 2015 2016 2017 60,000 52,146 47,329 50,000 The following significant resolutions were adopted by the AGM: re-election of Mike Parton, Sofia Arhall Bergendorff, Georgi 40,000 • Ganev and Cynthia Gordon, Irina Hemmers, Eamonn O’Hare and 30,000 Carla Smits-Nusteling as directors of the Board and election of Anders Björkman as a new director of the Board; 20,000 re-election of Mike Parton as Chairman of the Board; 10,000 • re-election of Deloitte as auditor until close of the 2018 AGM • with Thomas Strömberg continuing as auditor-in-charge; 0 2013 2014 2015 2016 2017 approval of the Annual Report for 2016 and resolution on • ordinary dividend of SEK 5.23 per share. The record date was decided to be Thursday May 11, 2017. The dividend was paid Share capital distribution, by nationality, % of votes out to the shareholders on Tuesday May 16, 2017; discharge the directors of the Board and the CEO from liability • for the financial year 2016; approval of remuneration to the Board and auditor and proce- ■ Sweden, 75,80% • ■ USA, 6,70% dures for the Nomination Committee; ■ UK, 0,80% approval of guidelines for the remuneration to senior executives ■ Norway, 1,40% • as well as the principles and scope for Tele2’s long term share- ■ Rest of the world, 3,80% related incentive program 2017, including authorisations for the ■ Anonymus, 11,50% Board to resolve on a new issue of not more than 450,000 Class C shares and to repurchase all Class C shares in the company in order to transfer such shares to the participants in Tele2’s long- For further shareholder information, including information on share term incentive plans, of which 2,000,000 can be transferred to capital, voting rights, and the current share price see our corporate the participants under the 2017 plan; website, www.tele2.com. adopt a new long-term, cash based, incentive programme for • Tele2 employees that have a direct impact on the value creation of Tele2’s internet-of-things business; and authorise the Board to pass a resolution on one or more occa- • sions for the period up until the next Annual General Meeting to repurchase so many Class A and/or Class B shares that Tele2’s holding does not at any time exceed 10 per cent of the total number of issued Tele2 shares. The minutes of the AGM are available on Tele2’s corporate website, www.tele2.com. Tele2 – Corporate Governance Report 2017 2 (13) The Nomination Committee for the 2017 AGM The Board For the 2017 AGM, the Nomination Committee, consisted of; Cristina According to Tele2’s Articles of Association, the Board shall consist Stenbeck appointed by Investment AB Kinnevik; John Hernander of at least five and a maximum of nine members, to be elected by appointed by Nordea Investment Funds; Ossian Ekdahl appointed the AGM. The Articles of Association of Tele2 are available on the by Första AP-fonden, Martin Wallin appointed by Lannebo Fonder corporate website, www.tele2.com. and Mike Parton as Chairman of the Board of Tele2 AB. At the 2017 AGM, Tele2’s shareholders re-elected Mike Parton, The Committee held two meetings, with the customary addi- Sofia Arhall Bergendorff, Georgi Ganev, Cynthia Gordon, Irina tional contact and interviews in between meetings. In assessment Hemmers, Eamonn O’Hare and Carla Smits-Nusteling as directors of the degree to which the Board meets the requirement placed of the Board and elected Anders Björkman as a new director of the on it, the Nomination Committee reviewed the Board members’ Board. Lorenzo Grabau left the Board. Furthermore, Mike Parton ability to devote the necessary time and commitment required, as was re-elected as Chairman of the Board. well as the balance and diversity of contributions of experiences The President and CEO, CFO and General Counsel/Company from different areas and geographic regions of the broader digital Secretary also attend the Board meetings except for when their communications industry. The Committee also had the benefit of own work is being evaluated. Other employees participate in a formal evaluation of the Board and its individual members. In its the Board meetings to discuss specific matters, or as required by work, the Nomination Committee applies rule 4.1 of the Swedish the Board. Corporate Governance Code as its diversity policy. Accordingly, the Committee gives particular consideration to the importance Independence of the Board of an increased diversity on the Board, including gender, age and The Board’s assessment regarding each member’s position of nationality, as well as depth of experiences, professional back- independence in relation to the company, its shareholders and the grounds and business disciplines. The Committee believes the management is presented in the table “Composition of the Board”. composition of the Board is fit-for-purpose in respect of the various None of the Board members are part of the senior management of dimensions of diversity, and will continue to pursue a high degree the company, nor are they union representatives. Four of the total of diversity and gender balance in its efforts to compose the most eight Board’s members during 2017 were women. capable Board. Tele2 meets the Code’s requirement that the majority of the The Committee submitted proposals to the AGM for the election members be independent in relation to the company and its execu- of the Board and auditor, and their remuneration, Chairman of the tive management.