Shareholders' Nomination Board

The Annual General Meeting on 9 April 2013 established a permanent Shareholders’ Nomination Board. The purpose and task of the Shareholders’ Nomination Board is to prepare and present to the Annual General Meeting, and, if necessary, to an Extraordinary General Meeting, a proposal on the remuneration, size and members of the Board of Directors. In addition, the Shareholders’ Nomination Board seeks candidates for potential board members.

The Shareholders’ Nomination Board consists of four members, three of which are appointed by the company’s three largest shareholders, who shall appoint one member each. The Chairman of the Board of Directors serves as the fourth member. The members are nominated annually and their term of office ends when new members are nominated to replace them. Fortum’s three largest shareholders that are entitled to appoint members to the Shareholders’ Nomination Board are determined on the basis of the registered holdings as of the first working say in September in the year concerned. In the event that a shareholder does not wish to exercise their right to appoint a representative, it shall pass the right to the next-largest shareholder who would not otherwise be entitled to appoint a member to the Nomination Board. The Shareholders’ Nomination Board forwards its proposals for the Annual General Meeting to the Board of Directors by 31 January each year.

Diversity Principles for the Board of Directors

In line with the new Corporate Governance Code 2015, the Shareholders’ Nomination Board has in the fall 2016 adopted diversity principles for the Board of Directors which are applied in preparing proposal concerning nomination of board members. The diversity principles include, among others, that the board composition shall include expertise from the geographical areas where Fortum conducts its business, the background profession of the board members shall include such competences that support realization of Fortum’s strategy and that enable board members to challenge management decisions and to exercise their role of having oversight. In addition, the board composition shall include both genders. Fortum’s target is to comply with the principles issued in the Government Resolution dated 17 February 2015 on equal gender representation in the boards of listed companies with the aim of the board consisting of at least 40% each of women and men by 2020. The Shareholders Nomination Board reviews the diversity principles and their implementation annually.

Fortum reports the objectives, actions and progress of the diversity principles in its corporate governance statement. The Shareholders’ Nomination Board has applied the diversity principles in preparing the proposal concerning nomination of board members for the Annual General Meeting 2017. The Shareholders’ Nomination Board deems that the current board composition and the proposed board members for the Annual General Meeting 2017 include all the competences defined in the diversity principles in well balanced manner.

The proposal for the board members for the Annual General Meeting 2017 consists of 3 women and 5 men. The current Board of Directors consists of 3 women and 5 men, corresponding to a ratio of 37.5% and 62.5%.

Shareholders’ Nomination Board prior  to the Annual General Meeting 2017

In September 2016, the following members were invited to the Shareholders’ Nomination Board: the Government Ownership Steering Department of the Prime Minister’s Office, Ilmarinen Mutual Pension Insurance Company and the Social Insurance Institution of Finland (KELA). The following persons were appointed to the Shareholders’ Nomination Board: Eero Heliövaara, b. 1956, M.Sc. (Econ.) and M.Sc. (Eng.), Director General of the Government Ownership Steering Department, Prime Minister’s Office; Timo Ritakallio, b. 1962, D.Sc. (Tech.), LL.M., MBA, President and CEO, Ilmarinen Mutual Pension Insurance Company and Liisa Hyssälä, b. 1948, M.Sc. (Soc.)., D.D.S., Director General, Social Insurance Institution of Finland (KELA). The Chairman of the Board of Directors, Sari Baldauf, acts as a member of the Shareholders’ Nomination Board. The Nomination Board convened 3 times and the attendance rate was 100%. 

Following the retirement of Liisa Hyssälä, Director General of KELA, her successor Elli Aaltonen (b. 1953, D.Sc. (Soc.), docent, Director General) replaced her as a member of the Shareholders’ Nomination Board as of 1 January 2017. Ms Hyssälä participated in two meetings and Ms Aaltonen in one meeting.

The Shareholders’ Nomination Board will propose to the Annual General Meeting 2017, which will be held on 4 April 2017, that the fees to be paid to the members of the Board of Directors are for a term ending at the end of the Annual General Meeting 2018 as follows: for the chairman, EUR 75,000 per year; for the deputy chairman, EUR 57,000 per year; and for each member, EUR 40,000 per year, as well as for the chairman of the Audit and Risk Committee EUR 57,000 per year if he/she is not at the same time acting as chairman or deputy chairman of the Board of Directors. In addition, for each Board of Directors and Board Committee meeting a fee of EUR 600 is proposed. For Board of Directors members living outside Finland in Europe, the proposed fee for each meeting will be doubled, and for Board of Directors members living outside Europe, the proposed fee for each meeting will be tripled. For Board of Directors members living in Finland, the proposed fee for each Board of Directors and Board Committee meeting will be doubled for meetings held outside Finland and tripled for meetings held outside Europe. For Board of Directors and Committee meetings held as a telephone conference, the proposed fee will be paid as single to all members. No fee will be paid for decisions made without a separate meeting.

In addition, the Shareholders’ Nomination Board has decided to propose to the Annual General Meeting 2017 that the Board of Directors comprise eight members and that the following persons be elected to the Board of Directors for the upcoming term: Sari Baldauf (Chairman), Heinz-Werner Binzel, Eva Hamilton, Kim Ignatius, Tapio Kuula, and Veli-Matti Reinikkala, as well as new members Matti Lievonen (Deputy chairman), and Anja McAlister.

The Annual General Meeting on 4 April 2017 decided the fees, the number of the members as well as the members of the Board of Directors in accordance with the above proposal by the Shareholders' Nomination Board.

Shareholders’ Nomination Board prior to the Annual General Meeting 2016

In September 2015, the following persons were appointed to the Shareholders’ Nomination Board: Eero Heliövaara, Director General of the Government Ownership Steering Department, Prime Minister’s Office; Reima Rytsölä, Executive Vice President, Investments, Varma Mutual Pension Insurance Company and Liisa Hyssälä, Director General, Social Insurance Institution of Finland (KELA). In addition, the Chairman of the Board of Directors, Sari Baldauf, was a member of the Shareholders’ Nomination Board. Of the three largest shareholders, The State Pension Fund informed Fortum that they would not use their right to nominate. The Shareholders’ Nomination Board convened 5 times and the attendance rate was 100%. The Shareholders’ Nomination Board presented its proposal covering the members of the Board of Directors and the remuneration be paid to them, on 22 January 2016.

4/5/2017