The Board Committees

The committees of the Board of Directors are the Audit and Risk Committee and the Nomination and Remuneration Committee. The committees assist the Board of Directors by preparing and reviewing in more detail matters falling within the duties of the Board of Directors.

The Board of Directors appoints members of the Audit and Risk Committee and the Nomination and Remuneration Committee from amongst its members. Each committee shall have at least three members. The members shall have the expertise and experience required by the duties of the respective committee.

Members are appointed for a one-year term of office expiring at the end of the first Annual General Meeting following the election. All the members of the Board of Directors have the right to attend the committee meetings. The Chairman of the committee reports on the committee’s work to the Board of Directors regularly after each meeting, and the committee meeting materials and minutes are available to all members of the Board of Directors. The Board of Directors has approved written charters for the committees; the charters are reviewed regularly and updated as needed..

The Audit and Risk Committee

 

The Audit and Risk Committee assists the Board of Directors in matters relating to financial reporting, risks and control, in accordance with the tasks specified for audit committees in the Finnish Corporate Governance Code. The Audit and Risk Committee oversees the financial reporting process and monitors the efficiency of the internal controls and risk management systems within the Group. In addition, the committee regularly reviews the business ethics compliance reporting. The committee has a written charter in which its duties have been defined.

Pursuant to the Finnish Corporate Governance Code, the members of the Audit and Risk Committee shall have the qualifications necessary to perform the responsibilities of the committee, and at least one of the members shall have expertise specifically in accounting, bookkeeping or auditing. The members shall be independent of the company, and at least one member shall be independent of the company’s significant shareholders.

The external auditors, Chief Financial Officer, Head of Internal Audit, Corporate Controller, and General Counsel, as secretary to the committee, attend the committee meetings on a regular basis. Other senior executives attend the meetings as invited by the committee.

The Audit and Risk Committee approves the internal audit charter and the internal audit plan, and carries out a self-assessment of its work. The committee also reviews the external auditor’s audit plan and meets with them regularly to discuss the audit plan, audit reports and findings. In addition, the committee evaluates the independence of the external auditors and monitors their performance.

Audit and Risk Committee in 2016
After the Annual General Meeting on 5 April 2016, the Board of Directors elected from amongst its members Kim Ignatius as the Chairman and Minoo Akhtarzand, Heinz-Werner Binzel and Jyrki Talvitie as members of the Audit and Risk Committee. Until the Annual General Meeting on 5 April 2016, the committee comprised Kim Ignatius as the Chairman and Minoo Akhtarzand, Heinz-Werner Binzel and Jyrki Talvitie as members.

Audit and Risk Committee in 2015

After the Annual General Meeting on 31 March 2015, the Board of Directors elected from amongst its members Kim Ignatius as the Chairman and Minoo Akhtarzand, Heinz-Werner Binzel and Jyrki Talvitie as members of the Audit and Risk Committee. Until the Annual General Meeting on 31 March 2015, the committee comprised Kim Ignatius as the Chairman, and Heinz-Werner Binzel and Jyrki Talvitie as members.

In 2015, the members were all independent of the company and of its significant shareholders. The Audit and Risk Committee met 5 times in 2015 and the attendance rate was 100%.

Main duties of the Audit and Risk Committee include: 

  • Monitoring the financial position of the company
  • Supervising the financial reporting process
  • Monitoring the reporting process of financial statements
  • Monitoring the statutory audit of the financial statements and consolidated financial statements
  • Preparing for the Board of Directors the proposal for resolution on the election of the auditor
  • Evaluating the independence of the statutory auditor or audit firm, particularly the provision of related services to the company to be audited
  • Monitoring the efficiency of the company’s internal control, internal audit, compliance and risk management systems
  • Reviewing the description of the main features of the internal control and risk management systems in relation to the financial reporting process, which is included in the company’s Corporate Governance Statement
  • Reviewing annually the Group risk policy and risk exposures
  • Reviewing plans and reports and approving operation instructions of the internal audit function
  • Monitoring and assessing legal compliance and business ethics compliance
 

The Nomination and Remuneration Committee

The Nomination and Remuneration Committee assists the Board of Directors in issues related to nomination and remuneration of the company’s management. The committee has a written charter in which its duties have been defined. Pursuant to the Finnish Corporate Governance Code, the majority of the members of a remuneration committee shall be independent of the company. The President and CEO or other executives of the company may not be appointed as members of the committee.
 
The regular participants at the committee meetings are the President and CEO, Senior Vice President, Corporate Human Resources, and General Counsel, as Secretary to the Committee.
 
The Nomination and Remuneration Committee conducts annually a self-evaluation of its work.


The Nomination and Remuneration Committee in 2016

After the Annual General Meeting on 5 April 2016, the Board of Directors elected from amongst its members Sari Baldauf as the Chairman and Eva Hamilton, Tapio Kuula and Veli-Matti Reinikkala as members of the Nomination and Remuneration Committee. Until the Annual General Meeting on 5 April 2016, the committee comprised Sari Baldauf as the Chairman and Eva Hamilton, Tapio Kuula and Petteri Taalas as members.

The Nomination and Remuneration Committee in 2015

After the Annual General Meeting on 31 March 2015, the Board of Directors elected from amongst its members Sari Baldauf as the Chairman and Eva Hamilton, Tapio Kuula and Petteri Taalas as members of the Nomination and Remuneration Committee. Until the Annual General Meeting on 31 March 2015, the committee comprised Sari Baldauf as the Chairman and Minoo Akhtarzand, Ilona Ervasti-Vaintola, Christian Ramm-Schmidt and Petteri Taalas as members.

In 2015, the members were all independent of the company, with the exception of Tapio Kuula (Mr. Kuula acted as President and CEO of Fortum until 31 January 2015), and of its significant shareholders. The committee met 4 times during 2015 and the attendance rate was 100%. 

Main duties of the Nomination and Remuneration Committee include:

  • Preparing nomination and remuneration issues and proposals to the Board of Directors concerning the President and CEO, the executives reporting directly to the President and CEO as well as the Fortum Executive Management
  • eviewing and preparing succession plans for the President and CEO
  • Evaluating the performance and the remuneration of the President and CEO, the executives reporting directly to the President and CEO as well as the Fortum Executive Management
  • Preparing for the Board of Directors recommendations on the Group’s and its management’s pay structures and bonuses and incentive systems
  • Monitoring the functioning of the bonus systems to ensure that the management’s bonus systems will advance the achievement of the company’s strategic objectives and that they are based on performance
  • Monitoring, planning and promoting competence development in the Group based on strategic target setting

4/5/2016