Board responsibilities
Nordnet’s Board of Directors has the overall responsibility for the company’s organization and management of the company’s affairs in accordance with the Swedish Companies Act, as well as for having a well-functioning reporting system. The Board is responsible for the company’s long-term operations and significant issues, for reviewing the company’s operations including procedures, resolutions on issues concerning general targets, strategies, the business plan and budget, and continuously monitoring the company’s development and financial situation. The Board is responsible for the Group’s financial statements being prepared in compliance with legislation and applicable accounting principles, and for quality assuring the company’s financial reporting. The Board ensures that the company’s external communication is characterized by openness and objectivity as well as high relevance to the target groups to which it is directed. The Board also has the task of ensuring that there is satisfactory control of the company’s compliance with laws and regulations and that necessary ethical guidelines are established for the company’s and the Group’s conduct, and appointing an internal auditor, whose work is evaluated annually. This responsibility also includes appointing a CEO, approving the composition of the management team as proposed by the CEO, and evaluating its work.
Chairman of the board
The Chairman manages the work of the Board to ensure that this is done efficiently and in accordance with legislation and regulations. The Chairman monitors operations in consultation with the CEO and is responsible for ensuring that other members receive the information they need to maintain high levels of quality in discussions and decisions. The Chairman ensures that the Board’s work is evaluated annually and verifies that the Board’s decisions are implemented effectively.
Composition of the board
At the Annual General Meeting on 23 April 2020 it was resolved that the Board would consist of eight regular members and no deputies. The CEO is not a member of the Board but attends Board meetings and presents reports to it. The company’s General Counsel usually acts as the secretary at the Board meetings. Where necessary, other company officials also present reports.
The board’s procedures
The rules of procedure are set annually at the Board meeting following election. The rules of procedure are reviewed when necessary. The rules of procedure include the Board’s responsibilities and duties, the duties of the Chairman, composition of the Board, and audit issues, and state which reports and financial information are to be received by the Board prior to each ordinary Board meeting. Furthermore, the rules of procedure include instructions to the CEO complemented by CEO terms of reference. The rules of procedure also stipulate that remuneration, Audit, Risk and Compliance and IT Committees will be established and what their tasks will be. The Board’s rules of procedure were established 23 April 2020. In addition to these committees, there is a bank-specific Credit Committee.
Evaluation of the work of the board
The rules of procedure state that an annual evaluation of the work of the Board should take place by means of a systematic and structured process. For 2019, the Chairman has ensured that the work of the Board has been evaluated through self-evaluation.
Board control over financial reporting
The Board monitors the quality of financial reporting in a number of ways. One method is by issuing instructions to the CEO. According to these instructions, the CEO is responsible for reviewing and ensuring the quality of all financial reporting, and for ensuring that the Board in general receives the reports required in order for it to continually assess the Group’s financial position.
The internal reporting and control system is based on annual financial plans, monthly reports and daily checks on key operational figures. The CEO is also responsible for other financial information, such as ensuring that press releases and presentation material are correct and of good quality. The CEO’s instructions state the issues on which the CEO is permitted to exercise his authority to represent the company only after authorization by the Board.
The Group works with internal control in accordance with the principles associated with the three lines of defence. The assessment of the efficiency of internal control is largely conducted by the independent control functions. These consist of the function for Risk Control, Compliance and internal audit, which monitor adherence to internal and external regulations and risk limits. The tasks performed by the Audit Committee ensure that the financial reports maintain a high standard. The Board follows up and assesses this quality assurance by receiving monthly reports on the company’s earnings trend, credit and risk exposure and relevant sector data and by addressing the Group’s financial situation at each Board meeting.
In 2019, two interim reports were subject to review by the company’s auditors, namely the third and fourth quarterly reports. The Group’s auditors report their findings to the Board in connection with the review of the annual accounts. In addition, the Board meets the company’s auditors at least once a year – without the presence of the executive management team – to learn about the focus and scope of the audit, and to discuss coordination between the external and internal audits and views of the company’s risks. The auditor issues a presentation and receives feedback from the Board regarding the focus and scope of the audit.
