The Board of Directors is responsible for the administration and the proper organisation of the operations of the Company. The duties and accountability of the Board are determined primarily under the Articles of Association and the Finnish Limited Liability Companies Act. The Board’s meetings procedure and duties are described in the charter adopted by the Board for each year.
Board members are elected annually by the AGM based on a proposal put forward by the Shareholders' Nomination Board. The Articles of Association contain no mention of any special order of Board member appointments. The Company has a Board of Directors comprising between five and eight members. In addition, a maximum of three deputy members may be elected to the Board of Directors. The Board of Directors elects a chairman and deputy chairman from among its members.
The Board’s term of office begins at the closing of the electing AGM and ends at the closing of the next AGM following the election.
The Board conducts an annual evaluation of the independence of its members in accordance with recommendation 10 of the Corporate Governance Code. A member of the Board is required to submit to the Company the information necessary to conduct the evaluation of independence. A Board member is also required to notify the Company of any changes in information relating to independence.
The Board conducts an annual evaluation of its performance and working methods to develop its ways of working. The evaluation includes assessments of the Board’s composition and processes, the quality of its work, the cooperation between the Board and operative management as well as the knowledge and participation of the members of the Board.
Besides the members and deputy members, the Group’s CEO, the CFO and EVP Administration as secretary to the Board regularly attend the Board meetings.
Charter of the Board
The work of the Board of Directors is based on the provisions of the Finnish Limited Liability Companies Act and the Company’s Articles of Association as well as on the charter adopted by the Board.
According to the charter, the following key matters are among those to be resolved by the Board of Directors at HKScan:
• appointments and dismissals of the CEO and senior executives, and decisions on the terms of employment of management
• terms of employment of managing directors of Group companies and senior management
• Group management’s and personnel’s incentive schemes and bonus criteria
• Group and organisation structure, commencement of new business, changes and discontinuation of central business
• Group strategy, business plan and performance targets for the following year, and related underlying assumptions
• Group’s significant investments, as well as company, business and real estate arrangements, and sales and outsourcing of significant equipment and machinery
• other significant contracts of the Group
• dividend policy and division proposal to the Annual General Meeting
• principles of risk management and communication related to Group’s business and follow up of the legality of business operations
• approving of investment plans and approval of relevant investments deviating from the plan
• taking out Group loans and giving securities
• giving procurations and other representative rights of the Company.
The meetings of the Board of Directors follow the annually agreed management calendar. Extra meetings may be convened if required. The chairman of the Board convenes the Board meetings and prepares the meeting agenda together with the CEO.
Board Committees
Four committees have been set up in HKScan to streamline the preparation and management of matters for the consideration of the Board. The Board selects the members and chairmen of the committees from among its members.
Audit Committee
The Board elects at least three members of the Audit Committee from among its members. At least one of the members must possess expertise in the fields of accounting, bookkeeping or auditing. The Audit Committee assists the Board by preparing matters within its remit for the consideration of the Board and by submitting proposals or recommendations for Board resolution.
The duties of the Audit Committee have been determined in its charter adopted by the Board. The tasks of the Audit Committee of HKScan’s Board of Directors include, among other things, the following:
• to monitor the reporting process of financial statements;
• to supervise the financial reporting process;
• to monitor the efficiency of the Company’s internal control, internal auditing and risk management system;
• to review the description of the main features of the internal control and risk management systems pertaining to the financial reporting process, which is included in the Company’s corporate governance statement;
• to monitor the statutory audit;
• to evaluate the independence of auditors and the provision of related services to the Company in particular; and
• to prepare the proposal for resolution on the election of the auditors.
The Audit Committee reports on its work to the Board at the Board meeting first following the meeting of the Committee and submits for the information of the Board the minutes of the committee’s meeting. The CEO of the Company or other persons in the management team of the Company may not be elected to the Audit Committee.
The Audit Committee's chair is Anne Koutonen, who is independent of the Company and its significant shareholders. Members are Terhi Tuomi, Reijo Kiskola and Niclas Diesen. Terhi Tuomi is independent of the Company, but not independent of its significant shareholders. Niclas Diesen and Reijo Kiskola are independent of the Company and its significant shareholders.
Committee meetings are also regularly attended by the Company’s CEO, the CFO, the internal auditor and by its external auditors.
Compensation Committee
The Board elects at least three members of the Compensation Committee from among its members. The majority of the members of the Compensation Committee must be independent of the Company. The CEO of the Company or other persons in the management team of the Company may not be elected to the Compensation Committee.
The duties of the Compensation Committee are defined in its charter adopted by the Board of Directors. The Compensation Committee is tasked with preparing matters pertaining to the Company’s compensation schemes. The Compensation Committee also prepares the Remuneration Policy and the Remuneration Report for governing bodies.
The Compensation Committee convenes at least twice a year and reports on its work to the Board following the meeting of the Committee and submits for the information of the Board the minutes of the Committee’s meetings.
The Compensation Committee is chaired by Ilkka Uusitalo and its other members are Reijo Kiskola, Jari Mäkilä and Lauri Sipponen. Reijo Kiskola and Lauri Sipponen are independent of the Company and its significant shareholders. Ilkka Uusitalo and Jari Mäkilä are not independent of the Company nor its significant shareholders.
The Compensation Committee has used external consultants in its work.
Working Committee
Within the Working Committee the Board considers matters without the presence of the operative management.
The duties of the Working Committee are defined in its charter adopted by the Board of Directors. The Working Committee is tasked with promoting the efficient accomplishment of the duties of the Company’s Board of Directors. The aim of the Committee is to advance compliance with the Finnish Corporate Governance Code in HKScan Corporation.
The Working Committee is chaired by Reijo Kiskola and its members comprise all the other Board members. Kiskola, Koutonen, Diesen, Sipponen are independent of the Company and its significant shareholders. Tuomi is independent of the Company, but not independent of its significant shareholders. Mäkilä and Uusitalo are not independent of the Company nor its significant shareholders. Yski is dependent of the company, but independent of its significant shareholders.
Special Committee
The Board elects in its annual convening meeting at least three members from among its members or deputy members to the Committee. The CEO of the Company attends the meetings and prepares the agenda and minutes.
The purpose of the Committee is to efficiently support the Board of the Company in potential M&A or divestment activities of HKScan. In addition, the Committee assists the Board and the management of the Company in other duties related to the Committee's work as specified by the Board.
The Committee is chaired by Reijo Kiskola and its members comprise all the other Board members. Kiskola, Koutonen, Diesen, Sipponen are independent of the Company and its significant shareholders. Tuomi is independent of the Company, but not independent of its significant shareholders. Mäkilä and Uusitalo are not independent of the Company nor its significant shareholders. Yski is dependent of the company, but independent of its significant shareholders.
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> Introductions of the Board members