Board of Directors

The Board of Directors is responsible for the administration and the proper organization of the operations of the company. The Board acts in accordance with Articles of Association and the applicable legislation as well as the instructions and recommendations of the Financial Supervisory Authority and Nasdaq Helsinki Ltd. In accordance with Articles of Association, the company’s Board of Directors comprises at least four and maximum eight members. The Annual General Meeting elects all Board members. The Board of Directors elects a Chairman and a Vice Chairman from among its members. Under the Articles of Association, the term of the Board members is three years. The term begins at the close of the General Meeting at which the member is elected, and ends at the close of the third subsequent Annual General Meeting following the member’s election.

Corporate Governance Statement 2017

The primary goal in Board member election is to gather to the Board of Directors capability, expertise and experience from various technologies, international relations, global business and strategically significant industries. The Board should be considered as a whole that is capable of managing its tasks and duties in the best possible way. The goal of the election of the members of the Board of Directors is to ensure that the Board supports the development of the company’s current and future business. In addition, the Board should consist of members of both genders and the members should have the chance to allocate a sufficient amount of time to managing their tasks. The goal is that at least 25% of Board members are always men and women.

The majority of the Board members must be independent of the company and at least two members in this majority must be independent of the company’s major shareholders. The Board of Directors evaluates the independence of the members annually based on overall evaluation. This evaluation of a member takes into account information and analysis provided by the member himself/herself.

The Board of Directors self-evaluates its operations, way of working as well as fulfilment of the diversity goals annually.

After election, new Board members will be familiarized with company’s operations. This includes presentations by the top management and induction with the company’s operations, in which the newly elected Board members are given information on the company’s business, strategy and long-term targets as well as on significant economic, accounting and risk management.

Corporate Governance Statement 2017

The Board of Directors convenes at least eight times each year and if otherwise needed. The President and CEO and the Chief Financial Officer also attend Board meetings. The other members of the Management Group attend Board meetings as required on the invitation of the Board of Directors. The Board of Directors may, on the basis of the Chairman’s decision, establish working groups from among its members in individual cases in order to prepare the matters allocated for it in order to ensure the effective organization of the Board of Directors’ work.

The Board of Directors operates in accordance with an approved written charter. Meetings may, if necessary, be held as conference calls or e-mail meetings. Minutes of meetings are compiled in English, with annually running numbering. The General Counsel acts as the Secretary of the Board of Directors.

A member of the Board of Directors is not allowed to participate if he/she is biased in that issue between him/her and the company or between the company and a third party when there is possibility to achieve essential advantage to him/her, which may conflict with the advantage of the company’s interest.

The members of the Board of Directors are bound by obligations related to commercial and trade secrets as well as by the restrictions and requirements of the Market Abuse Regulation (EU) N:o 596/2014 (MAR) and the restrictions and obligations of Insider Policy. The Board and its members must in their decision-making and other activities act in accordance with the interest of the company and all its shareholders, and in accordance with the principle of due care.

The Board will have a quorum when more than half of members are present. Decisions are made on a simple majority basis, and when the votes are even, the Chairman has the casting vote. When the votes for election of the Chairman are even, the Chairman is elected by drawing lots.

The President and CEO is responsible for the execution of the Board of Directors’ decisions and reports to the Board on deficiencies or problems observed during the execution.

Regular meetings include

• financial statements meeting,
• meeting prior to an Annual General Meeting,
• Board’s organizing meeting,
• Interim Report meetings (2 times),
• Half Year Financial Report meeting,
• business review and strategy meeting, and
• action plan, budget and incentive matters meetings

Main responsibilities of the Board of Directors are

• to decide on the election and dismissal of the President and CEO,
• to decide on the employment terms of the President and CEO,
• to decide on the election and dismissal of the members of the Management Group and their job descriptions based on the President and CEO’s proposition,
• to ensure that the company has organized internal control of accounting and financial management as well as to monitor the effectiveness of supervision,
• to determine the company’s strategy and oversee its implementation, and to approve the strategic plans of the business areas,
• to determine the company’s long-term targets and to monitor their implementation, and to accept business areas’ long-term targets,
• to assess the company’s and its business areas’ annual action plans,
• to approve the company’s and its business areas’ financial targets
• to make the most important business decisions such as approve acquisitions,divestitures, major contracts and liabilities, investments and financing arrangements,
• to set approval limits for investments and commitments, which cannot be exceeded without Board of Directors’ approval,
• to review and approve a Financial Statement Release, Financial Statements and the Board of Directors’ Report and Corporate Governance Statement,
• to make a dividend proposal to General Meeting,
• to review and approve Interim Reports and Half Year Financial Report,
• to monitor evaluation and management of risks related to company’s strategy and business operations, and
• to decide on management remuneration and incentive systems.

The responsibilities of the members of the Board of Directors when performing their duties is to always act with due care and in good faith while using their judgment, based on sufficient information, in a manner they reasonable believe to promote the interests of the company.

The President and CEO and members of management, as instructed by the President and CEO, represent the company in relation to shareholders, investors, media and other stakeholders. The Board members usually direct third-party enquiries to the President and CEO. The Board of Directors is represented by the Chairman of the Board of Directors.

Corporate Governance Statement 2017

Duties of the Chairman of the Board of Directors include chairing the Board’s meeting and managing the Board’s work so that it can fulfill its duties.

Chairman of the Board of Directors shall

• ensure that the meetings are held according to schedule,
• ensure that the Board of Directors is convened for the extraordinary meetings, if necessary,
• ensure that the presentations and supporting materials are delivered to the Board members within the agreed time and early enough prior to the meeting,
• approve the agenda prepared by the President and CEO,
• take care of ensure the documentation of the meetings and of the decisions made,
• keep in contact with the President and CEO and monitor the company’s business performance, and
• be in charge of evaluating the work done by the Board of Directors.

Corporate Governance Statement 2017

The Board of Directors has two permanent committees: an Audit Committee and a Remuneration and HR Committee. The members and the chairs of the Committees are appointed annually from among the members of the Board of Directors in accordance with the charter of the respective committee. The Board of Directors may establish committees for duties assigned by the Board. The Board of Directors confirm the charter for the committees. The committees assist the Board of Directors by preparing matters that are within the scope of responsibilities of the Board. The committees are not decision-making or executive organs; instead, the Board of Directors is responsible for the tasks it has assigned to the committees, unless it has been stated otherwise in the committees’ charters. The committees keep minutes of their meetings in English; minutes are available to the members of the Board of Directors. The secretary of the Board of Directors acts as the secretary of the committees.
Corporate Governance Statement 2017

Audit Committee and its Charter
 

The Audit Committee assists the Board of Directors in supervising the company’s accounting and asset management, risk management as well as in organizing external and internal audit. The Audit Committee manages its tasks in accordance with the charter approved by the Board of Directors, the Securities Market Association’s Finnish Corporate Governance Code and the applicable laws and regulations.

The Audit Committee comprises at least three members, appointed annually by the Board of Directors among its members. The members of the committee must be independent of the company and at least one member must also be independent of significant shareholders of the company. A member of the Audit Committee may not participate in the company’s or its group company’s daily management. The committee convenes at least five times a year. The President and CEO and the Chief Financial Officer also attend the committee meetings. Other responsible employees attend the committee meetings as required on the invitation of the committee. The committee reports of its actions to the Board of Directors in the following Board of Directors’ meeting.

Main Responsibilities of the Audit Committee are

• to review Interim Reports, Half Year Financial Report, Financial Statement Release and Financial Statements as well as Board of Directors’ Report,
• to approve goodwill testing,
• to approve management’s essential estimates included in Financial Statements, Financial Statement Review, Half Year Financial Report and Interim Reports,
• to prepare a dividend proposal,
• to accept accounting and calculation principles, as well as their changes,
• to monitor non-financial reporting and integrated reporting,
• to monitor internal audit,
• to approve internal auditing plan and cost estimate,
• to monitor and evaluate financial reporting and forecast processes,
• to monitor and evaluate efficiency of the company’s internal control and audit, risk management and quality auditing, and approve related plans,
• to assess compliance with laws and regulations,
• to monitor compliance with company’s Code of Conduct,
• to monitor audit and Key Audit Matters,
• to prepare a decision proposal on the election of the auditor,
• to monitor and evaluate independence of the statutory auditor or audit firm, and particularly in relation to provision of non-auditing services to the company,
• to monitor provision of non-auditing services by audit firms,
• to approve plan and cost estimate of non-auditing services by audit firms,
• to review Corporate Governance Statement,
• to approve company’s Treasury Policy and to monitor its financing position,
• to monitor company’s tax situation,
• to monitor compliance of data protection and privacy regulation and policies, and
• to approve Audit Committee’s annual plan and evaluate committee’s performance.
  
  Corporate Governance Statement 2017