Management code

‍Companymanagement code
Qred is a banking company licensed to carry out banking activities as defined in the Banking and Financial Business Act (2004:297).

General Meeting

The general meeting is Qred's highest decision-making body where shareholders exercise their voting rights and decisions are made on, among other things, the balance sheet and income statement in the annual report, discharge from liability, board members for the coming year, and the election of auditors.

Board of Directors

Qred's Board of Directors is responsible for Qred's organisation and management of its affairs in accordance with, among other things, the Swedish Companies Act, and has ultimate responsibility for ensuring that operations are conducted in accordance with good internal governance and control. 

Qred's internal governance and control is formalised through internal regulations in the form of policies and instructions as well as supporting routine descriptions, process descriptions and checklists.  

The Board of Directors meets at least four times a year and decides on the internal rules for management and control, while the CEO is responsible for their implementation in Qredi's operations, as directed by the Board of Directors.

The Board is also responsible for ensuring that Qred conducts its operations in an ethically responsible and professional manner, that conflicts of interest are identified and managed in an adequate and appropriate manner and that Qred maintains a sound risk culture. 

Chairman of the Board

The Chairman of the Board leads the Board's work and ensures that the Board fulfils its obligations under the Swedish Companies Act and other applicable rules. The Chairman of the Board shall, through contact with the CEO, follow Qred's development.

Qred's Chairman of the Board is responsible for conducting an annual suitability assessment to ensure that Board members, the CEO and senior management are individually suitable for their assignments at any given time. This involves an assessment of whether they:

• Are of sufficiently good repute.
• Possess sufficient knowledge, skills and experience to fulfil their duties.
• Can act with honesty, integrity and the ability to think independently to effectively assess and challenge decision-making where necessary.
• Are able to allocate sufficient time to fulfil their duties.

The suitability assessments and the result is documented. 

Committees

In order to support the Board in certain specific areas, the Board has established two committees that are responsible for preparing the basis for decisions on issues that fall within the remit of each committee: 

• Remuneration Committee 
• Risk and Audit Committee

The members of the Remuneration Committee are appointed annually and include the Chairman of the Board and one other member of the Board. The Compensation Committee meets twice a year and the CEO and other directors may attend meetings when invited.

The Risk and Audit Committee meets quarterly before the Board meeting and consists of 2-3 Board members and 1-3 senior managers. The Board appoints one of the members of the Committee as its Chairman. At least one member of the Committee shall have experience in identifying, assessing and managing risks of the Company and its direct or indirect subsidiaries, and at least one member shall have accounting or auditing expertise.

The Committees assist the Board with expertise and prepare appropriate advice and preparation of issues within their areas of responsibility. The work of the committees is further regulated in the guidelines.

CEO

The Board appoints Qred's CEO, who is authorised to make decisions on all matters that are not to be decided by the Board or General Meeting. The CEO is responsible for the day-to-day management according to the Board's instructions and for such obligations incumbent on the CEO under external regulations.

The CEO is responsible for ensuring that policies, instructions and routine and process descriptions are implemented within the organisation and that all employees have access to relevant documentation.

Management team

The CEO is supported by a group of advisers, the management team, whose aim is to ensure the proper and efficient running of the company. The management team must always take into account the interests of the company and its customers. The management group should normally meet when necessary, but at least once a month. The Managing Director convenes and chairs the meetings of the Management Group. Meetings should have an agenda which is recorded in the minutes of the meeting.

Internal management and control

Three lines of defence

Qred applies the principle of three lines of defence to define where in the organisation responsibility for and control of the organisation's risk-taking should be located.

The first line of defence consists of the business operations, including the CEO, who is responsible for and controls the daily risk management and compliance.

The second line of defence consists of the Risk Management and Legal Department, which, among many other tasks, monitors and reports on Qred's risks and how the company complies with internal and external rules. The second line of defence is overseen by individuals who report primarily to the CEO and are generally an independent audit unit of the CEO, but must report directly to both the Board and the CEO.

The third line of defence consists of the Internal Audit function. The Internal Audit function reports directly to the Board of Directors and is the Board's independent control body. The third line of defence reviews and evaluates the first and second lines of defence.

Remuneration policy and system

Remuneration policy

Qred has a remuneration policy (the "Policy") which is intended to describe and establish the principles of how the company's remuneration system is designed, managed and controlled. The Policy should be consistent, promote effective risk management and prevent excessive risk taking. In addition, the Policy should ensure that the interests of clients are not jeopardised by the company's incentive scheme. The remuneration system should contribute to Qred's ability to attract and retain qualified staff and help achieve the company's long-term objectives.

The Board of Directors is ultimately responsible for the content, establishment, implementation and compliance of the remuneration policy. The Policy shall be regularly, at least annually, reviewed and, if necessary, updated prior to approval by the board. A risk analysis shall form the basis for the Board's decision to adopt the Policy. The Board shall further decide on:

• Remuneration of the Management Team,
• Remuneration of the control functions,
• The outcome and payment of any variable remuneration, and
• measures to monitor the application of the Policy.

Remuneration Committee

The Board has appointed a Remuneration Committee.

The Remuneration Committee is responsible for the annual monitoring and evaluation of the company's remuneration system and for preparing issues related to the remuneration system for the Board. The Remuneration Committee also monitors the development of the remuneration system and the unfair pay gap between men and women.

The board of directors shall, where applicable, adhere to the remuneration decisions taken by the annual general meeting.

Risk analysis

An annual risk analysis shall be made by the Company in order to identify employees whose duties have a significant impact on the Company's risk profile. The analysis shall consider all risks to which the Company is or may be exposed, including the risks associated with this Policy and the Company's remuneration system. The analysis shall be documented and attached to this Policy. The Remuneration Committee shall review the risk analysis before the Policy is adopted by the Board of Directors.

Compensation system

General principles

The Company's remuneration system shall be designed in a way that is compatible with and promotes sound and effective risk management and prevents excessive risk-taking. Remuneration systems shall encourage employees to perform well and help the Company to attract and retain competent employees. The remuneration system shall be applied in a gender-neutral manner.

Fixed compensation

Fixed salary

The basis of the Company's remuneration system is a fixed salary. Fixed salary is determined on a rolling basis, with the first review usually taking place 12 months after the start of employment. As a general rule, salary reviews shall take place once a year. 

Employees' fixed salary shall be determined on the basis of objective criteria and be in line with market conditions. In the case of new employment, the fixed salary shall be determined based on the market situation for the corresponding profile and the value that the employee is expected to add to the Company. In subsequent salary reviews and in the event of a change of job role, an individual assessment shall form the basis for setting the salary, based on parameters such as work performance, independence, initiative, responsibility and personal development. Discriminatory or other unjustified differences between employees' fixed salaries shall not occur.

In connection with a salary review, the salary setting manager shall conduct a development and salary discussion with the employee, where the connection between work tasks, work results and performance in general as well as salary development is made clear to the employee. 

Vacation benefits are determined in accordance with current legislation and individually in connection with employment and salary reviews.

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Variable fees‍

The Board of Directors decides on variable remuneration for members of the Executive Board and employees whose duties have a significant impact on the company's risk profile. The CEO may decide whether other employees (outside this group) are eligible for variable remuneration.

The Company applies a system of variable remuneration in the form of performance-based bonuses for the CEO, the Management Group and most functions and business units. Performance-based bonuses shall be designed in a way that meets the criteria in this section and the Policy in general. The criteria for receiving variable remuneration shall be based on the Company's overall performance as well as the employee's individual performance and the performance of the business unit in which the employee works.

The variable remuneration shall be based on :

1. Achievement of financial targets related to the budget;
2. operational business objectives and/or
3. Performance-based targets related to the performance of the individual or group.

Results that form the basis for calculating variable remuneration shall mainly be based on risk-adjusted profit measures. The Company shall take into account both current and future risks as well as cost of capital and liquidity required by the business. The Company shall ensure that variable remuneration is based on long-term sustainable results by assessing the results in a multi-year perspective.

Further, the Company's underlying economic cycle and business risks shall be taken into account when the variable remuneration is approved and paid out.

When determining variable remuneration, the assessment of employees' individual results and performance shall take into account both financial and non-financial factors. Among the non-financial factors, the Company shall consider, inter alia, compliance with internal rules, accountability, customer satisfaction and safeguarding of customers' interests.

If the Company's control functions for risk control, compliance and internal audit are employed by the Company and are entitled to variable remuneration, the Company shall ensure that such remuneration is determined on the basis of objectives linked to each control function, regardless of the performance of the business areas they review.

The Company shall ensure that any variable remuneration does not affect the Company's ability to maintain a sufficient capital base or to strengthen the capital base if necessary.

The Company shall maintain a reasonable balance between employees' fixed and variable remuneration. Employees' fixed remuneration should always be at a high enough level to set the variable part of the remuneration to zero. The total variable remuneration that employees receive may never be at a level that risks undermining the Company's capital base and ability to generate a positive result in the long term. The total variable remuneration to an employee shall never exceed 100% of the employee's annual fixed remuneration. The Company's sales function, which is completely disconnected from the Company's credit function and credit decisions, is exempt from the above limitation, but can never exceed €10 000 per month in variable remuneration.

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Guaranteed variable remuneration

The company does not primarily guarantee variable remuneration to employees. If there is a specific reason for guaranteeing a variable bonus, the Board of Directors may guarantee a variable bonus to an employee, but this must be done at the time of employment or during the first year of employment.

‍EthicalGuidelines and Conflicts of Interest‍

Qred has established an ethics policy with the aim of ensuring that the business is conducted in an ethically responsible and professional manner in line with Qred's internal and external rules. The purpose of this Policy is further to promote transparency, integrity and a corporate culture that protects Qred's operations from corruption.

The Policy sets common standards to promote Qred's ethical approach and to facilitate employees in situations where applicable rules are missing or contain limited guidance.

Conflicts of interest

Qred has established a Policy and an instruction for managing conflicts of interest that may arise in the business.

Qred's employees are always expected to act in Qred's best interests and exercise good judgement that is not influenced by private interests or divided loyalties.  

No employee may participate in managing a case or making a credit decision that concerns a relative, a relative's company or otherwise when there may be a risk of fraud. An employee may also not handle matters in which the employee has a personal interest or matters in which such an interest is held by a relative of the employee or with a company in which the employee or a relative of the employee has a substantial interest. In such a situation, the employee must be exempted from credit processing and the credit decision.

Qred's employees shall not purchase goods or services from related parties without prior approval from the CEO, and the CEO shall not purchase goods or services from related parties without prior approval from the board.