To this end the members of the Board are expected to act as a resource and to offer their expertise and experience for the benefit of the company. The tasks and responsibilities of the company’s Board of Directors are determined on the basis of the Finnish Companies Act as well as other applicable legislation.
The Board of Directors has general authority to decide and act in all matters not reserved for other corporate governance bodies by law or under the provisions of the company’s Articles of Association. The general task of the Board of Directors is to organize and oversee the company’s management and operations and it has the duty at all times to act in the best interest of the company.
The Board of Directors has established the rules of procedure that define its tasks and operating principles in the Charter of the Board of Directors.
The main duties of the Board of Directors are as follows:
With respect to directing the company’s business and strategies:
- Decide on Outokumpu’s strategy and long-term targets and monitor their implementation;
- Decide on annual business plans;
- Decide on annual limits for the Group’s capital expenditure, monitor related implementation, review performance and decide on changes;
- Decide on any major and strategically significant investments;
- Decide on any major and strategically important business acquisitions and divestments;
- Decide on any significant financing arrangements;
- Decide on any other commitments by any of the Group companies that are out of the ordinary either in terms of value or nature, taking into account the size, structure and field of the Group’s operations.
With respect to organizing the company’s management and operations:
- Nominate and dismiss the CEO and his/her deputy, if any, monitor his/her performance and to decide on the CEO’s terms of service, including incentive schemes, on the basis of a proposal made by the Board’s Remuneration Committee;
- Nominate and dismiss the members of the Outokumpu Leadership Team and to define their areas of responsibility based on a proposal by the Board’s Remuneration Committee;
- Monitor the adequacy and allocation of the Group’s top management resources;
- Decide on any significant changes to the Group’s business organization;
- Decide on the Group’s ethical values and modes of activity;
- Ensure that policies outlining the principles of corporate governance are in place;
- Ensure that policies outlining the principles of managing the company’s insider issues are being observed;
- Ensure that the company has guidelines for any other matters that the Board deems necessary and that fall within the scope of the Board’s duties and authority.
With respect to the preparation of matters to be resolved by the General Meetings of Shareholders:
- Establish a dividend policy and issue a proposal on dividend distribution;
- Make a proposal to the Annual General Meeting concerning the election of an external auditor and auditing fees;
- Make other proposals to General Meetings of Shareholders; With respect to financial control and risk management:
- Discuss and approve interim reports, statements and annual accounts;
- Monitor significant risks related to the Group’s operations and the management of such risks;
- Ensure that adequate policies for risk management are in place;
- Monitor financial position, liquidity and debt maturity structure;
- Monitor the Group’s control environment; Reassess its activities on a regular basis.
The Board of Directors shall have a quorum when more than half of its members are present. A decision by the Board of Directors shall be the opinion supported by more than half of the members present at a meeting. In the event of a tie, the Chairman shall have the casting vote.
The Annual General Meeting elects the Chairman, the Vice Chairman and the other members of the Board of Directors for a term expiring at the close of the following Annual General Meeting. The entire Board of Directors is, therefore, elected at each Annual General Meeting. A Board member may be removed from office at any time by a resolution passed by a General Meeting of Shareholders. Proposals to the Annual General Meeting concerning the election of Board members that have been made known to the Board of Directors prior to the Annual General Meeting will be made public if such a proposal is supported by shareholders holding a minimum of 10% of all the company’s shares and voting rights and the person being proposed has consented to such nomination.
Under the company’s Articles of Association, the Board shall have a minimum of five and a maximum of twelve members.
The Annual General Meeting 2018 decided in accordance with the proposal by the Nomination Board that the Board of Directors would consist of six (6) members. Kati ter Horst, Heikki Malinen, Eeva Sipilä and Olli Vaartimo of the current members of the Board of Directors were re-elected and Kari Jordan and Pierre Vareille were elected as new members for the term of office ending at the end of the next Annual General Meeting. Kari Jordan was elected as the Chairman and Olli Vaartimo as the Vice Chairman of the Board of Directors.
The Board of Directors has set up two permanent committees consisting of Board members and has confirmed the rules of procedure for these committees. Both committees report to the Board of Directors.
The Audit Committee consists of a minimum of three Board members. The rules of procedure for and responsibilities of the Audit Committee have been established in the Charter of the Audit Committee approved by the Board of Directors.
The task of the Audit Committee is, in greater detail than is possible for the Board as a whole, to deal with matters relating to financial reports and statements, the company’s financial position, auditing work, fees paid to the auditors, internal controls and compliance matters, the scope of internal and external audits, the Group’s tax position, the Group’s financial policies and other procedures for managing Group risks. In addition, the Audit Committee prepares a recommendation to the Board of Directors concerning the election of an external auditor and auditing fees at a General Meeting.
The Audit Committee met six times during 2017, and the average attendance rate was 96%.
The Remuneration Committee consists of the Chairman of the Board and a minimum of two additional Board members. The rules of procedure for and responsibilities of the Remuneration Committee have been established in the Remuneration Committee Charter approved by the Board of Directors.
The tasks of the Remuneration Committee are to discuss and prepare recommendations to the Board regarding new nominations in and compensation principles applicable to the Group’s executive and senior management. The Board of Directors has authorized the Remuneration Committee to determine the terms of service and benefits enjoyed by the Outokumpu Leadership Team members other than the company’s CEO.
The Remuneration Committee met four times during 2017, and the average attendance rate was 100%.
Temporary working groups
To handle specific tasks, the Board of Directors can also set up temporary working groups consisting of Board members. These working groups report to the Board of Directors.
No temporary working groups were set up in 2017.