At the Annual General Meeting held on 21 May 2012, the meeting resolved to approve the following nomination process for the election of the Nomination Committee:
The Chairman of the Board shall convene the five largest shareholders of the Company, as it is known by the Company at that time, at the end of the third quarter of the year. These shareholders then have the right to appoint a member each of the Committee. If any of the five largest shareholders declines its right to appoint a member of the Committee, or if a member resigns from the Committee and is not replaced by a new member appointed by the same shareholder, the shareholder next in size shall be given the opportunity to appoint a member of the Committee. If several of the shareholders decline their right to appoint members of the Committee, no more than the eight largest shareholders need to be contacted. The Committee should be chaired by one of its members. No more than two of the Committee's members should also be members of the Board. If any of the shareholders having appointed a member to the Committee sells a not insignificant part of their shares in the Company and ceases to qualify as a large shareholder with rights to appoint a member to the Committee, the respective member should resign from the Committee, and a new member should be appointed by the next large shareholder. The Chairman of the Board shall, as part of the Committees' work, present any matters regarding the Board's work that may be of importance for the Committee's work, including an evaluation of the work of the Board and the requirements and skills set to be represented by the Directors, to the Committee;
The task of the Nomination Committee is to prepare and submit proposals to the Annual General Meeting for the election of Board members and the size of the fees paid to Board members and other Committees of the Board (currently being the Audit Committee and Remuneration Committee).
The Nomination Committee is intended to meet as often as necessary, but at least once per year.
In accordance with the nomination process approved by the Annual General Meeting, the Chairman of the Board, Robert af Jochnick, may be elected to the Nomination Committee, which did indeed occur in 2012, where he represents the af Jochnick Family. Per Hesselmark (Stichting af Jochnick Foundation), William von Mueffling (Cantillon Capital Management LLC), Pia Axelsson (Fjärde AP-fonden) and Marianne Flink (Swedbank Robur) were also appointed to the Committee. Per Hesselmark has acted chairman of the Nomination Committee. No remunerations were paid to the members of the Nomination Committee. The Nomination Committee formed in 2012 has in advance of the 2013 AGM met three times. All meetings were attended by all committee members.
The work of the Nomination Committee constituted in 2012 comprised the following: As a basis for the Committee's work, information on the Company's operations and strategic focus was presented by the Chairman of the Board at the first meeting. The Chairman of the Board also reported on the Board's work during the year. As a basis for its work, the Nomination Committee also received a presentation and report of an evaluation conducted by an external consultant concerning the Board and its work. The evaluation revealed that the Board is very well-functioning, also in comparison with other listed companies and that there is clarity between the roles of the owners, the Board and management. The evaluation furthermore concluded that the Board is composed by individuals with relevant and complementary expertise and that all Board members demonstrated a high level of commitment. After evaluating the work of the Board, the Committee drew the conclusion that the Board has been functioning well and that the critical competences have been adequately represented on the Board. The aim of the Nomination Committee is that elected Board members shall represent knowledge and competence relevant for Oriflame's operations. Independent Board members are included in full compliance with requirements that apply for publicly listed companies in Sweden.
The Nomination Committee has thereafter formulated proposals for the Annual General Meeting to be held on 21 May 2013. The proposals relates to the:
i. composition of the Board of Directors;
ii. fees paid to Board members; and
iii. appointment of Auditors.
The Nomination Committee has decided to propose to the 2013 Annual General Meeting that it re-elects all current Board members, being Robert af Jochnick (Chairman), Magnus Brännström, Marie Ehrling, Anders Dahlvig, Lilian Fossum Biner, Alexander af Jochnick, Jonas af Jochnick, Helle Kruse Nielsen and Christian Salamon. Anders Dahlvig, Marie Ehrling, Lilian Fossum Biner, Helle Kruse Nielsen and Christian Salamon are independent of the Company, the Company's Management and the Company's large shareholders.
Magnus Brännström is not independent from the Company, being the Company's CEO. Robert, Jonas and Alexander af Jochnick are not independent from the Company nor from its major shareholders: Robert and Jonas af Jochnick are co-founders of the Company and together with other members of the af Jochnick family they constitute the largest shareholder of the Company. They have been members of the Board since 1970. Alexander af Jochnick was an employee of the Company from 1999 to 2007. Alexander af Jochnick continues to be involved in the Company outside his duties as a Board member on a request and availability basis determined by the CEO. Remuneration for his assignments outside the directorship is on a time-spent basis and does not exceed €100,000 per annum and the Board is continuously informed of his assignments for the Company. For the past 4 years including 2012, no such additional remuneration was paid to Alexander af Jochnick.
After a review of the Board's compensation, the Nomination Committee resolved to propose to the 2013 Annual General Meeting to increase the Director's remuneration to EUR 65,500 (62,000) for the Chairman and EUR 29,000 (27,500) to each non-executive Director.
The Nomination Committee furthermore resolved to propose to the 2013 Annual General Meeting that the current Auditors, KPMG, be re-elected.