Annual Report 2010

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CORPORATE GOVERNANCE REPORT 2010 The Swedish Code of Corporate Governance The Swedish Code of Corporate Governance (Code of Governance) is based on the tradition of self-regulation and acts as a complement to the corporate governance rules contained in the Companies Act, the Annual Accounts Act and other regulations such as the Rule Book for Issuers and generally acceptable behaviour in the securities market. The Code of Governance can be found on the website www.bolagsstyrning.se. A revised Code of Governance entered into force on 1 February 2010 and certain rules became applicable in stages during the course of 2010. Lundin Petroleum has applied the new rules introduced in 2010 when such new rules entered into force. The Code of Governance is based on the “comply or explain principle”, which entails that a company may choose to apply another solution than the one provided by the Code of Governance if it ﬁnds an alternative solution to be more appropriate in a particular case. The company must however explain why it did not comply with the rule in question and describe the company’s preferred solution, as well as the reasons for it. Lundin Petroleum complied in all major aspects with the Code of Governance in 2010, other than in a few instances as mentioned in this report. Lundin Petroleum’s Articles of Association Lundin Petroleum’s Articles of Association, which form the basis of the governance of the Company’s operations, set forth the Company’s name, the seat of the Board, the object of the business activities, the shares and share capital of the Company and contain rules with respect to the Shareholders’ Meetings. The Articles of Association can be found on the Company’s website www.lundin-petroleum.com. Lundin Petroleum’s Code of Conduct Lundin Petroleum’s Code of Conduct is a set of principles formulated by the Board to give overall guidance to employees, contractors and partners on how the Company is to conduct its activities. As an international oil and gas exploration, development and production company operating globally, the aim of the Company is to explore for and produce oil and gas in the most economically eﬃcient, socially responsible and environmentally acceptable way, for the beneﬁt of its shareholders, employees and co-venturers. The Company applies the same standards to its activities worldwide to satisfy both its commercial and ethical requirements. The Code of Conduct was adopted at the formation of Lundin Petroleum in 2001 when no external rules or regulations regarding corporate governance, which the Company had to follow, existed. The Company decided to make its values, principles and commitment explicit in order to set the necessary framework for its ethical conduct, against which the Company could be assessed and evaluated. Compliance with the Code of Conduct is reviewed on an annual basis by the Board. The Code of Conduct can be found on the Company’s website www.lundin-petroleum.com. Main external rules & regulations affecting Lundin Petroleum’s corporate governance: » Swedish Companies Act » Swedish Annual Accounts Act » The NASDAQ OMX Stockholm Rule Book for Issuers » Swedish Code of Corporate Governance Main internal rules & regulations affecting Lundin Petroleum’s corporate governance: » The Articles of Association » The Code of Conduct » Policies, Guidelines & Procedures » The Green Book Management System » The Rules of Procedure of the Board, instructions to the CEO and for the financial reporting and the terms of reference of Board committees Lundin Petroleum’s Policies, Guidelines and Procedures & Management System While the Code of Conduct provides the Company’s ethical framework, dedicated policies, guidelines and procedures have been developed to outline speciﬁc rules and controls applicable in the diﬀerent business areas. The Company has policies, guidelines and procedures covering for example Operations, Accounting and Finance, Corporate Responsibility including HSE (Health, Safety and Environment), Legal, Information Systems, Human Resources and Corporate Communications. The policies, guidelines and procedures, which are available internally, are reviewed on a continuous basis and are adjusted as and when required. In addition, Lundin Petroleum has a dedicated HSE Management System (Green Book), modelled after the ISO 14001 standard, which gives guidance to management, employees and contractors regarding the Company’s intentions and expectations in HSE matters. The Green Book serves to ensure that all operations meet Lundin Petroleum’s legal and ethical obligations, responsibilities and commitments within the HSE ﬁeld. A more detailed description of the Green Book is available on the Company’s website www.lundin-petroleum.com. Lundin Petroleum’s Rules of Procedure of the Board The Rules of Procedure of the Board contain the fundamental rules regarding the division of duties between the Board, the committees, the Chairman of the Board and the Chief Executive Oﬃcer (CEO). The Rules of Procedure also include instructions to the CEO, instructions for the ﬁnancial reporting to the Board and the terms of reference of the Board committees. The Rules of Procedure, which are adopted annually by the Board, are in the process of being up-dated in view of the modiﬁed Code of Governance and will be considered by the Board during the ﬁrst half of 2011. 42 Lundin Petroleum ANNUAL REPORT 2010

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