Election of the members of the Board of Directors
According to Article 4 of PKC´s Articles of Association, a Board of Directors comprising at least five (5) and no more than seven (7) members shall attend to the company´s administration and the due organisation of operations. The term of office of Board members ends at the conclusion of the next Annual General Meeting following their election.
According to Article 10 of the Articles of Association, the Annual General Meeting shall decide on the remuneration of Board members, the principles for reimbursing travel expenses and the number of Board members, and it shall elect the Board members.
Chairman and vice chairman of the Board of Directors
At its organisation meeting held after the Annual General Meeting, the Board of Directors elects a chairman and vice chairman from amongst its members for a term lasting until the conclusion of the next Annual General Meeting. The company´s president or vice president cannot serve as the chairman or vice chairman of the Board of Directors.
The tasks of the chairman of the Board of Directors include ensuring that the Board of Directors convenes when necessary, chairing discussions at Board meetings, seeing to it that minutes are kept and signing the minutes. The duties of the vice chairman of the Board of Directors include assisting the chairman of the Board of Directors in his/her tasks and, when the chairman cannot be present, attending to his/her tasks.
Competence and independence of Board members
PKC elects to its Board of Directors persons who have the required competence for the task and the possibility to devote a sufficient amount of time to the work. Both genders shall, to the extent possible, be represented on the board from the first annual general meeting held after 1 January 2009. The intention is that both expertise and the viewpoint of shareholders are represented on the Board of Directors. Neither persons who are unable to manage themselves and assets nor persons who are either employed by one of the company´s competitors or are members of a competitor´s Board of Directors shall be elected to the Board; in addition, no member of the company´s Board of Directors shall agree to perform such tasks or commissions for a competitor.
The majority of the Board members must be independent of the company and at least two of said majority must be independent of the company´s significant shareholders. Board members must provide the Board of Directors with sufficient information for evaluating their competence and independence and report any changes in said information. Board members do not represent the parties that proposed them for Board membership or any other parties belonging to their sphere of interest.
The Board of Directors evaluates the independence of its members annually.
Working groups and committees within the Board of DirectorsThe Board has established among its members an Audit Committee, which shall concentrate particularly on review and preparation of matters pertaining to financial reporting and control and a Nomination and Remuneration Committee, which shall prepare the matters pertaining to the nomination and remuneration of board members, the appointment and remuneration of managing director and other executives of the company as well as remuneration schemes of the personnel. The Board has approved written charters for the Committees, which shall be published in its entirety on the company´s Internet site. The Board has not deemed necessary to establish other committees, since, taking into account the scope and nature of the company´s operations as well as Boards´ working methods, the Board is able to handle matters effectively without such committees.
Procedures concerning meetings of the board of directors
The Board of Directors determines annually the dates and venues of its meetings during the year in question. Extraordinary Board meetings are convened by the chairman of the Board of Directors or the president.
Board meetings may be held in the company´s domicile in Kempele or in some other location set by either the Board of Directors or the person convening the meeting. Telephone meetings can also be held if necessary and decisions adopted without holding a meeting by decision minutes.
Invitations to Board meetings are sent in whichever manner is the most appropriate, either by email or telephone. The invitation specifies the items that will be discussed at the meeting (the agenda). Material concerning the items on the agenda is sent to the Board members in good time before the meeting so that they can become thoroughly acquainted with the issues at hand and thus make informed decisions. Board members also have the right to contact the company´s employees or its experts to get more in-depth information if they so wish.
For the Board of Directors to have a quorum, the invitation to the meeting must have been sent appropriately to all Board members. If the invitation has not been sent appropriately, this oversight may be disregarded if all the Board members are present at the meeting or the absent Board members approve the decisions after the fact by, for example, signing the minutes.
The Board meeting has a quorum when at least half of the members are present. A Board member who cannot attend the meeting must notify the person convening the meeting of this in advance.
Right to attend, speak, submit motions and vote
In addition to the Board members, the company´s president, vice president and, when matters arise that are related to the performance of his/her duties, the auditor have the right to attend and speak at Board meetings; in addition, the Board of Directors may invite other persons to the meeting and grant them the right to speak..
Board members and the president shall have the right to submit motions.
Only such Board members who are present at the meeting and who are not impartial have the right to vote. A Board member is impartial in the discussion about any agreement between himself/herself and the company. Neither may he/she take part in the discussion of any matter that concerns an agreement between the company and a third party, where he/she is likely to have a substantial interest in the matter and when this might be at odds with the interests of the company.
Handling matters at the meetings
At the Board meetings, the chairman of the Board chairs the meeting; if the chairman cannot attend, the vice chairman chairs the meeting.
The Board of Directors deliberates on the items on the agenda. The items are presented by the chairman of the Board, the president or some other person who participated in the preparations of the matter at hand and was invited to attend by the Board of Directors.
Items that are not on the agenda may be tabled on the initiative of a Board member or the president. Decisions on other matters may be taken only if all the Board members are present or if the absent Board members approve the decisions after the fact by, for example, signing the minutes.
The Board of Directors shall seek to make unanimous decisions.
In the event of disputes, matters are decided on by voting. The decision of the Board of Directors shall be the view of the majority of the Board members present. In the event of a tie, the chairman has the casting vote. However, if there is a tie in the election of the chairman, the result shall be decided by drawing lots.
Minutes shall be kept at the meetings. The minutes shall be sequentially numbered during each financial period.
The minutes must indicate the time and place of the meeting and list those present, those who announced they would not be able to attend, those absent without reason, the decisions of the meeting and possible votes taken.
The minutes of the Board meetings shall be kept by a company´s employee who has been appointed as secretary by the Board.
The minutes shall be inspected and approved, either by being signed by all the Board members present at the meeting or by being confirmed with the signatures of the chairman of the meeting, the secretary and two examiners of the minutes.
The minutes shall be maintained reliably for as long as the company exists.
Duties and responsibilities of the board of directors
Duties of the Board of Directors
The Board of Directors attends to the company´s administration and the due organisation of operations. The Board´s responsibilities include the duties specified for it in the Companies Act and the Articles of Association. The Board´s main duties include confirming the company´s strategy and budget, deciding on financing agreements and the purchase and sale of major asset items. The Board monitors the company´s financial performance by means of monthly reports drafted by management and other information supplied by management.
The duties of the Board of Directors include, but are not limited to:
Regularly scheduled Board meetings
The Board meets on average once a month and whenever necessary.
The Board of Directors shall hold the following regularly scheduled meetings each year:
1) Financial statement meeting
At the financial statement meeting held after the end of the financial period, the Board of Directors reviews and approves the Group´s and parent company´s financial statements, consolidated financial statements and Report of the Board of Directors.
The Board handles the Audit Committee´s proposal for the election of auditor to the AGM.
The company´s auditor is also present at the financial statement meeting, excluding the handling of evaluation of auditing services and proposal for the election of auditor.
2) Organisation meeting
At its organisation meeting held immediately after the Annual General Meeting, the Board of Directors elects a chairman and vice chairman from amongst its number for a term lasting until the conclusion of the next Annual General Meeting.
The Board evaluates the independence of its members.
The Board elects the members and chairman of the Audit Committee from among the members of the Board
3) Interim report meetings
The Board reviews and approves interim reports (1-3, 1-6 and 1-9) upon their completion.
4) Budget meeting
The Board of Directors reviews and approves the Group´s budget for the next financial period.
5) Publication of financial results and the Annual General Meeting
At a meeting held before the conclusion of the present financial period, the Board of Directors confirms the dates on which financial statement bulletins and interim reports will be published during the next financial period and the date on which the Annual General Meeting will be held.
At a meeting held in the beginning of the each year the Board of Directors reviews the salaries of the president and the directors under the president´s direct supervision. At the start of each year, in good time before the annual general meeting, the Board evaluates its own operations and working methods on the basis of the conducted self-evaluation and decides the development objectives.
Other matters that are part of the Board of Directors´ tasks shall be handled at the meetings when necessary.
Participation in General Meetings
In order to realise interaction between shareholders and the Board of Directors, as well as the right of shareholders to ask questions, a sufficient number of Board members shall be present at the General Meeting. If possible, the entire Board of Directors shall be present at the Annual General Meeting, along with such persons as have been proposed for Board membership for the first time. Depending on the nature of the items under discussion, the majority of the members shall attend extraordinary Board meetings, including the chairman or vice chairman.
Confidentiality and due diligence
The members of the Board of Directors are bound both by general regulations concerning business secrets and corporate secrets (such as the Unfair Business Practices Act and the Criminal Justice Act) and, in the case of the information members receive in the course of their activities and how they deal with said information, by specific insider-related restrictions.
All Corporate Governance-related documents, unpublished stock exchange bulletins, strategic information and project information have been classified as insider information in the company´s internal information security guidelines.
As the members of the Board of Directors handle, in line with the set procedures, confidential information on the company outside the company´s business location, Board members are obligated to exercise greater diligence in handling all information. Both technical means (such as protecting the computers Board members use with personal user names and passwords, virus protection software and firewalls) and accepted practices (such as prohibiting unnecessary archiving, complying with a “clean desk´ policy and deleting or disposing of information in a secure manner) are used to ensure information security.
In all their activities and decision-making, the Board of Directors and its individual members must act diligently and in accordance with the company´s and all its shareholders´ interests. Board members are required to exercise objective diligence. Diligence is defined as the level of prudence that could objectively be expected of a person in a similar position during the situation in question.
A Board member is obligated to compensate for any damage he/she has caused the company either intentionally or through negligence.
Other regulations concerning the activities of the Board of Directors
In all of its activities, the Board of Directors complies with laws, regulations and official decisions, the regulations of the Financial Supervision Authority, the rules and recommendations of NASDAQ OMX Helsinki and the company´s Corporate Governance guidelines.
Publication of the charter
The charter of the Board of Directors shall be published in full on the company´s Internet site and the key sections shall be summarised in the company´s Annual Report.