Orexo is a Swedish public limited liability company, with its registered office in Uppsala, Sweden. Corporate Governance in Orexo is based on applicable laws, rules and recommendations such as the Swedish Code of Corporate Governance (“the Code”), Orexo’s articles of association and internal regulations and guidelines. The aim of corporate governance at Orexo is to create a clear division of roles and responsibilities between shareholders, the Board of Directors and Management. Internal governance, control and risk management concerning financial reporting are fundamental factors in Orexo’s business control.
Corporate Governance Structure
The governance, management and control of Orexo are divided between the General Meeting of Shareholders, the Board of Directors and the President.
Examples of external regulations influencing corporate governance
- The Swedish Corporate Governance Code
- Swedish Company Act
- Accounting Law
- The Annual Report Law
- Nasdaq Stockholm Rules for Issuers
- OTCQX Rules for Companies trading ADRs on OTCQX
Examples of internal rules of significance for corporate governance
- Articles of Association
- Formal work plan for the Board of Directors (including terms of reference for Board Committees)
- Terms of reference for the President
- Guidelines for remuneration of senior executives
- Finance policy
- IT policy
- Financial guidelines
- HR guidelines
- Code of Conduct
Corporate Governance Reports
The Corporate Governance Reports shown below include information about the work of the Nomination Committee, the Board and the various committees, as well as information on remuneration.
Information about Orexo’s existing incentive program is available in the annual report for 2019, note 9 and 23. The annual report for 2019 is available on the company’s website, www.orexo.com.
Notice of Extraordinary General Meeting of Orexo in 2020
The shareholders in Orexo AB (publ), reg. no. 556500-0600, registered office Uppsala, are summoned to the extraordinary general meeting, to be held on Tuesday 19 May 2020, at 11.00 am in Orexo’s facilities at Rapsgatan 7E in Uppsala, Sweden. Due to the COVID-19 outbreak we kindly ask our attendees to read our Visitation Policy before attending in person at https://orexo.com/about-us/visitation-policy/.
Shareholders who wish to participate in the meeting must be recorded in the share register maintained by Euroclear Sweden AB on Wednesday 13 May 2020, and notify Orexo of their intention to attend the meeting not later than on Wednesday 13 May 2020 by post to Orexo AB, P.O. Box 303, SE-751 05 Uppsala, Sweden, by telephone +46 (0) 18 780 88 00, by telefax +46 (0) 18 780 88 88, or by e-mail to firstname.lastname@example.org.
The notification shall set forth the name, personal/corporate identity number, the number of shares held, telephone number (daytime) and, where applicable, number of assistants (not more than two) that the shareholder intends to bring to the meeting. Shareholders to be represented by proxy should submit a power of attorney (original document) and a certificate of registration or equivalent together with the notification of attendance. A proxy form is available at www.orexo.com.
Shareholders whose shares are registered in the name of a nominee through a bank or a securities institution must temporarily re-register their shares in their own names to be entitled to participate in the meeting. Such registration, which may be temporary, must be duly effected in the share register maintained by Euroclear Sweden AB on Wednesday 13 May 2020, and the shareholders must therefore advise their nominees well in advance of this date.
Documents related to the EGM 2020
Orexo’s highest decision-making body is the General Meeting, at which every shareholder has the right to participate and raise matters for discussion. At the Annual General Meeting, the company’s Board of Directors and Board fees are established. The other mandatory tasks of the Annual General Meeting include adopting the company’s balance sheet and income statement, and passing resolutions on the appropriation of earnings from operations, remuneration guidelines for senior executives and discharge from liability for Board members and the President. The Annual General Meeting also selects the company’s auditor and establishes the auditors’ fees. In line with the Articles of Association, the Annual General Meeting shall be held in Uppsala or Stockholm.
Annual General Meeting Orexo AB (publ.) 2021
The shareholders of Orexo AB (publ), reg. no. 556500-0600, registered office Uppsala, are summoned to the annual general meeting, to be held on Tuesday 13 April 2021.
In order to mitigate the spread of Covid-19, the board of directors has decided that the annual general meeting will be conducted by advance voting only, without physical presence of shareholders, proxies and third parties.
Orexo welcomes all shareholders to exercise their voting rights at this annual general meeting through advance voting on the basis of temporary statutory rules, according to the procedure set out below. Information on the resolutions passed at the annual general meeting will be published on 13 April 2021, as soon as the result of the voting has been finally confirmed.
In the advance voting form, the shareholders may request that a resolution on one or several of the matters on the proposed agenda below should be deferred to a so-called continued general meeting, which cannot be conducted solely by way of advance voting. Such continued general meeting shall take place if the annual general meeting so resolves or if shareholders with at least one tenth of all shares in the company so request. The shareholders are reminded of their right to request information according to chapter 7, section 32 of the Swedish Companies Act.
Shareholders who wish to participate, through advance voting, in the meeting must (a) be recorded in the share register maintained by Euroclear Sweden AB on Thursday 1 April 2021, and (b) notify Orexo of their intention to participate in the annual general meeting by casting their advance votes in accordance with the instructions under the heading “Advance voting” below, so that the advance voting form is received by Orexo no later than on Monday 12 April 2021.
Shareholders whose shares are registered in the name of a nominee through a bank or a securities institution must temporarily re-register their shares in their own names to be entitled to participate in the meeting. Such registration, which may be temporary, must be duly effected in the share register maintained by Euroclear Sweden AB on Wednesday 7 April 2021, and the shareholders must therefore advise their nominees well in advance of this date.
The shareholders may only exercise their voting rights at the annual general meeting by voting in advance, so-called postal voting in accordance with section 22 of the Act (2020:198) on temporary exceptions to facilitate the execution of general meetings in companies and other associations.
A special form shall be used for advance voting. The form is available on Orexo’s website, www.orexo.com. The advance voting form is considered as the notification of participation.
The completed voting form must be received by Orexo no later than Monday 12 April 2021. The form may be submitted via e-mail to email@example.com or by post to Orexo AB, “Annual general meeting”, P.O. Box 303, SE-751 05 Uppsala, Sweden. If the shareholder votes in advance by proxy, a power of attorney shall be enclosed to the form. If the shareholder is a legal entity, a certificate of incorporation or a corresponding document shall be enclosed to the form. The shareholder may not provide special instructions or conditions in the voting form. If so, the vote (i.e. the advance vote in its entirety) is invalid. Further instructions and conditions are included in the form for advance voting.
For questions regarding the annual general meeting or to have the advance voting form sent by post, please contact Orexo, by telephone +46 (0) 18 780 88 00, by telefax +46 (0) 18 780 88 88, or by e-mail to firstname.lastname@example.org.
When this notice to attend the annual general meeting is issued, the total number of shares in the company is 34,710,639 with 34,710,639 votes, of which all are ordinary shares entitling to one vote per share. In total, the company holds 415,766 own ordinary shares.
Documents related to the Annual General Meeting 2021:
- PROXY FORM
- THE NOMINATION COMMITTEE'S PROPOSALS
- MOTIVATED OPINION REGARDING PROPOSAL OF THE BOD
- STATEMENT COMPANIES ACT 20:14
- STATEMENT MANAGEMENT REMUNERATION
- BOARD'S STATEMENT UNDER ABL 19:22
- COMPLETE PROPOSAL OF BUY BACKS
- COMPLETE PROPOSAL REDUCTION AND BONUS ISSUE
- BOARD'S REPORT ON MONITORING AND EVALUATION OF REMUNERATION IN 2019
- REPORT FROM THE AGM
Documents related to the Annual General Meeting 2019:
- MINUTES 2019
- PROXY FORM
- THE NOMINATION COMMITTEE’S PROPOSALS TO THE ANNUAL GENERAL MEETING 2019
- THE NOMINATION COMMITTEE’S OF OREXO AB (PUBL) MOTIVATED OPINION REGARDING PROPOSALS OF THE BOARD OF DIRECTORS AT THE ANNUAL GENERAL MEETING 2019
- AUDITOR’S REPORT
- PROPOSAL REGARDING AUTHORIZATION TO REPURCHASE AND TRANSFER THE COMPANY’S OWN SHARES
- PROPOSAL TO IMPLEMENT A NEW PERFORMANCE BASED LONG-TERM INCENTIVE PROGRAMME
- THE BOARD OF DIRECTORS’ STATEMENT UNDER CHAPTER 19 SECTION 22 OF THE SWEDISH COMPANIES ACT
- THE BOARD’S REPORT ON THE MONITORING AND EVALUATION OF REMUNERATION TO SENIOR EXECUTIVES IN 2018
The Nomination Committee represents the company’s shareholders. It is tasked with creating the best possible basis for the General Meeting’s resolutions regarding the election of Board members and Board fees and with submitting proposals concerning, for example, the appointment of auditors and auditors’ fees. Combined, the Nomination Committee represents about 45 percent of the number of shares and votes in the company, based on shareholder data at the time of appointment.
- Christian Salling, Novo Holdings A/S, also Chairman of the Nomination Committee
- Björn Odlander, HealthCap
- Claus Berner Møller, Arbejdsmarkedets Tillaegspension (ATP)
- James Noble, Chairman of the Board of Orexo
Board of Directors’ Report on Internal Control and Risk Management regarding Financial Reporting
The aim of Orexo’s risk management systems and processes is to ensure that the shareholders can have the utmost confidence in the financial operation and presented reports, including the information given in this Annual Report and all interim reports. Orexo has established a methodology for developing, implementing, driving and evaluating internal controls and risk management in respect of all parts of the company, including financial reporting.
This methodology conforms to internationally established standards in the industry and comprises a framework with five principal components: control environment, risk assessment, control activities, information and communication, and follow-up and evaluation.
Pursuant to the Swedish Companies Act, the Board of Directors is responsible for the internal control and governance of the company. To maintain and develop a functional control environment, the Board has implemented a process of risk mapping and established a number of basic control documents and procedures that are of importance to financial reporting. These include the formal work plan for the Board of Directors and the terms of reference for the President, which are reviewed and approved annually by the Board.
In addition, the control environment is continuously updated and secured by means of continuous monitoring and regular evaluations of risk profiles within various functions.
Responsibility for the daily work of maintaining the control environment is primarily incumbent on the President. He reports regularly to the Board of Directors and the Audit Committee pursuant to established procedures. In addition, the Board also receives regular reports directly from the company’s auditor. Company managers have defined authorities, control functions and responsibilities within their respective areas for financial and internal controls.
Orexo regularly conducts evaluations of financial risks and other risks that may impact financial reporting. These reviews extend to all parts of the company and are carried out to ensure that there is no significant risk of errors occurring in financial reporting. There are several areas where the control of financial information is particularly important, and Orexo has established a comprehensive risk layout that highlights a number of key potential risks in the financial reporting system.
The company continuously monitors and evaluates these areas and regularly examines other areas in order to create a comprehensive set of control procedures that will minimize the risks in these areas. In addition, new and existing risks are identified, addressed and regulated through a process of discussion in forums such as the Executive Management team, Board and Audit Committee.
In light of the risks identified in the risk layout, and the continuous monitoring of the methods used to manage financial information, Orexo has developed control activities that ensure good internal control of all aspects of financial reporting. A number of policy documents and procedures have been applied throughout the year to manage reporting and accounting. Standard procedures, attestation systems, financial guidelines and the risk layout are examples of such policy documents.
An additional level of control in the financial system has been achieved by separating the company’s financial and controller functions. These units are responsible for ensuring that financial reporting is correct, complete and timely. Orexo strives to continually improve its internal control systems and has, on occasion, engaged external specialists when validating these controls.
Information and communication
Orexo is a listed company in one of the most regulated markets in the world – healthcare. In addition to the highly exacting requirements that Nasdaq Stockholm and the supervisory authorities impose on the scope and accuracy of information, Orexo also employs internal information and communication control functions designed to ensure that correct financial and other corporate information is communicated to employees and other stakeholders.
The Board receives monthly reports concerning financial performance, commercial performance and the status of Orexo’s development projects and other relevant information.
The corporate intranet provides detailed information about applicable procedures in all parts of the company and describes the control functions and how they are implemented.
The security of all information that may affect the market value of the company and mechanisms to ensure that such information is communicated in a correct and timely fashion are the cornerstones of the company’s undertaking as a listed company. These two factors, and the procedures for managing them, ensure that financial reports are received by all players in the financial market at the same time, and that they provide an accurate presentation of the company’s financial position and performance. During the year these procedures were updated to reflect the new EU Market Abuse Regulation (MAR) adopted in Sweden as of July 3, 2016.
Orexo’s management conducts bi-weekly performance follow-up, with an analysis of deviations from the budget and plans. Orexo’s controller function also conducts monthly controls, evaluations and follow-ups of financial reporting. Because much of the company’s product devel- opment is carried out in project form, this is followed up on a continuous basis from a financial perspective. After the commercialization of Zubsolv®, new routines and reporting have been implemented to secure continuous follow-up on all aspects of the Zubsolv business, e.g. manufacturing, sales performance, wholesaler orders, sales force performance, inventory levels etc. The Board of Directors and the Audit Committee review the Annual Report and interim reports prior to publication. The Audit Committee discusses special accounting policies, internal control framework, risks and other issues associated with the reports. The company’s external auditor also participates in these discussions.
Orexo has no separate internal audit function. The Board annually evaluates the need for such a function and, considering the size and structure of the company, has found no basis for establishing a separate internal audit function. The Board of Directors monitors the internal control over financial reporting through regular follow-ups by the Audit Committee and the Board.