Corporate governance in Swedish listed companies is regulated by a combination of written rules and generally accepted principles. The primary component of the regulatory framework is the Swedish Companies Act, but it also includes the Code and regulations in the form of listing requirements and listing agreements that apply to the regulated market on which the respective company's shares are traded. In this context, mention should also be made of the Swedish Securities Council's rulings on what constitutes generally accepted practice in the Swedish stock market.
The Companies Act
The Swedish Companies Act contains fundamental rules regarding a company's organization. The Act specifies which corporate bodies a company is to have, the tasks of each body and the responsibilities of the persons on in those corporate bodies. The Code supplements the law by placing higher demands in some areas, while at the same time making it possible for companies to deviate from these if deviation in that particular case would be considered as resulting in better corporate governance – the comply or explain principle.
The four corporate bodies
The Swedish Companies Act stipulates that a company is to have three decision-making bodies: the shareholders’ meeting, the board of directors and the chief executive officer. These are in a hierarchical relationship. There is also to be a control body, the auditor, which is appointed by the shareholders’ meeting