Board of Directors

The Board of Alfa Laval manages the company on behalf of the shareholders and bears the ultimate responsibility for the organization and administration of the company. The work and responsibilities of the Board are governed by the Swedish Companies Act, the Swedish Board Representation (Private Sector Employees) Act, Alfa Laval’s Articles of Association, the Main Market Rulebook and the Code. The Board is also responsible for establishing Board and CEO instructions in writing. These instructions describe the Board’s work assignments, the committees to be established within the Board and the allocation of work between the Board, the committees, and the President. Further, the Board instructions define the role of the Chairman of the Board. To enable the ongoing assessment of the company’s financial position, the Board instructions include separate instructions regarding the financial reporting to be submitted to the Board.

In accordance with Alfa Laval AB’s Articles of Association, the Board of Directors is to comprise a minimum of four and maximum of ten members, with a maximum of four deputy members. The members are elected annually by the general meeting for a period until the next Annual General Meeting. In order to safeguard the best interests of the company and its owners, the Board members shall devote the required time and care to the assignment and have the necessary competence. Additionally, the trade-union organizations appoint three employee representatives to the Board as well as deputy employee representatives.

The Board’s work includes establishing and evaluating Alfa Laval’s overall long-term objectives and strategies. This is accomplished by establishing business and financial plans, reviewing and approving financial statements, adopting guidelines, making decisions on issues relating to acquisitions and divestments, deciding on major investments as well as significant changes to Alfa Laval’s organization and operations. Moreover, the Board appoints, evaluates, and dismisses the company’s President and establishes the instructions for the President with respect to the daily operations. The Board of Directors is also responsible for Alfa Laval’s corporate governance and Business Principles.

The Board conducts its work primarily within the framework of formal Board meetings. Approximately eight ordinary Board meetings are held every year and extraordinary meetings are held when needed. Recurring agenda items at these meetings include health and safety, earnings results, order trends, investments, sustainability and business development. The company’s President prepares an agenda for each meeting in consultation with the Chairman of the Board. When relevant, the work of each committee is presented by its respective Chairman at the meetings.

Employees in the company are also invited to Board meetings as presenters and experts. The company’s Chief Financial Officer participates in all meetings, as does the Chief Legal Officer, who serves as Secretary to the Board. Within some areas, the Board of Directors conducts its work through the Audit Committee and the Remuneration Committee. More information about the work of each committee of the Board is presented below.

Responsibilities of the Chairman of the Board

The Chairman of the Board directs the work of the Board in a manner that ensures that it complies with prevailing laws and regulations as well as internal instructions. The Chairman must ensure that the Board work is well organized and conducted efficiently, and that the Board fulfills its tasks. In dialogue with the company’s President, the Chairman monitors operational developments and is responsible for ensuring that the other Board members continuously receive all information necessary for the work of the Board to be performed in the most effective manner. The Chairman ensures that the Board’s decisions are executed and represents the company in ownership issues.

Moreover, the Chairman is responsible for introductory education for new Board members and the annual evaluation of the Board’s work. The Chairman participates in evaluation and development matters with respect to the Group’s senior executives.

Compensation of the Board

Compensation to the Board is determined by the Annual General Meeting based on a proposal from the Nominating Committee. The Chairman as well as other members of the Audit Committee and the Remuneration Committee receive supplementary compensation. No Board or committee member is entitled to pension payments from the company.

Composition of the Board after the 2023 Annual General Meeting

The Board elected by the 2023 Annual General Meeting consists of nine members, with no deputy members. The Board’s assignment lasts until the end of the 2024 Annual General Meeting. The Board also includes three employee representatives with three deputy employee representatives, appointed by the trade-union organizations.

Alfa Laval’s Board of Directors demonstrates both diversity and breadth of competence, knowledge, and experience. The Chairman and the members have a broad operational experience within an industry that is relevant for Alfa Laval and within strategic development areas for the company. The members of the Board have gained experience in previous and current Board assignments in other companies as well as from senior positions held at other companies. In the last years, the collective skills of the Board have been expanded with experience from product development, network solutions, and retail and consumer goods companies. Furthermore, since the 2020 Annual General Meeting, the Board has a new Chairman, with thorough experience in successfully leading a large international company in a sector that is significant and relevant for Alfa Laval. More information about the Board members is available on page [94–95] and on Alfa Laval’s website.

All members of the Alfa Laval Board elected by the Annual General Meeting 2023 are considered independent of the company and its management. All members are also considered independent of the company’s major shareholders, except Finn Rausing and Jörn Rausing, who cannot be considered independent due to their relationship with the largest shareholder in Alfa Laval AB, Winder Holding AG.

Work of the Board in 2023

Work of the Board in 2023 The Board held eight Board meetings in 2023, including eight ordinary meetings and none extraordinary. Recurring items addressed at the Board meetings throughout the year included health and safety, the impact on the company due to the Russian invasion of Ukraine, inflation, earnings results, order trends, investments, sustainability, business development and acquisitions.

Another important area was climate and sustainability issues, with a focus on the Group’s sustainability goals, product development to meet customers’ sustainability-related goals and on strategic partnerships and acquisitions to position Alfa Laval for a more sustainable future. As a part of this focus, Alfa Laval acquired full ownership of Marine Performance Systems (MPS) The acquisition strengthens Alfa Laval´s position to support the decarbonization in the marine industry.  Also,  Alfa Laval  entered into a strategic joint venture with Aalborg CSP, a concentrated solar power technology company, to accelerate the development of long duration energy storage solutions.  The Board of Directors was also regularly updated and involved in Alfa Laval’s internal sustainability efforts during 2023 (see pages 46–79). In addition, the Board also approved the Sustainability Report 2023.

Moreover, the Board regularly monitored the Group’s earnings and financial position, and risk management as well as discussed the Group’s strategy and business plan. Investment and operational restructuring issues and follow-ups of previous investments were also addressed at the Board meetings in 2023.

Evaluation of the Board’s work and Board education

Each year, an evaluation is made of the Board in order to lay the foundation for well-functioning and effective governance. The evaluation is carried out by the Chairman of the Board, some years in combination with external resources. Recurring areas of the evaluation include the Board’s work methods, its work climate and its access to and need for particular Board competence. The evaluation is the foundation of the work of the Nominating Committee, both in terms of proposals for Board members and in terms of compensation. In 2023, the Chairman’s annual evaluation was carried out through the customary interviews with Board members and through a digital platform. During the interviews, the Board members were asked to answer several questions related to various areas relevant to the Board’s work.

New Board members are to go through a comprehensive introduction programme within six months of their election. The programme includes an introduction to the company and any other training agreed on by the Chairman and the individual member. In addition, an educational field trip takes place each year for the entire Board. The Board attended a field trip to Bergen, Norway during the fall. The trip included a visit to the StormGeo site, to the Framo headquarter including the Framo service workshop, as well as an aquaculture farm. The purpose of the visit was, among other things, to give the Board a deeper dive into some of the Marine Division  applications and products.