This section describes important business relationships between ABB and its Board and Executive Committee members, or companies and organizations represented by them. This determination has been made based on ABB Ltd’s Related Party Transaction Policy. This policy is contained in the ABB Ltd Board Regulations & Corporate Governance Guidelines, a copy of which can be found at www.abb.com/about/corporate-governance
Vale S.A. and its subsidiaries (Vale) and ABB have entered into a framework agreement establishing general terms and conditions for the supply of products, systems and services among their respective group subsidiaries. ABB supplies Vale primarily with process automation products for mineral systems. The total revenues recorded by ABB in 2013 relating to its contracts with Vale were approximately $80 million. Roger Agnelli was president and CEO of Vale until May 2011.
Atlas Copco AB (Atlas Copco) is an important customer of ABB. ABB supplies Atlas Copco primarily with drives and motors through its Discrete Automation and Motion division. The total revenues recorded by ABB relating to business with Atlas Copco were approximately $70 million in 2013. Jacob Wallenberg was vice chairman of Atlas Copco until April 2012.
ABB has an unsecured syndicated $2-billion, revolving credit facility. As of December 31, 2013, SEB Skandinaviska Enskilda Banken AB (publ) (SEB) and Barclays Bank PLC (Barclays) had committed to $71 million out of the $2-billion total. In addition, ABB has regular banking business with SEB and Barclays. Jacob Wallenberg is the vice chairman of SEB and Diane de Saint Victor is a non-executive director of Barclays.
After comparing the share of revenues generated from ABB’s business with Vale and Atlas Copco, and after reviewing the banking commitments of SEB and Barclays, the Board has determined that ABB’s business relationships with those companies are not unusual in their nature or conditions and do not constitute material business relationships. As a result, the Board concluded that all members of the Board are considered to be independent directors. This determination was made in accordance with ABB Ltd’s Related Party Transaction Policy which was prepared based on the Swiss Code of Best Practice for Corporate Governance and the independence criteria set forth in the corporate governance rules of the New York Stock Exchange.