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.

Audit and Risk Committee

The Audit and Risk Committee assists the Board of Directors in matters relating to financial reporting and control in accordance with the duties set forth the Corporate Governance Code 2020. The Board of Directors regularly determines the role and duties of the Audit and Risk Committee in a written charter. In accordance with the committee charter, the committee monitors Fortum’s financial statements reporting process, the efficiency of the internal controls, and risk management systems and also monitors and assesses legal compliance and business ethics compliance. The committee approves the internal audit charter and the internal audit plan and its budget. The committee evaluates the independence of the external auditors, reviews the external auditor’s audit plan and meets with them regularly to discuss the audit plan, audit reports and findings.

Pursuant to the Corporate Governance Code 2020, 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, Head of Accounting&Reporting, 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 main duties of the Audit and Risk Committee include:

  • Monitoring the financial position of the company
  • Monitoring and assessing the financing and reporting system
  • 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
  • Monitoring and evaluating the independence of the statutory auditor and, in particular, the offering of services other than auditing services by the auditor
  • Monitoring and assessing 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, material risks, including climate related risks, and uncertainties
  • Monitoring material risks and uncertainties, including but not limited to climate, financial, funding, IT-security related risks as well as tax risks and principles
  • Approving the internal audit charter, the annual audit plan, the budget of the internal audit function and reviewing the internal audit reports
  • Monitoring and assessing legal compliance and business ethics compliance
  • Establishment of principles concerning the monitoring and assessment of related party transactions
  • Monitoring and assessing how agreements and other legal acts between the company and its related parties meet the requirements of the ordinary course of business and arm’s-length terms

Audit and Risk Committee in 2022

After the Annual General Meeting 2022, the Board of Directors elected from amongst its members Essimari Kairisto as Chair and Teppo Paavola, Philipp Rösler, Annette Stube, and Ralf Christian as members.

Audit and Risk Committee in 2021

After the Annual General Meeting 2021, the Board of Directors elected from amongst its members Essimari Kairisto as the Chair and Teppo Paavola, Philipp Rösler and Annette Stube as members of the Audit and Risk Committee. Until the Annual General Meeting, the committee comprised Essimari Kairisto (Chair), Teppo Paavola, Veli-Matti Reinikkala, Philipp Rösler, and Annette Stube. The members are all independent of the company and of its significant shareholders. The Audit and Risk Committee convened 8 times in 2021 and the attendance rate was 100%.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee assists the Board of Directors in matters related to nomination and remuneration of the company’s management. The committee has a written charter for its work, the main content, including the duties, are described herein. Pursuant to the Finnish Corporate Governance Code 2020, the majority of the members of a remuneration committee shall be independent of the company. The regular participants at the committee meetings are the President and CEO, Senior Vice President, People and Procurement, and General Counsel as secretary to the committee.

The 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
  • Preparing the remuneration policy and remuneration report for the company’s governing bodies
  • Reviewing and preparing succession plans for the President and CEO and for the members of the Fortum Executive Management
  • 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, bonus, and incentive systems and remuneration policy
  • 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 and ensuring planning and implementation of the talent management processes to ensure and promote competence development to support strategy implementation

Nomination and Remuneration Committee in 2022

At its meeting held after the Annual General Meeting 2022, Fortum’s Board of Directors elected from among its members Veli-Matti Reinikkala as Chair and Luisa Delgado, Anja McAlister, and Kimmo Viertola as members to the Nomination and Remuneration Committee.

Nomination and Remuneration Committee in 2021

After the Annual General Meeting 2021, the Board of Directors elected from among its members Veli-Matti Reinikkala as the Chair, and Luisa Delgado and Anja McAlister as members of the Nomination and Remuneration Committee. Until the Annual General Meeting, the committee comprised Matti Lievonen (Chair), Eva Hamilton, and Anja McAlister. In addition, Klaus-Dieter Maubach was a member of the Nomination and Remuneration Committee until his resignation on 29 March 2021. The committee members are all independent of the company and of its significant shareholders. The committee convened 6 times during 2021, and the attendance rate was 95%.