Working order and self-assessment

The Chairman of the Board of Directors prepares the agenda for the Board of Directors meeting based on the proposal by the President and CEO. The members of the Board of Directors have the right to suggest specific matters and have them included on the agenda. More than half of the members must be present at the meeting to constitute a quorum. Decisions of the Board of Directors shall be made by a simple majority. The Board of Directors has approved a written charter for its work, the main content of which is disclosed herein, including the duties of the Board of Directors.

Main duties of the Board of Directors

Strategy

  • Strategic development and steering of the company’s business and fields of activity
  • Corporate values, policies
  • Confirming the Group’s Code of Conduct, operating principles and Group policies, including sustainability, and overseeing their implementation

Supervision and oversight

  • Ensuring that the administration and operations of the company are properly organised
  • Ensuring that the accounting, financial administration and the risk management are arranged appropriately

Financial matters of significance

  • Confirming the Group’s business plan on an annual basis
  • Setting and following up the annual performance targets, including sustainability and climate-related targets, for the company and its management
  • Reviewing the interim reports and approving the consolidated financial statements, the parent company financial statements and the operating and financial review
  • Defining the dividend policy
  • Deciding on major investments, divestments and business arrangements

Decisions having effect on the corporate organisation

  • Confirming the Group’s organisational structure at the top management level, and appointing and dismissing the members of the Fortum Executive Management
  • Appointing and dismissing the President and CEO; deciding on his/her remuneration
  • Appointing the Chair and Deputy Chair as well as members of the Fortum Corporation Advisory Council

Other

  • Convening the Annual General Meeting and the Extraordinary General Meeting, when necessary
  • Deciding on donations to charities

During 2020, the main focus for the Board of Directors was on the Uniper investment, its consolidation and consequently, updating of the group strategy including setting financial and climate targets for the whole Fortum Group and on Uniper cooperation. In addition, the Board of Directors focused on the recruitment of a new President and CEO as well as well as on strategic reviews, investments, divestments and acquisitions. The Board of Directors decided to establish a temporary committee for the purpose of CEO recruitment following the announcement regarding Pekka Lundmark’s leaving of the company, and ran a full international search process for the replacement. The members of the temporary search committee were Matti Lievonen, Klaus-Dieter Maubach, Veli-Matti Reinikkala, and Sirpa-Helena Sormunen as secretary. The committee met 7 times and the attendance rate was 100%. Due to the market challenges following the Covid-19 pandemic, the Board was closely monitoring the development of the Group and evaluating various risk short and long term scenarios during the year. The Board of Directors conducted the annual self-assessment during the year to further enhance the efficiency of the board work.

Self-assessment

As part of its duties, the Board of Directors conducts an annual self-assessment in order to further develop its work. In accordance with the Finnish Corporate Governance Code, the Board of Directors also annually evaluates which of the directors are independent of the company and which are independent of its significant shareholders.

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