Refinamiento estructural por el método de Rietveld.

according to the Government Ownership Policy, the starting point for nomination of a Board member shall be the compe- tence that is required by the company’s Board of Directors. The Government’s goal is that the Board shall have a high level of expertise, which is well adapted to the company’s business, situation and future challenges. Board members are expected to have a high level of integrity and exercise good judgment, as demanded of state representatives. each Board member must be capable of making an independent assessment of the company’s operations.

The composition of the Board shall also be such that there is balance between the number of men and women (at least 40 percent representation for each gender). The percentage of members elected by the aGM who are male is 43 (43) percent for Teracom aB’s Board of Directors. The average age of Board members is 53 (52) years. The owner’s assessment is that, on the whole, the Board of Directors meets or exceeds the require- ments stated in the Government Ownership Policy.

within Teracom aB’s Board of Directors there is an audit committee responsible for such things as monitoring auditor impartiality, assisting the Board with its efforts to ensure the quality of financial reporting and monitoring internal control. During 2010, the Board set up a remuneration committee that was assigned the task of reviewing and providing the Board with recommendations on remuneration to the Group’s senior executives in accordance with the Group’s policies and the owner’s guidelines. The remuneration committee is also respon-

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sible for preparing a recommendation to the Board on remu- neration and other employment terms and conditions for the President/CeO.

Responsibility of the Board of Directors

The Board has the ultimate responsibility for the organization and administration of the Teracom Group’s affairs. it also has the ultimate responsibility for ensuring that company reporting to its owner and the public provides a true and complete picture of the group’s development, financial position and risks. The Board is responsible for making sure that financial reports are prepared in accordance with the applicable laws and generally accepted accounting principles. it must also ensure that the Teracom Group complies with the OMX nordic exchange Stockholm list- ing agreement. This means that Teracom must prepare a corpo- rate governance report and a report on its internal controls, in accordance with the Swedish Code of Corporate Governance.

The Board must reconcile its views with the owner on issues of significant importance, such as the capital structure and long- term financing issues, changes in strategy and acquisitions, mergers or divestitures.

The work plan that is established by the Board each year regu- lates its work as well as how responsibilities are divided between the Board of Directors and the President/CeO. The work plan also includes instructions regarding financial reporting, which com- plement the requirements found in the Companies act and the Swedish Code of Corporate Governance.

The Chairman of the Board has special responsibility for lead- ing the work done by the Board and making sure that it carries out all of its assigned duties. among other things, the Chairman is responsible for making sure that every new Board member receives appropriate introductory training and that the Board regularly updates and deepens its knowledge of the Teracom Group. The Chairman is responsible for the company’s contacts with the owner and for relaying the owner’s views on ownership issues to the rest of the Board.

The duties of the Board of Directors

There were 13 board meetings held in 2010, of which one was an extra meeting and two were per capsulam meetings. The company’s auditors who were elected at the aGM participated in a board meeting that was not attended by the company’s management team.

essentially, the work done by the Board followed the estab- lished plan, which consisted of standing information and deci- sion items as well as special issues that must be approved by the Board each year. each meeting followed the approved agenda and the underlying documentation that was distributed to each Board member prior to the meeting. The President/CeO participated in all of the regular and extra board meetings. however, representatives from the Teracom Group’s senior management team were invited to present certain issues. Standing items that were covered at Board meetings included the President/CeO’s report and monthly financial reporting. additionally, the Board addressed several other issues at its meetings held in 2010. Particular attention was given to the following items:

• Strategy and business plans • Budget

• Development of Boxer A/S

• Acquisition of Teracom A/S (previously BSD) • The Group’s organizational structure

• Reports from the audit committed on such items as internal

control and audit

• Corporate governance issues and Group-wide policies • Annual report, interim reports and monthly reports

Remuneration

The Chairman of the Board and all Board members are paid for their efforts and the responsibility that their assignment entails, in accordance with the decisions taken at the aGM. Members also received payment for their work in committees.

Composition of the Board of Directors 2010

Name year of birth Role in the Board of Directors Elected Audit committee Remuneration committee

Åsa Sundberg 1959 Chairman of the Board 2008 Chairman of the Board

Kristina axberg Bohman 1959 Board Member 2007 Chairman of the Board

Maria Curman 1950 Board Member 2007 Board Member

ingrid engström 1958 Board Member 2003 Board Member

Lars Grönberg 1949 Board Member 2005 Board Member

Tobias henmark 1968 Board Member 2003

Urban Lindskog 1965 Board Member 2007 Board Member Board Member

John-Olof Blomkvist 1949 Board Member 1995 Stig-arne Celin 1953 Deputy Member 2002 Claes-Göran Persson 1958 Board Member 2006

Magnus ahxner 1973 Deputy Member 2010

Stefan Thylander 1953 Deputy Member 2007

COrPOraTe GOvernanCe rePOrT

The Board of Directors decides on the President/CeO’s remuner- ation based on preparatory work by the remuneration commit- tee. when deciding on the remuneration and other employ- ment terms and conditions for senior executives, consideration is given to the guidelines stated in the remuneration policy, which are established by the owner at the aGM. For more infor- mation on remuneration, please see note 6 on page 72 of the annual report.

Audit committee

each year, the Board appoints an audit committee to obtain more in-depth knowledge on, and to be able to work more effi- ciently on, matters relating to risk assessment, internal control, external reporting and auditing. The audit committee is a pre- paratory body, whose proposals are always passed on to the Board. in addition, the committee’s work is regulated by a formal written work plan. The committee’s tasks also include monitor- ing auditor impartiality and independence by supervising the independent audit tasks that auditors may be given by the com- pany’s management team. The audit committee also assists the Board of Directors in assuring the quality of financial reporting. Subsequent to the 2010 aGM, the committee consisted of the following three members: Kristina axberg Bohman (Chair- man), Lars Grönberg and Urban Lindskog. The person in charge the internal audit serves as the secretary to the audit committee.

During the 2010 financial year, the committee held seven meet- ings and particular attention was devoted to the following items:

• Q4/Year-end report and Annual Report for 2009 • Interim Reports 2010

• Risk assessments • Critical accounting issues • Evaluation of the internal controls • Evaluation of the work done by auditors

• Governing policies for Board decisions • Internal Auditing

• The Swedish Code of Corporate Governance • Planning of the audit

The following also attended these meetings: the auditors, exec- utive vice President/CFO and accounting manager for consoli- dation. however, the auditors were not present at the meeting to evaluate the auditors’ work. Company officers from the Teracom Group were invited to present certain issues.

The audit committee always submitted information about its meetings at the next scheduled Board meeting. The minutes from meetings of the audit committee were distributed to each Board member.

Remuneration committee

The remuneration committee is responsible for reviewing and providing recommendations on remuneration principles, including performance based remuneration and pension terms for the company’s senior executives in accordance with the Group’s policies. it is also responsible for reviewing and provid- ing recommendations on the President/CeO’s terms of employ- ment, remuneration and other benefits prior to a decision on such matters by the Board of Directors. The remuneration is a preparatory body that submits its recommendations to the Board of Directors.

PRESIDENT/CEO AND SENIOR MANAGEMENT TEAM