Each country has different requirements and best practice recommendations regarding committees.
In Sweden and Norway, the nominating committee is not a subcommittee of the board but is a separate board generally composed of shareholder representatives. In Finland, nomination committees may either be formed by the board or as a separate nominating board composed of shareholder representatives. In Denmark, it is typical for the nomination committee to be a subcommittee of the board.
In Finland, boards are not obliged to establish separate committees. However, best practice is that a separate audit committee should be established when necessary. In Denmark, while there is also no hard regulation, it is recommended that separate audit, nomination, and remuneration committees be set up. In Norway, audit committees are obligatory, alongside a recommendation that separate audit and remuneration committees be established. In Sweden, the audit committee is a requirement; forming a remuneration committee is recommended.
Nordic boards maintain an average of 2.6 board committees each. Denmark has the highest number of committees (3.3), due to its corporate governance regulations. Boards in Finland, Norway, and Sweden each maintain 2.3 committees on average.
Audit committee
There are 98 audit committees in the sample. Two Swedish companies do not have an audit Committee — LE Lundbergföretagen and NIBE Industrier. Audit committees convened on average 6.2 times in the period under review.
Among audit committee chairs, 55% (52) are women. Denmark has the highest proportion of female audit chairs (58%, 14) followed by Finland (56%, 14), Norway (54%, 13) and Sweden (50%, 11). 43% (105) of audit committee members are female.
40% (38) of audit committee chairs are foreign. Sweden has the highest proportion of foreign audit chairs (100%), followed by Denmark (67%). 46% of audit committees in Norway have a foreign chair. The lowest proportion is in Finland, where foreign audit chairs make up 20% of all audit chairs. 36% (88) of audit committee members are foreign.
The average fixed fee paid to audit chairs is €34,863; members average €20,402.
Remuneration committee
The sample covers 91 remuneration committees — 75 are standalone RemCo’s and 16 are combined remuneration and nomination committees. 73% (64) of remuneration chairs also chair the board. On average, stand-alone RemCo’s convened 5.1 times in the year under review; combined remuneration and nomination committees met 5.3 times.
17% (15) of all remuneration committee chairs are women. Remuneration committees in Norway have the most female chairs (35%, 6), followed by Sweden (19%, 4) and Finland (12%, 3). Denmark has the lowest proportion of female remuneration chairs — only two (8%) are women. 36% (75) of remuneration committee members are women.
32% (28) of remuneration committee chairs are foreign. The greatest proportion is found in Denmark (63%, 15), followed by Norway (29%, five), Finland (19%, five) and Sweden (14%, three). 35% (73) of remuneration committee members are foreign.
The average fixed fee paid to chairs is €19,937; members average €13,751.
Sustainability committees
Customers and other stakeholders across all sectors are becoming increasingly aware of environmental, social and governance (ESG) issues, and the tougher levels of scrutiny they are subject to. Sustainability is now recognised as a central part of corporate social responsibility and boards must ensure that their oversight responsibilities are robust enough to keep track of, and to swiftly respond to, sustainability issues. Some boards have also chosen to establish a sustainability committee.
Across the region, there are seven board committees related to sustainability, convening an average of 3.7 times in the period under review.
The main duties of sustainability committees include reviewing and overseeing the implementation of a sustainability-related strategy, and monitoring risks to the company relating to sustainability.
50% (four) of sustainability committee chairs are women and 63% (five) are foreign.
The average fixed fee remuneration for chairs of sustainability-related committees is €25,649; members average €10,993.
Our perspective: The board’s role in sustainability
Seven boards in our sample had sustainability-related committees. However, having a dedicated ESG committee does not automatically mean the issue is prioritised by a board. Some companies in Corporate Knight’s 2022 annual ranking of the world’s most sustainable companies are in our sample and have not established a sustainability committee, including Vestas, which was the highest ranked.
We have found that there is no one best way to handle sustainability in the boardroom. Some strategies that are commonly adopted include having ESG oversight at full board level or incorporating ESG responsibility in other committee agendas. A few organisations have opted to appoint an ESG expert to the board.
Increasingly, we see the CEO taking the lead in providing ESG expertise in board discussions. Sustainability has become an integral part of most (if not all) businesses’ social licence to operate, which means that CEOs must have an in-depth understanding of the issues in order to formulate and execute strategy.
Sustainability has to be linked to a clearly defined purpose, and it is the board’s responsibility to focus on long-term sustainability goals and ensure that they are not sacrificed in the face of short-term setbacks.
Other committees
The most common committee outside audit, remuneration and nomination committees is a stand-alone risk committee (11 committees). This is followed by technology committees (10) and sustainability-related committees (seven).
All the stand-alone risk committees occur in boards in the financial services sector. A variety of companies have a technology committee. Five of the seven sustainability-related committees occur in Norwegian boards (Telenor, Nordic Semiconductor, Equinor, Tomra Systems, and Vär Energi); the remaining two are Finnish (Stora Enso and Nordea).
Chairs and members of audit committees are the highest paid. Chairs receive €35,593 while members receive €20,352
Board committees
|
Sample size |
Avg. meetings |
Average committee chair fee |
| Audit |
98 |
6.2 |
€35,953 |
| Remuneration |
75 |
5.1 |
€19,937 |
| Nomination |
17 |
4.3 |
€29,505 |
| Stand-alone risk |
11 |
5.1 |
€19,937 |
| Technology |
10 |
3.9 |
€30,152 |
| Sustainability |
7 |
3.7 |
€25,649 |
| Joint nomination & remuneration |
16 |
5.3 |
€ 30,344 |