The Nomination Committee of the Board prepares a proposal for the election of the Board members to the Annual General Meeting of Shareholders (AGM) which elects the Board members for the term of office expiring at the close of the AGM following the election. The Articles of Association of the Company do not contain any provisions on a special order of appointment of the Board members but the AGM elects all Board members based on the proposal of the Nomination Committee of the Board. The Board shall elect from among its members the Chairman and the Vice-Chairman. If the CEO of the Company was elected to the Board, the CEO could however not be elected as the Chairman of the Board.
The number of Board members and the composition of the Board shall make it possible for the Board to discharge its duties in an efficient manner. The composition shall reflect the requirements set by the Group’s operations and the development stage of the Group. A person to be elected to the Board shall have the qualifications required by the duties and the possibility to devote a sufficient amount of time to attend to the duties efficiently. According to the Articles of Association of the Company the Board shall consist of a minimum of six and a maximum of nine members. There are no limitations as to the number of terms a person may be elected as Board member or as to the maximum age of a Board member.
The AGM 2018 elected the following eight individuals to the Board:
Mr. Pekka Ala-Pietilä
Mr. Jukka Suominen
Mr. Doug Baillie
Mr. William R. Barker
Ms. Anja Korhonen
Ms. Kerttu Tuomas
Ms. Sandra Turner
Mr. Ralf K. Wunderlich (as of July 1, 2018).
The principles on diversity of the Board have been defined in the Charter of the Board of Directors. The Company strives to ensure strong, versatile and mutually complementary expertise, experience and knowledge in the different businesses and geographical market areas that are important for the Group when electing the Board members. The Board members shall represent various businesses comprehensively and have broad management experience in important market areas for the Group, including the emerging markets.
Factors promoting the diversity of the Board include e.g. Board members’ educational, professional and international background, experience relevant for the position, members’ age structure, representation of both genders in the Board and other personal characteristics. Both genders shall be represented in the Board in a well-balanced manner. In addition, it is important that the Board composition ensures both comprehensive knowledge of the Company through experienced Board members as well as new insights. The Nomination Committee of the Board takes the principles on diversity into account as part of the Company’s succession planning when considering the composition of the Board and the fulfillment of the principles is evaluated annually.
The objectives concerning the diversity of the Board have been achieved well. According to the Nomination Committee the Board composition comprises qualifications defined in the principles on diversity in a balanced way. As regards diversity in terms of gender, both genders are represented in the Board in a well-balanced manner and both genders have been represented in the Board for a long time. Since 2009, two to three Board members have been female thus representing 25–43% of all Board members. At the AGM in 2018 eight members representing four different nationalities were elected to the Board. The age structure of the Board members has been 52–71 years and three Board members have been female and five male. The Board members have international experience in different roles in global companies operating in the different businesses and geographical market areas that are important for the Group. Board members hold or have held management positions and positions of trust in both listed and unlisted companies. All Board members have a university level degree, mainly in technology or finance. More information on the educational and professional background of the Board members is available on Group's website in section Board of Directors.
In the view of the Nomination Committee the current composition of the Board ensures well both comprehensive knowledge of the Company and new insights. The Board strives to ensure that experienced Board members with longer history in the Company’s Board and with wide knowledge of the Company’s various stages transfer their Company specific knowledge and expertise to the new members thereby ensuring that the knowledge stays in the Board also in the future.
All Board members are non-executive. The Board considers all Board members independent of the Company. It was noted in the consideration that despite Jukka Suominen having served as a director for more than 10 consecutive years, the Board has determined no reasons justifying him to be considered dependent of the Company. The evaluation has been made based on the actual circumstances from both the perspective of the Company and the director in question. The Board also considers all Board members except Jukka Suominen independent of the significant shareholders of the Company. According to his own notification and an overall evaluation by the Board, Jukka Suominen is dependent of the significant shareholder of the Company, The Finnish Cultural Foundation.
|William R. Barker||-|
|Ralf K. Wunderlich||16,350|
The shareholdings include the Company’s shares owned by the Board members and by any potential corporations over which a Board member exercises control. Board members do not own any shares in any other Group companies than the Company. Information on the remuneration of the Board members is available in the Remuneration Statement issued and published in connection with the Directors’ Report and available in section Remuneration.
Up-to-date information of the shares owned by the Board members can be found here.
In addition to the powers vested in the Board by the Companies Act and the Articles of Association, the essential duties and working principles of the Board are defined in the Company’s Charter of the Board of Directors which was last updated in 2016.
The responsibilities and duties of the Board include, among other things,
- organizing the Company’s management and operations including e.g.
- appointing and dismissing the CEO and approving the proposals by the CEO for GET members’ appointments and dismissals
- deciding on the compensation of the CEO and other GET members and annually reviewing the performance of the CEO and other GET members
- defining the Group’s ethical values and methods of working including e.g. the approval of the Company’s Code of Conduct
- directing the Company’s business and strategy including e.g.
- establishing strategic and financial targets as well as dividend policy and approving the strategic plans and budget as well as monitoring their implementation
- approving acquisitions and divestments as well as capital expenditure proposals exceeding EUR 10 million or proposals which are otherwise of material importance to the Group
- discussing and approving of financial statements, Directors’ Report, interim reports, Corporate Governance Statement, Remuneration Statement and Corporate Responsibility Report
- financial communication and outlook
- internal control and risk management and
- preparation of matters to be resolved by the AGM.
The Board also conducts an annual evaluation of its own performance and working methods. The evaluation may be conducted as an internal self-evaluation or by using an external evaluator. In 2018, the evaluation was done as an internal self-evaluation without an external evaluator.
In order to discharge its duties, the Board requires sufficient information on the structure, business operations and markets of the Group. Each Board member is provided with a monthly report on the financial situation and markets of the Group. In addition, if necessary, the Board is informed of all material events in the Group. New Board members are properly introduced to the operations of the Company with induction presentations and materials as well as visits to selected manufacturing units.
The meetings of the Board are held at the Company’s headquarters in Espoo or in other Group locations or in other places as decided by the Board. The Board may also hold its meetings by video or telephone and make decisions without convening a meeting. According to the Charter of the Board of Directors, it shall hold at least six regular meetings each year. In 2018, the Board held fourteen (14) meetings, three of which were video or telephone meetings and six were held without convening. The average attendance of the members at the Board meetings was 98%.
The CEO, the Chief Financial Officer (CFO), the Senior Vice President (SVP), Human Resources, the SVP, Corporate Affairs & Legal, Group General Counsel as well as the SVP, Marketing and Communications are usually attending the Board meetings. When necessary, e.g. in connection with deliberation of strategy or budgets, the meetings are attended also by other GET members. The Auditor is participating annually in the meeting deliberating the financial statements. The Group General Counsel of the Company acts as the secretary of the Board.
Board members' attendance at the Board meetings in 2018
|Attendance (%)||Number of meetings attended|
|Pekka Ala-Pietilä (Chairman)||100||14/14|
|Jukka Suominen (Vice-Chairman)||100||14/14|
|William R. Barker||100||14/14|
|Ralf K. Wunderlich**||100||6/6|
In order to focus on certain responsibilities, the Board may appoint Committees consisting of three to five Board members each. The Board also appoints the Chairman of each Committee. Each Committee member shall have the qualifications required by the duties of the Committee.
The Board currently has three Committees: the Nomination Committee, the Human Resources Committee and the Audit Committee. The duties and responsibilities of the Committees are described in the charter for each Committee approved by the Board. The charters were last updated in 2016. The Committees assist the Board by preparing matters belonging to the competence of the Board. Each Committee regularly reports on its work to the Board. The Committees have no autonomous decision-making power and, thus, the Board passes its resolutions collectively. The entire Board remains responsible for the duties assigned to the Committees.
The duties and responsibilities of the Nomination Committee
- To prepare and make proposals to the AGM concerning the number of the Board members and the composition of the Board
- To prepare and make proposals to the AGM concerning the remuneration of the Board members and the principles for compensating the expenses of the Board members
- To conduct succession planning of the Board members
The Nomination Committee shall meet at least once a year, prior to the AGM. The following individuals have comprised the Nomination Committee from the date of the AGM in 2018: Pekka Ala-Pietilä (Chairman), Doug Baillie and Jukka Suominen. In 2018, the Nomination Committee held one meeting. The average attendance of the members at the Nomination Committee meetings was 100%.
Member's attendance at the Nomination Committee meetings in 2018
|Attendance (%)||Number of meetings attended|
|Pekka Ala-Pietilä (Chairman)||100||1/1|
* Nomination Committee member since April 25, 2018
** Nomination Committee member until April 25, 2018
The duties and responsibilities of the Human Resources Committee
- To prepare and discuss organizational and human resources matters
- To prepare, discuss and adopt the appointment of the CEO and other GET members
- To prepare, discuss and adopt the performance and remuneration of the CEO and other GET members
- To prepare, discuss and adopt talent management and succession planning of the CEO and other GET members and
- To discuss the development of the people strategy and human resources policies
The Human Resources Committee shall meet at least twice a year. The following individuals have comprised the Human Resources Committee from the date of the AGM in 2018: Pekka Ala-Pietilä (Chairman), Doug Baillie and William R. Barker. In addition, Ralf K. Wunderlich has been a Human Resources Committee member since July 1, 2018. In 2018, the Human Resources Committee held six meetings. The average attendance of the members at the Human Resources Committee meetings was 100%.
Member's attendance at the Human Resources Committee meetings in 2018
|Attendance (%)||Number of meetings attended|
|Pekka Ala-Pietilä (Chairman)||100||6/6|
|William R. Barker||100||6/6|
|Ralf K. Wunderlich*||100||2/2|
The duties and responsibilities of the Audit Committee
- To monitor and evaluate Company’s financial reporting process
- To monitor and evaluate effectiveness of the Company’s internal control, internal audit and risk management systems
- To monitor and evaluate the independence of the statutory auditor, and in particular the provision of non-audit services
- To monitor the statutory audit of the annual and consolidated financial statements
- To prepare and make proposal to the AGM for the election of the statutory auditor
- To review the financial statements, Directors’ Report, interim reports, Corporate Governance Statement, Remuneration Statement and Corporate Responsibility Report
The Audit Committee members shall have the expertise and experience required for the performance of the responsibilities of the Committee and at least one member shall have competence in accounting and/or auditing. The Audit Committee members shall not be involved in the day-to-day management of the Group. The majority of the members shall be independent of the Company and at least one member shall be independent of the Company’s significant shareholders. In addition to the Audit Committee members, the CFO of the Company and when considered necessary also other members of the Company’s management participate in the Committee’s meetings. The Auditor participates in the meeting deliberating the financial statements and also other meetings, if considered necessary.
The Audit Committee shall meet in accordance with the schedule determined by the Committee but at least four times a year. The following individuals have comprised the Audit Committee from the date of the AGM in 2018: Jukka Suominen (Chairman), Anja Korhonen, Kerttu Tuomas and Sandra Turner. In 2018, the Audit Committee held seven meetings. The average attendance of the members at the Audit Committee meetings was 96%.
Members' attendance at the Audit Committee meetings in 2018
|Attendance (%)||Number of meetings attended|
|Jukka Suominen (Chairman)||100||7/7|