Board Committees

The committees of the Board of Directors are the Audit and Risk Committee, the Nomination and Remuneration Committee and the Technology and Investment Committee. The committees assist and make recommendations to the Board of Directors in the fulfilment of certain Board duties and prepare matters to be considered by the Board of Directors.

The Board of Directors elects the members of the Audit and Risk Committee, the Nomination and Remuneration Committee and the Technology and Investment Committee from amongst its members. Each committee shall have at least three members and a Chair. The members and the Chair shall have the expertise and experience required by the duties of the Committee, as required by the Companies Act and the Corporate Governance Code to fulfil the duties of the respective committee. The committees are authorised to obtain independent external professional advice in fulfilling their responsibilities.

The members are elected 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 Chairs of the committees report 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 Board members. The Board of Directors has approved written charters for its committees. The charters are reviewed regularly and updated as needed. The Board may also decide to establish other temporary or permanent committees, if needed. The recommended minimum number of members of a committee is three. In April 2023, the Board of Directors established a temporary Russia Committee to deal with Fortum’s Russian related topics.

Audit and Risk Committee
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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 in the Corporate Governance Code. 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 auditor, reviews the external auditor’s audit plan and meets with the auditor regularly to discuss the audit plan, audit reports and findings.

Pursuant to the 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 auditor, Chief Financial Officer, Vice President Internal Audit, Vice President Group Accounting, and Director Legal, Corporate, 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 including the non-financial information or other information subject to audit assurance;
  • Monitoring the statutory audit of the financial statements and consolidated financial statements;
  • Preparing the 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 annual Corporate Governance Statement;
  • Reviewing annually the group risk policy;
  • 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 the 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 2023

After the Annual General Meeting 2023, the Board of Directors elected from amongst its members Essimari Kairisto as Chair and Jonas Gustavsson, Maija Strandberg and Vesa-Pekka Takala as members of the Audit and Risk Committee. Until the Annual General Meeting 2023, the committee comprised Essimari Kairisto (Chair), Teppo Paavola, Philipp Rösler, Annette Stube and Ralf Christian. The members are all independent of the company and of its significant shareholders with the exception of Maija Strandberg, who is non-independent of the company’s significant shareholder (the State of Finland). 

The Audit and Risk Committee convened 10 times in 2023 and the attendance rate of the meetings was 98%.

Nomination and Remuneration Committee
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The Nomination and Remuneration Committee assists the Board of Directors in matters related to nomination and remuneration of the company’s management. 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, Executive Vice President, People and Procurement, and Deputy 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 and the Fortum Leadership Team;
  • 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 Leadership Team;
  • Evaluating the performance and the remuneration of the President and CEO and the members of the Fortum Leadership Team;
  • Preparing the Board recommendations on the group’s and its management’s remuneration policy, and variable pay plans;
  • Monitoring the functioning of the variable pay plans 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 2023

After the Annual General Meeting 2023, the Board of Directors elected from amongst its members Mikael Silvennoinen as Chair, and Luisa Delgado, Teppo Paavola and Maija Strandberg as members of the Nomination and Remuneration Committee. The committee members are all independent of the company and of its significant shareholders, with the exception of Maija Strandberg, who is non-independent of the company’s significant shareholder (the State of Finland). Until the Annual General Meeting 2023, the committee comprised Veli-Matti Reinikkala (Chair), Luisa Delgado, Anja McAlister and Kimmo Viertola. 

The committee convened 8 times in 2023, and the attendance rate of the meetings was 100%.

Technology and Investment Committee
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At its meeting held after the Annual General Meeting 2023, the Board of Directors resolved to establish a new board committee for technology and investment-related matters. The Technology and Investment Committee is a board committee established in accordance with the Finnish Corporate Governance Code.

Executive Vice President, Corporate Customers and Markets, 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 Technology and Investment Committee include:

  • To assess and make recommendations to the Board on the management’s proposals pertaining to:
    • Customer and partnering solutions;
    • Clean energy, electricity and gas production technologies;
    • Fortum’s sustainability targets and performance;
    • Investment proposals, including financial models;
  • Preparation and follow-up of strategy implementation from the technology and investment point of view.

Technology and Investment Committee in 2023

After the Annual General Meeting 2023, the Board of Directors elected from amongst its members Ralf Christian as Chair and Marita Niemelä, Johan Söderström, Vesa-Pekka Takala and Mikael Silvennoinen as members of the new Technology and Investment Committee. The committee members are all independent of the company and of its significant shareholders.

The committee convened 4 times in 2023, and the attendance rate of the meetings was 80%.

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