The Board of Directors has general responsibility to confirm Consti Plc’s strategy and monitor its implementation in a manner that enables accomplishing the financial targets and maximises shareholder value in the long term taking into consideration key stakeholder expectations.
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COMPOSITION AND ELECTION OF THE BOARD
Under the Articles of Association, Consti´s Board of Directors has a minimum of three (3) and maximum of nine (9) members. The term of office of a member of the Board of Directors shall commence from the Annual General Meeting at which the Director was elected and end at the close of the next Annual General Meeting. The Board elects a Chairman and a Deputy Chairman from among its members.
A first-time candidate for membership of the Board must participate in the shareholder's meeting at which the election takes place unless there are good reasons for his/her absence.
The Board of Directors evaluates the independence of its Members.
A proposal for the composition of the Board of Directors is prepared by the Nomination Board established annually by the Board of Directors.
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DUTIES OF BOARD OF DIRECTORS
Under the Finnish Limited Liabilities Companies Act, it is the task of the Board of Directors to attend to Consti’s administration and organization of its operations. The Board of Directors must also ensure that there is due monitoring of bookkeeping and financial administration. The Board of Directors monitors Consti’s financial development from monthly executive reports and other information presented by the management.
The Board of Directors makes decisions on strategically or financially important investments, contingent liabilities and other significant issues for the Company’s business. The Board of Directors also decides on principles by which the management may make decisions on investments, acquisitions and disposals, contract agreements and guarantees.
The Board of Directors
- defines the Company’s dividend policy;
- decides on donations within the framework of the Finnish Companies Act;
- defines the operating principles for the risk management system and internal control;
- considers and approves interim reports, the report of the Board of Directors and the annual financial statements;
- confirms its own Rules of Procedure;
- confirms the Company’s operating method and the principles and guidelines that guide it, as well as monitors how they are carried out;
- approves the Company’s strategy and related sustainability goals and monitors how they are carried out;
- approves annually a business plan and budget based on the strategy and monitors how they are carried out;
- sets personal goals for the CEO annually and assesses how they are achieved as well as approves the targets for the members of the Management Team and assesses how those are achieved;
- confirms the Group’s organizational structure;
- appoints and discharges from their duties the CEO and the members of the Management Team and decides on their terms of employment and incentive schemes;
- prepares draft resolutions as necessary for the General Meeting of Shareholders concerning remuneration schemes for management and personnel;
- monitors succession issues of the management;
- considers other matters that the Chairman of the Board or CEO has submitted on the agenda. Members of the Board are also entitled to bring matters before the Board by informing the chairman of this.
As Consti does not have a separate Audit Committee, the Board of Directors duties also are:
- to monitor the Company’s financial reporting process;
- to supervise the financial reporting process;
- to monitor the effectiveness of the Company’s possible internal control, internal audit and risk management systems and the Company’s related party transactions according to the reporting standards;
- to review the description of the main features of the internal control and risk management systems in relation to the financial reporting process given by the Company on its management and control system;
- to monitor the statutory audit of the financial statements and consolidated financial statements;
- to assess the independence of the statutory auditor or audit company and in particular the provision of other services to the audited company;
- to prepare the proposal for resolution on the election of auditors.
The Company has no separate organization for internal audits. This is taken into account in planning financial audit and audits based on quality control systems.
The Chairman
- makes sure that the meetings marked in the Board’s schedule are convened;
- convenes extra meetings of the Board if necessary;
- approves the agenda prepared by the CEO and the persons presenting items on the agenda as well as the invitation of other necessary people to the meetings;
- ensures that the minutes of a meeting correspond to the meeting;
- keeps in contact as necessary with members of the Board between meetings;
- keeps in contact as necessary with the Company’s owners and other interest groups;
- is responsible for planning the activities of the Board and for assessing these;
- acts as the CEO’s administrative supervisor.
When the Chairman is unable to carry out his duties, his/her duties shall be carried out by the Deputy Chairman.
The Board of Directors constitutes a quorum when more than half of the Board Members are present. Decisions are made with a simple majority. In the event of a tie, the chairman’s vote is decisive.
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.
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BOARD MEETINGS
The Board of Directors shall convene in accordance with a previously agreed schedule, normally 7-8 times a year. The Board of Directors can hold additional meetings when necessary. Telephone meetings can also be held and decisions adopted without holding a meeting by decision minutes signed by all of the members of the Board of Directors. Minutes shall be kept at the meetings. The minutes shall be sequentially numbered during each financial period.
The Board of Directors shall seek to make unanimous decisions. In the event of disputes, matters are decided on by voting.
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THE BOARD’S COMMITTEES
The Board has set up a Nomination and Compensation Committee to improve the efficiency of board work. The Board nominates the Members and the Chairman of the Committee from among its members annually, and confirms the Committee’s written charters. The Committee has no independent decision-making power; it prepares matters to be presented to the Board, with the exception of its proposal for composition and compensation for the Board of Directors which the Committee directly presents to the Annual General Meeting.
The Board has decided not to appoint a separate Audit Committee and the Board will take care of its responsibilities. If necessary, the Board may establish committees and working groups from among its members to prepare other important decisions.
The Nomination and Remuneration Committee
The Nomination and Remuneration Committee shall have at least three Board Members. The majority of the committee members must be independent of the company.
The duties of the Nomination and Remuneration Committee include
- preparation of the proposal for the appointment of Board Members to be presented to the General Meeting;
- preparation of the proposal to the General Meeting on matters pertaining to the remuneration of Board Members;
- taking care of the succession planning of Board Members;
- presentation of the proposal for the appointment of Board Members to the general meeting;
- preparation of matters pertaining appointment of the CEO, deputy CEO, and other executives as well as the identification of their possible successors;
- preparation of matters pertaining to the remuneration and other financial benefits of the CEO, Deputy CEO and other executives;
- preparation of matter pertaining to the remuneration schemes of the company;
- evaluation of the remuneration of the CEO, Deputy CEO and other executives as well as seeing to it that the remuneration schemes are appropriate;
- answering questions related to the remuneration statement at the General Meeting.
The Nomination and Remuneration Committee shall also prepare the evaluations of the independence of Board Members and the Company’s diversity policy. In addition to the tasks listed above, the Nomination and Remuneration Committee may have other tasks.
The committee convenes at least three times a year in order to prepare the proposals to be presented to the Annual General Meeting.
The CEO will participate in the Committee meetings except when matters regarding him/her or the appointment of Board Members are discussed.
The committee shall report on its work to the Board.
Remuneration paid for the committee work shall be resolved by the General Meeting of shareholders.