Corporate Governance

Paradox Interactive AB (publ) is a Swedish public limited liability company and is governed based on Swedish law and internal rules and regulations.

The Swedish Code of Corporate Governance is applicable for Swedish companies with shares listed on a regulated market in Sweden. Nasdaq First North Growth Market where the company is listed is not a regulated market but requires companies to apply the Code. Companies must not comply with all rules in the Code, and has the option to apply alternative solutions believed to better fit their purposes, as long as any discrepancies are reported and the alternative solution is described and reasons behind it explained (the principle of ”comply or explain”) in the corporate governance report.

Work of the Board of Directors

Next to the general meeting, the Board of Directors is the highest decision-making body of Paradox and its highest executive body.

According to the Swedish Companies Act, the Board is responsible for the management and organization of the company, meaning that it among other tasks should decide on targets and strategies, ensure routines and systems for the evaluation of the decided targets, continuously evaluate the financial position and development of Paradox and evaluate the executive management. The Board is also responsible to ensure that the annual report, group accounts and the interim reports are produced at the appropriate time. In addition, it appoints the CEO.

The board members are elected each year at the Annual General Meeting until the end of the next AGM. According to the articles of association of Paradox, the board elected at the AGM must comprise at least three and not more than six members. The Chairman of the board is elected at the AGM and has a particular responsibility to lead the work of the board and ensure that its activities are well organized and conducted in an efficient way.

The Board’s work is further controlled by the written rules of procedure that the Board annually review and determine at the constituent meeting. The rules of procedure regulate the Board’s working methods, tasks, decision-making within the Company, the Board’s meeting agenda, the Chairman’s duties and an appropriate division of tasks between the Board and the CEO. An instruction for financial reporting and instructions to the CEO are also decided at the statutory Board meeting. The Board shall also ensure that the company’s external communication is characterized by transparency and is accurate, relevant and clear. The Board is also responsible for establishing the necessary guidelines and other policy documents, such as communications policy and insider policy.

Board committees

Remuneration Committee

In connection with the constituent board meeting the board appointed a remuneration committee consisting of all board members who are not working operationally in the company.

The committee’s task is to prepare the board’s decisions on matters concerning remuneration principles and remuneration and other conditions of employment for senior management. Further, the committee shall monitor and evaluate current and during this year completed programs for variable remuneration to the senior management, and monitor and evaluate the application of the guidelines for remuneration to senior executives which will be adopted by the AGM.

All the remuneration committee meetings are minuted and the protocols are given to the Board together with a verbal report in connection with the board’s decision-making.

Audit Committee

In connection with the constituent board meeting the board appointed an audit committee consisting of all board members.

The committee’s responsibilities are, among other things, to monitor the company’s financial reporting and prepare the board’s work on quality assurance of the same, to monitor the company’s internal control, internal audit and risk management regarding financial reporting, and to establish guidelines for the procurement of additional services from the company’s auditor. In addition, the committee shall assist the nomination committee in the preparation of proposals for election of auditors and auditor fees, and continuously meet the company’s auditor.

All audit committee meetings are minuted and the protocols are given to the board together with a verbal report in connection with the board’s decision-making.