Board Working Order
1. Articles of Association
According to the Articles of Association the Company has a Board of Directors (hereinafter "Board") that consists of three to eight Board members elected by the Annual General Meeting (hereinafter "AGM") for a term of one year.
The Board elects the Chairman and the Vice Chairman amongst itself.
The Board constitutes a quorum when at least half of the members including the Chairman or the Vice Chairman are present at the meeting. Board decisions are made by simple majority votes. If the votes are tied the Chairman of the Board has the casting vote.
2. Other Laws and Regulations
The Board must act according to Finnish laws and regulations, especially the Companies Act and the Securities Markets Act. In addition, the Board has to comply with the rules and regulations of the exchange on which the Company is listed.
3. Board's Tasks
The general task of the Board is to use its powers to increase the value of the shareholders' holdings in the long run in line with the interests of the Company and all of its shareholders.
In order to fulfill its general tasks the Board shall
- decides on its Working Order and updates it annually, as necessary
- appoints and discharges the CEO and determines his or her salary and bonuses
- approves and maintains a successor plan for the CEO
- approves the appointment of employees reporting to the CEO and decides on the terms and conditions of their employment and remuneration
- approves the corporate structure and the company’s organization
- proposes management incentive schemes to the General Meeting, as necessary
- ensures that the company has organized internal control of accounting and financial management as well as to monitor the effectiveness of supervision
- determines the company's long-term objectives and to monitor their implementation
- assess the company's annual action plans
- approves the company's annual financial targets
- reviews, at least once a year, the company’s major risks and issues the necessary instructions to manage those risks
- reviews and approves the company's interim reports, Financial Statements and the Board of Directors Report as well as the Corporate Governance Statement
- has a discussion with the company’s auditor at least once a year
- makes the most important business decisions such as acquisitions, divestitures, major contracts and liabilities, investments and financing arrangements
- determines the strategy of the company and oversees its implementation
- approves the business plan and budget drafted on the basis of the strategy and oversees their execution
- sets approval limits for investments and commitments, which cannot be exceeded without the Board of Directors approval
- decides on the dividend policy and prepares a proposal to the AGM regarding payment of dividend
- monitors and manages any conflicts of interest between the company's management, Board members and shareholders
- carries out a self-evaluation of its own work, performance and competence on a yearly basis
- reviews and decides on all other matters that are the business of the Board of Directors according to the Companies Act or other legislation.
4. The Working Plan
After the AGM the Board decides on a plan for its work, which includes:
- a meeting schedule
- the most important items to be considered in specific meetings
- venue and visits to Company plants or other places
When assessing the Board's work before the AGM the Board shall consider if it has acted in accordance with its plan. The Board shall also review the rules and procedures of the Board. The Board shall also evaluate the effectiveness of the Board's work. The results of the evaluation shall be taken into account by the Nomination Committee.
5. Tasks of the Chairman of the Board
The task of the Chairman is to chair the Board meetings and manage the Board's work so that the Board's responsibilities are met. The Chairman shall
- ensure to that the meetings set out in the meetings schedule are held
- call the Board to extra ordinary meetings when necessary
- ensure to that the proposals and the supporting material are sent to Board members five (5) working days before the meetings
- accept the agenda prepared by the CEO
- ensure to that the minutes of the meetings are kept and that they are signed by the Chairman with a Board member appointed by the Board
- be in contact with the CEO and follow up the on the management of the Company business operations
- meet the other Board members between the meetings to discuss the Company's business
- be in contact with the Company's shareholders and other stakeholders
- be responsible for the assessment of the Board's work.
6. The Board Committees
The Board of Directors elects members to an Audit Committee, a Remuneration Committee and/or a Nomination Committee, from amongst its members each year after the AGM when needed. Committees will not be established if the extent of the Company's business does not require it, in which case the Board itself performs the tasks of the respective committees.
The committees assist the Board of Directors by preparing matters falling within the competence of the Board. The Board remains responsible for the duties assigned to the committees. The committees have no decision-making authority of their own, and the decisions within its competence are taken collectively by the Board.
The Audit Committee must have at least three members. The members of the audit committee must have the expertise and experience required for the duties of the committee and the majority of the members must be independent of the company. In addition, at least one member of the Audit Committee must be independent of the company's major shareholders. The rules and procedures of the Audit Committee are set out in Appendix 1.
The Compensation Committee consists of three members. The task of the Compensation Committee is to prepare, for the decision of the Board, the remuneration of the CEO and the members of the Management Team as well as the incentive programs for the CEO and the management.
The Compensation Committee also prepares the matters relating to the appointment of the CEO and his/her deputy and identifies their possible successors.
The Nomination Committee, which consists of three Board members, prepares the proposal for the election of Board members and their remuneration to be presented to the AGM.
The proposal for Board composition and remuneration shall be published in the notice of meeting for the AGM.
The results of the Board's assessment shall be taken into account when planning the proposal of the Nomination Committee.
The Board members shall be competent and the majority shall be independent of the Company and at least two of the directors representing this majority need to be independent of the significant shareholders of the Company. Members must have know-how in the following areas at least:
- the Company's business area
- experience in management of a publicly listed company
- risk management
- international business
- merges and acquisitions
- corporate governance
The Committees shall keep minutes of the meetings and report to the Board on their work. Minutes of Committee meetings shall be distributed to the Board.