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 Chair 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 day 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

The Shareholders’ Nomination Board prepares and applies diversity principles for the Board of Directors in line with the Finnish Corporate Governance Code 2020. The principles are applied in preparing the 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 the implementation of Fortum’s strategy and that enable board members to challenge management decisions and to exercise an overseeing role. In addition, the board composition shall include both genders. Fortum also complies with the principles set forth in the Finnish Government Resolution dated 17 December 2015 on equal gender representation in the boards of listed companies with the aim having been that the board would consist of at least 40% of women and men respectively by 2020. The Shareholders’ Nomination Board reviews the diversity principles and their implementation annually.

Fortum reports on the objectives, actions and progress of the diversity principles in this Corporate Governance Statement. The Shareholders’ Nomination Board has applied the diversity principles in preparing the proposal concerning nomination of the board members for the Annual General Meeting 2021 and for the upcoming Annual General Meeting 2022. The goal of the Nomination Board is to seek possible new Board member candidates meeting the requirements set by the international nature of the company’s business emphasising experience from CEO level management position in international business and strong expertise in ESG, energy industry, and digitalisation in particular. The Shareholders’ Nomination Board deems that the current board composition and the proposed board members for the 2 Annual General Meeting 2022 include all the competences defined in the diversity principles in a well-balanced manner.

The proposal for the board members for the Annual General Meeting 2022 consists of 4 women and 5 men. The current Board of Directors consists of 4 women and 3 men, corresponding to a ratio of 57.1% and 42.9% respectively.

Shareholders' Nomination Board 2022

The following members have been appointed to Fortum Shareholders' Nomination Board: Ms. Maija Strandberg, Senior Ministerial Adviser, Financial Affairs, Prime Minister’s Office, Ownership Steering Department (Chair), Mr. Risto Murto, President and CEO, Varma Mutual Pension Insurance Company, Mr. Jouko Pölönen, President and CEO, Ilmarinen Mutual Pension Insurance Company, and Mr. Veli-Matti Reinikkala, Chair of Fortum's Board of Directors.

Elo Mututal Pension Insurance Company did not exercise its right to appoint a representative, and therefore the right was transferred to Ilmarinen Mutual Pension Insurance Company. The Nomination Board will forward its proposals for the 2023 Annual General Meeting to the Board of Directors by 31 January 2023.

Shareholders’ Nomination Board in 2021

In September 2020, the following persons were appointed to the Shareholders’ Nomination Board: Kimmo Viertola, b. 1961, M.Sc. (Econ.), Director General of the Ownership Steering Department, Prime Minister’s Office; Jouko Pölönen, b. 1970, M.Sc. (Econ.), President and CEO of Ilmarinen Mutual Pension Insurance Company, and Risto Murto, b. 1963, Ph.D. (Econ.), President and CEO of Varma Mutual Pension Insurance Company. The Chair of the Board of Directors, Matti Lievonen, acted as member of the Shareholders’ Nomination Board. In 2021, the Nomination Board convened 10 times and the attendance rate was 100%.

In September 2021, the following persons were appointed to the Shareholders’ Nomination Board: Kimmo Viertola, b. 1961, M.Sc. (Econ.), Director General of the Ownership Steering Department, Prime Minister’s Office; Jouko Pölönen, b. 1970, M.Sc. (Econ.), President and CEO of Ilmarinen Mutual Pension Insurance Company, and Risto Murto, b. 1963, Ph.D. (Econ.), President and CEO of Varma Mutual Pension Insurance Company. The Chair of the Board of Directors, Veli-Matti Reinikkala, acts as member of the Shareholders’ Nomination Board. As of 25 January 2022, the Chair of the Shareholders’ Nomination Board has been Maija Strandberg, Senior Ministerial Adviser, Financial Affairs, Prime Minister’s Office, Ownership Steering Department. In 2022, the Nomination Board has so far convened 2 times and the attendance rate has been 100%.

The Shareholders’ Nomination Board proposals to the Annual General Meeting 2022

The annual fee to be paid to the members of the Board of Directors for a term ending at the end of the Annual General Meeting 2023: Chair: EUR 88,800, Deputy Chair: EUR 63,300, Members: EUR 43,100 Chair of the Audit and Risk Committee: EUR 63,300, in case that he/she does not simultaneously act as Chair or Deputy Chair of the Board.

As a new element a fixed fee for the Committee work: Member of the Audit and Risk Committee: EUR 3,000, Chair of the Nomination and Remuneration Committee: EUR 5,000 Member of the Nomination and Remuneration Committee: EUR 2,000 Chair of any additional Committee established by a Board decision: EUR 5,000, Member of any additional Committee established by a Board decision: EUR 2,000.

The meeting fee payable to a Board member, also for the Committee meetings, EUR 800 for each meeting, or EUR 1,600 in case the member travels to the meeting outside his/her country of residence. When a member participates in the meeting via remote connection, or for the decisions that are confirmed without convening a meeting, the meeting fee be EUR 800. The travel expenses of Board members are compensated in accordance with the company’s travel policy.

As a new element, the annual fee for the Board work of the Board members be paid in company shares and in cash in such a way that approximately 40% of the amount of the annual fee be payable in shares acquired on behalf and in the name of the Board members, and the remainder in cash. The meeting fees and the fixed fees for the Committee work to be paid fully in cash.

The Board of Directors comprises of nine members and the following persons be elected to the Board of Directors for the upcoming term: Ralf Christian, Luisa Delgado, Essimari Kairisto, Anja McAlister (Deputy Chair), Teppo Paavola, Veli-Matti Reinikkala (Chair), Philipp Rösler, Annette Stube, and Kimmo Viertola.

The Annual General Meeting 28 March 2022 approved all the Nomination Board proposals above.

Reports and presentations

Materials of Fortum's General Meetings