Annual Report 2011

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CORPORATE GOVERNANCE REPORT 2011 INTRODUCTION – GOVERNANCE STRUCTURE The object of Lundin Petroleum’s business is to explore, develop and produce oil and gas and to develop other energy resources, as laid down in its Articles of Association. The Company aims to create value for its shareholders through exploration and organic growth, while operating in an economically, socially and environmentally responsible way for the benefit of all its stakeholders. To achieve this value creation, Lundin Petroleum has, during its ten year history applied, and continues to apply, a governance structure that favours straightforward decision making processes, with easy access to relevant decision makers, while nonetheless providing the necessary checks and balances for the control of the activities, both operationally and financially. Internal governance instruments and practices, such as the Code of Conduct and the Rules of Procedure of the Board, have existed since the creation of the Company in 2001, however the governance structure has continuously evolved following internal developments as well as changes to applicable legislation, stock exchange rules and other regulations. In particular, the introduction of a Swedish Code of Corporate Governance on 1 July 2005, and its revised versions, have led to developments in the corporate governance structure of Lundin Petroleum, e.g. the creation of a Nomination Committee, implementation of more detailed Rules of Procedure, in-depth consideration of independence requirements and improved governance routines and practices in general. After ten years of corporate governance at Lundin Petroleum, the Company remains committed to applying good corporate governance practices that are best suited for the Company and its activities, to ensure that the Company is managed in an effective manner, in the best interests of all shareholders, for continued delivery of value creation for shareholders. This Corporate Governance Report has been subject to a review by the Company’s external auditor. LUNDIN PETROLEUM – GOVERNANCE STRUCTURE The Shareholders’ Meeting is the highest decisionmaking body of Lundin Petroleum where the shareholders exercise their voting rights to inﬂuence the operations of the Company. The shareholders appoint at each Annual General Meeting the members of the Board and the Chairman of the Board, further to proposals presented by the Nomination Committee. The shareholders appoint the external auditor further to proposals presented by the Nomination Committee and the auditor reports back to the shareholders and the Board on ﬁndings in the audit process. Nomination Committee Shareholders’ Meetings The Board has established three committees, the Audit Committee, the Compensation Committee and the Reserves Committee, to oversee the Company’s ﬁnancial reporting and internal controls, to administer the Company’s management compensation programme and to review the Company’s oil and gas reserves reporting. External Auditor Reserves Committee Compensation Committee The internal auditor is tasked with auditing and measuring the eﬀectiveness of the ﬁnancial internal control and reports thereon to the Audit Committee. The Board appoints the President & CEO of the Company, who is in charge of the day-to-day management of the operations, with the assistance of Group management. Board of Directors Audit Committee Internal Auditor CR/HSE Board Representative » An Investment Committee, consisting of the President & CEO, COO, CFO and SVP Operations, has been established by the Board to assist the Board in speciﬁc investment related matters. President & CEO Investment Committee The Board appoints annually a CR/HSE Board Representative to liaise with Group management regarding CR/HSE matters. Group Management 40 Lundin Petroleum ANNUAL REPORT 2011

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