Board of Directors
The Board is responsible for corporate governance and the appropriate conduct of ordinary activities pursuant to the Limited Liability Companies Act and other regulations. The board holds the general authority in company-related issues, unless other company bodies have the authority under the applicable legislation or articles of association. The policies and key tasks of the Board are defined in the Limited Liability Companies Act, the Articles of Association, and the Board’s rules of procedure. The key tasks include:
- Consolidated financial statements, half year report, interim reports
- Proposals to the Annual General Meeting
- Appointing and dismissing the President and CEO
- Organization of financial control.
In addition, the Board deals with, and decides on, matters of principle, as well as issues that carry financial and business significance, such as:
- Group and business unit strategies
- The Group’s action, budget, and investment plans
- The Group’s risk management and reporting procedures
- Decisions concerning the structure and organization of the Group
- Significant individual investments, acquisitions, divestments, and reorganizations
- The Group’s insurance and financing policies
- Reward and incentive schemes for the Group’s management
- Appointing Board committees
- Monitoring and evaluating the actions of the President and CEO.
The Company has a separate Audit Committee and a Personnel and Remuneration Committee.
The President and CEO of Nokian Tyres is in charge of ensuring that the Board members have necessary and sufficient information on the Company’s operations.
The Board assesses its activities and operating methods by carrying out a self-evaluation once a year. Members of the Board will not participate in making a decision where the law states they must be disqualified due to a conflict of interest.
Composition of the Board
According to the Articles of Association of Nokian Tyres, the Board of Directors comprises no fewer than three and no more than eight members. The number of Board members and the composition of the Board shall be such that the Board is capable of efficiently carrying out its tasks, while taking account of the requirements set by the Company’s operations and its stage of development. The elected Board members must be qualified for the task and able to allocate enough time for the Board duties. The Board shall include no fewer than two representatives from both genders. The proposal regarding the composition of the Board for the Annual General Meeting is prepared by the Personnel and Remuneration Committee. The Board shall have no fewer than two representatives from both genders. This goal has been met in the current Board. The principles concerning the selection of the Board and its diversity are shown here.
Members of the Board are elected at the Annual General Meeting for a one-year term of office that begins after the closing of the Annual General Meeting and ends at the end of the next Annual General Meeting. The Board of Directors appoints a Chairman from among its members. The remuneration payable to the Board members is also confirmed at the Annual General Meeting. The Board will decide on the committees and their chairpersons and members each year during the constituent meeting. In 2016, the Personnel and Remuneration Committee and the Audit Committee were operational.
The Board meetings usually take place in Helsinki. The Board also visits the main units of the Group and holds its meetings at these locations. When necessary, telephone conferences can also be arranged. The Vice President responsible for finance and control and other Group Management Team members as well as the internal auditor participate in the Board meetings, when necessary. The auditor participates in the annual meeting dealing with financial statements and auditing plan. The Group General Counsel is the secretary of the Board.
Independence of the Board members
The Board members are independent of the company. All Board members are independent of all major shareholders of the company.
Committees of the Board
The Board appoints its committees annually at its first constituent meeting following the Annual General Meeting. The Board chooses the members and chairman for the committees from among its members. Each committee must include no fewer than three members having the competence and expertise necessary for working in the committee. The members of the Audit Committee must be independent of the company, and at least one member must be independent of all major shareholders. The majority of the members of the Personnel and Remuneration Committee must be independent of the company. The President and CEO and the other members of the company management cannot act as members of the Personnel and Remuneration Committee.
Personnel and Remuneration Committee
The committee prepares the Board’s proposal to the Annual General Meeting on the members to be appointed to the Board of Directors and the remuneration to be paid to the Board members. In addition, the committee prepares a proposal to the Board on the company’s President and CEO and on the salary and other incentives paid to the President and CEO. The Personnel and Remuneration Committee also submits a proposal to the Board on the allocation and criteria of employee stock options, share rewards and other incentives. The committee has no independent decision-making power; collective decisions are made by the Board, which is responsible for carrying out the tasks assigned to the committee.
In 2016, the members of the Personnel and Remuneration committee were Petteri Walldén (Chairman until April 12, 2016), Hille Korhonen, Tapio Kuula (Chairman from April 12, 2016), and Hannu Penttilä (until April 12, 2016).
The committee assembled 6 times.
All committee members are independent of the company and of all major shareholder
The Audit Committee assists the Board of Directors in its regulatory duties and reports to the Board. The committee has no independent decision-making power; collective decisions are made by the Board, which is responsible for carrying out the tasks assigned to the committee.
According to the rules of procedure specified by the Board, the committee controls that bookkeeping, financial administration, financing, internal auditing, audit of the accounts, compliance and risk management are appropriately arranged in the Company. The committee follows the reporting process for financial statements as well as any significant changes in the recording principles and the items valued in the balance sheet. The committee also processes the general description of the mechanisms of internal auditing and risk management of the financial reporting process, which forms part of the Corporate Governance Statement. The committee follows the statutory auditing of the financial statement and the consolidated financial statements and assesses the independence of the statutory auditor. The committee prepares the draft resolution on selecting the auditor.
In 2016, the members of the Audit Committee were Raimo Lind (Chairman), Inka Mero, Heikki Allonen (from April 12, 2016), and Tapio Kuula (until April 12, 2016). The Company’s chief auditor participates in the committee’s meetings.
The committee assembled 5 times in 2016. All committee members are independent of the company and of all major shareholders of the company.
The attendance of Board members at committee meetings in 2016:
|Personnel and Remuneration Committee||Audit Committee|