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| Investor Information | Corporate Governance statement |
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Corporate Governance Statement Etteplan (extract from Etteplan’s Annual Report 2009) (PDF 55 KB)
GENERAL GOVERNANCE PRINCIPLES
Etteplan Oyj is a Finnish public limited company that in its decision-making and governance complies with the Finnish Companies Act, other legislation concerning publicly listed companies, and the Articles of Association of Etteplan Oyj.
Etteplan is a publicly listed company that abides by the regulations of NASDAQ OMX Helsinki Ltd. The company is committed to compliance with the corporate governance code for listed Finnish companies, published by the Securities Market Association on 22 October 2008 except with reference to the Audit Committee (recommendations 24-27), because the company does not have an Audit Committee.
The company’s highest decision-making body is the general meeting of shareholders, where shareholders exercise their right to monitor and control the company's operations. The company must hold one Annual General Meeting for shareholders during each financial year, by the end of June. If necessary, an extraordinary meeting of shareholders is held.
The shareholders exercise their right to speak and vote at the shareholder meeting. The matters to be considered at the Annual General Meeting (AGM) are specified in section 8 of Etteplan’s Articles of Association and in Chapter 5, Section 3 of the Companies Act.
Decisions by the AGM are published without delay after the meeting by a stock exchange release and on the company’s Web site.
In 2010 the Annual General Meeting of Shareholders was held on March 24, 2010 at the premises of Company in Vantaa.
Providing shareholders with information from shareholder meetings
The Board of Directors convenes an Annual General Meeting or an extraordinary meeting with a summons to be published on the company’s Web site. The summons must list the agenda for the meeting. The Board of Directors may also decide to publish the invitation to the General Meeting of Shareholders in a one Finnish national newspaper, determined by the Board of Directors. The summons to a meeting and the Board’s proposals for the meeting are also published as a stock exchange release.
Participation in an Annual General Meeting
To be able to participate in an Annual General Meeting, a shareholder must be registered in the list of Etteplan Oyj's shareholders, maintained by Euroclear Finland Ltd. A nominee-registered shareholder who intends to take part in an AGM must report such intentions to the book-entry register authority in good time before the meeting and comply with the instructions received from the bank. Shareholders must register for an AGM in advance, within the time prescribed in the summons. A shareholder may participate in an Annual General Meeting personally or through a duly authorized proxy. The proxy must present a power-of-attorney form for such authorization. Upon registration for an Annual General Meeting, the shareholder must report to the company any powers of attorney issued. The shareholder and proxy may have an assistant present at the meeting.
Participation in shareholder meetings by Board members, the CEO, and the auditor
The CEO, the chairman of the Board, and a sufficient number of Board members must be present at a general meeting of shareholders. Furthermore, the auditor must be present at the Annual General Meeting.
General meeting participation of a Board candidate
A person who is for the first time a candidate for the Board of Directors must participate in the meeting that decides on the election, unless there are weighty grounds for absence.
Date for the Shareholders Meeting
The Board of Directors is responsible for the company’s management and for the due organization of the company’s operations in accordance with the relevant legislation and the company’s Articles of Association. The Board of Directors controls and monitors the company’s operations and management; appoints and dismisses the CEO; and approves the major decisions affecting the company’s strategy, capital expenditures, organization, remuneration and bonus systems covering the management, and finances. The Board of Directors is responsible for the due organization of the company’s management and operations as well as for ensuring that the supervision of the company’s accounting and treasury management is appropriately arranged
Rules of procedure of the Board of Directors
As part of the company’s corporate governance, the Etteplan Oyj Board of Directors has approved written rules of procedure to control Board work. The Board's rules of procedure complement the stipulations of the Finnish Companies Act and the Articles of Association of the company. The shareholders can assess the activities of the Board on the basis of the rules of procedure.
Board meetings and assessment of activities
The Etteplan Board of Directors met 17 times in 2009. In addition to the members of the Board, the company's CEO attended Board meetings. The average attendance percentage at the meetings was 94.8%. The Board meets as often as appropriate fulfilment of its obligations requires.
On an annual basis, the Board of Directors assesses its activities and work practices. The Board specifies the criteria to be used in the assessment, which is carried out as internal self-evaluation. The results of these activities are handled by the Board.
Composition of the Board of Directors
The Annual General Meeting elects the Board of Directors members. The Nomination and Remuneration Committee of the Board of Directors of Etteplan Oyj prepares a list of proposed members of the Board of Directors for consideration by the Annual General Meeting. The Board-proposed candidates are reported upon in the summons to the meeting and on the company’s Web site.
According to the Articles of Association, the Board of Directors shall have a minimum of three and a maximum of seven members. The Board of Directors shall be elected for a term of one year at the Annual General Meeting. In accordance with the proposal of the Board of Directors´ Nomination and Compensation Committee the Annual General Meeting held on 24 March 2010 re-elected Tapio Hakakari, Heikki Hornborg, Robert Ingman and Pertti Nupponen as members of the Board of Directors as well as Satu Rautavalta and Teuvo Rintamäki were elected as new members of the Board of Directors.Tapio Hakakari, Robert Ingman, Pertti Nupponen, Satu Rautavalta and Teuvo Rintamäki are independent of the company. The Board of Directors of Etteplan Oyj has in its meeting on March 24, 2010 elected Heikki Hornborg as Chairman of the Board. Personal information, shareholdings, essential work experience, and most significant simultaneous positions of trust of the Board of Directors are presented on the company’s Web site.
The composition of the Board of Directors
BOARD COMMITTEES
Nomination and Remuneration Committee
The Board of Directors of Etteplan Oyj has appointed a Nomination and Remuneration Committee among the directors. The Board has confirmed the central duties and operating principles of the committee in a written chapter. The Nomination and Remuneration Committee reports on its work to the Board.
The task of the Nomination and Compensation Committee is to assist the Board of Directors in matters related to the appointment and compensation of the Company's CEO, the Deputy CEO and the senior management and prepare matters related to the reward schemes for employees. In addition, the committee prepares for the Annual General Meeting a proposal on the number of Board members, Board composition and Board member compensation. The committee also recommends, prepares and proposes to the Board the CEO’s and the Deputy CEO’s nomination, salary and compensation, and further evaluates and provides the Board and the CEO with recommendations concerning management rewards and compensation systems.
The Board of Directors appoints the CEO and terminates this employment, as well as monitors the CEO’s activities. The parent company’s CEO furthermore acts as the Group’s Chief Executive Officer. The CEO is responsible for managing the Group’s day-to-day operations in accordance with the rules and instructions issued by the Board of Directors. The CEO may take measures that are unusual and far-reaching with regard to the scope and nature of the company’s operations, but only with authorization from the Board of Directors. The CEO is responsible for ensuring that the company’s accounting complies with the applicable legislation and that its asset management is arranged in a reliable manner.
Matti Hyytiäinen has been the company’s President and CEO since the beginning of 2008. He is not a member of the Board of Directors, but he attends Board meetings. The.President and CEO’s personal, information, shareholdings, essential work experience, and most significant simultaneous positions of trust are presented on the company’s Web site.
A written CEO agreement has been drawn up for the President and CEO.
The CEO appoints members to the Management Group who, individually and jointly, are appropriate from the standpoint of line operations. The Management Group assists the CEO and also develops and monitors all matters entrusted to the company’s management, including those connected with the Group and business unit strategies, acquisitions and major capital expenditures, divestments, the company’s image, monthly reporting, interim reports, investor relations, and the main principles of the human resource policy. The Board of Directors approves the appointment of the Management Group members.
As of 1 January 2010, the members of the Management Group are Matti Hyytiäinen, President and CEO; Pia Björk, Vice President, Operations Development and M & A; Niclas Gräns, Vice President, Per-Anders Gådin, Chief Financial Officer; Outi-Maria Liedes, Vice President, HR and Communications; and Juha Näkki, Vice President. The personal information, shareholdings, essential work experience, and most significant simultaneous positions of trust of the members of the Management Group are presented on the company’s Web site.
Vice President Peter Jahn has been appointed as a member of the Management Group as of February 8, 2010. Peter Jahn’s personal information, shareholdings, essential work experience, and most significant simultaneous positions of trust are presented on the company’s Web site.
Contact Information for the President and CEO and Management Group
Compensation of members of the Board of Directors
According to the resolution passed by the Annual General Meeting of 2009, the remuneration for each member of the Board of Directors is 600 euros per meeting and for the chairman of the Board of Directors 1,200 euros per meeting. In addition, each member of the Board receives 1,300 euros per month and the chairman of the Board of Directors 2,600 euros per month.
Compensation and other benefits of the President and CEO
The President and CEO’s compensation consists of a basic salary and a yearly bonus decided annually by the Board on the basis of the Corporation’s financial result and other key targets. The yearly bonus may not exceed 100 percent of the recipient’s annual salary. In 2009, President and CEO Matti Hyytiäinen’s basic salary was EUR 239,912. He has also car and phone benefits, which in 2009 totaled to EUR 16,020. In addition, EUR 43,702 performance based bonus was paid to President and CEO in 2009.
Matti Hyytiäinen belongs to the target group of a share-based incentive plan for the key employees of Etteplan Group. The bonus accrued from 2008 and paid in April 2009 was 4 451 Etteplan Oyj shares together with an estimated cash bonus to cover taxes and similar charges arising from the receipt of shares. According to the resolution made by the Board of Directors of Etteplan Oyj there were no disposal of company-held shares for the 2009 earnings period.
In 2009 EUR 9 500 was paid for the additional accrual basis pension insurance policy for the President and CEO. Statutory retirement age applies to the President and CEO. In the event of dismissal, the President and CEO is entitled to receive compensation equivalent to 18 months’ salary which includes the salary for a six-month term of notice.
The salaries and fees of the Management Group
The system of compensation for the members of the Management Group includes a base salary and a profit-related bonus that is based on the company's profit and the result within the member's area of responsibility. The yearly bonus may not exceed 100 percent of the recipient’s annual salary. Members of the Management Group are included in the share-based incentive plan for the company’s key personnel, whose second earnings period ended in the period under review.
The compensation principles for the Management Group are determined by the CEO in cooperation with the Board of Directors. The Board is authorized to make decisions related to the share-based incentive plan in 2008, 2009, and 2010, by earnings period.
No separate agreement has been made regarding early retirement for members of the Management Group. In the event of dismissal, a Management Group member is entitled to receive compensation equivalent to a maximum of six months’ salary
Internal control
The objective of Etteplan Oyj’s internal control and risk management is to ensure that the company’s operations are efficient and profitable, its information is reliable, and it complies with appropriate regulations and operating principles. The objectives also include identification, assessment, and monitoring of risks related to business operations. .
Risk management
Management and mitigation of the impact of risks is one of the Group’s main principles of operation. The Board of Directors and the Management Group monitor the development of risks and concentrations of risk. The Group’s financial administration operations monitor and assess operational and financial risks and take measures to avert them in cooperation with the Board of Directors, the Management Group, and the management personnel responsible for corporate planning.
Risks related to Etteplan Group’s business operations are divided into external and internal risks, and the risks are monitored according to this classification.
External risks
External risks include risks concerning economic development on the whole and unpredictable changes in customers’ order books, which are classified as the greatest risk in the company’s business operations.
Internal risks
Internal risks include strategic and operating risks, as well as financing risks.
Etteplan’s most significant strategic risks relate to development of business operations and acquisitions. The company aims to manage these risks by following its acquisitions policy and applying procedures and models that have been prepared on the basis of this policy. In addition to acquisitions, organic growth is an important part of the growth objectives for Etteplan’s business.
Etteplan’s greatest operating risks are related to commissions and personnel. The company’s commissions involve risk of services or performances including a professional error, omissions, or other negligence that could cause significant financial or other damage. In order to contain operating risks, the company applies the following procedures: application of quality management systems, codes of practice, and acceptance procedures; coupled with training of personnel; and compliance with instructions on management of quotes and contracts, particularly in delimitation of contractual liability. The company has a liability insurance program that encompasses the entire Group. However, the insurance does not cover all liability risks. The company’s business is based on professional personnel. Availability of competent professionals is an important factor in ensuring profitable growth and continued high-quality business operations.
Reviews concerning financing risks are presented in the notes to the financial statements.
Internal auditing
Internal auditing within Etteplan Group is an administrative function reporting directly to the CEO and forms part of the Group’s financial administration. Internal auditing is supported by the quality management system. The Group’s internal control is organized among others according to a system that includes monthly reporting, comparing actual performance to the budgeted plan and actual performance in the preceding year. The operating income statement is reconciled with regular bookkeeping and interim reports.
Description of the main features of the internal control and risk management systems pertaining to the financial reporting process
Etteplan prepares consolidated financial statements and interim reports in accordance with the International Financial Reporting Standards, as adopted by EU, the Securities Markets Acts as well as the appropriate Financial Supervision Authority Standards and NASDAQ OMX Helsinki Ltd’s rules. The Report of the Board of Directors of Etteplan and parent company financial statements are prepared in accordance with Finnish Accounting Act and the opinions and guidelines of the Finnish Accounting Board.
Etteplan Group has a group level accounting policies and instructions that are applicable for all group companies and according to which group financial reporting is prepared. Together with reporting calendar and schedules, accounting policies and instructions form the framework for timely and correct group reporting. Etteplan’s business operations are in all material respects located in Finland and Sweden and both countries have local accounting and financial reporting organisations, systems and reporting to the Group. Internal control and risk management systems and practices as described below are designed to ensure that the financial reports as disclosed by the company give essentially correct information about the company finances.
Etteplan has a common group consolidation system. Accounting data is transferred from the local accounting systems either automatically or manually and correctness is controlled by the group accounting team. Common chart of accounts forms the basis of group reporting. Group accounting, consolidation and published financial reports are prepared by the centralised team.
Internal control over financial reporting
Proper arrangement and monitoring of internal control is the responsibility of the local management in accordance with the group framework. Etteplan Board has approved operating principles of internal control, which have been prepared in accordance with the Code recommendation 45. Operating principles include the main features of risk management process, summary of risks, control objectives and common control points for financial reporting as well as roles and responsibilities in executing and monitoring internal control in Etteplan. Internal controls over financial reporting process at the country and group level has been focus area in 2009. Etteplan finance organisation has analysed process risks and defined control objectives for external financial reporting process. Existing control points in the process have been documented. These control points include for example reconciliations, authorisations, analysis, and segregation of key accounting duties. The work has been led by the Group CFO.
According to its annual clock, Group Management Team has monthly meetings where also financial performance and financial reporting is analysed. Prior to these meetings, financial reports have been analysed in the division level to detect any irregularities or errors. Group level financial reports are prepared to the Etteplan Board on a monthly basis. The Board also reviews and approves interim financial reports, annual results report and financial statements.
Etteplan does not have separate internal audit function. The Board can engage external advisors to perform evaluations relating to control environment or other activities.
INSIDERS
The Etteplan Oyj Board of Directors has approved insider regulations for the company. The regulations are based on the Finnish Securities Markets Act, and they comply with the standards of Financial Supervision and the Guidelines issued by the NASDAQ OMX Helsinki Ltd, which took effect on 9 October 2009. In accordance with the Finnish Securities Markets Act, Etteplan Oyj's insiders are defined to consist of insiders with the duty to declare their interests, permanent company-specific insiders, and project-specific insiders.
Because of the nature of their position, also among Etteplan’s statutory insiders are the members of the Board of Directors, the CEO, and the chief auditor from the chosen auditing firm (a company of independent public accountants). Moreover, the members of the Management Group are entered in the public insider register. The company maintains a permanent company-specific insider register, which includes front-line managers for business operations, financial administration personnel, and those working for the company on the basis of an employment or other contract who receive insider information.
A project-specific insider register is created by decision of the Board of Directors, the CEO, or the Management Group.
The company’s insider guidelines direct insiders to restrict their trading in the company’s shares to times when the markets have as precise information as possible on the factors influencing the value of shares in the company. Consequently, Etteplan’s public and permanent company-specific insiders may trade in Etteplan securities only within a window of six weeks following announcements of financial results, provided that the person concerned is not registered in a project-specific insider register.
Maintenance of the public insider register of Etteplan Oyj is the responsibility of the Chief Financial Officer, who is responsible for compliance with insider regulations and fulfilment of duties to report. Etteplan Oyj’s insider registers are maintained by the company’s head office, which updates the information that, as required by law, is entered in the public insider register for Euroclear Finland Ltd pertaining to insiders with the duty to declare.
The primary duty of statutory auditing is to verify that the financial statements give correct and sufficient information about the Group’s profit and financial situation for the financial year. Etteplan Oyj’s financial year is the calendar year. The auditor is responsible for auditing the company’s accounts and the correctness of its financial statements during the financial year, and for issuing an auditor’s report to the Annual General Meeting.
A summary of the Group’s audit report is compiled for the Board of Directors. Also, the auditors of all Group companies report separately to the management of each company within the Group. The auditors attend at least one meeting of the Board of Directors in the relevant financial year.
The Annual General Meeting elects one regular auditor to audit corporate governance and accounts. The auditor must be a firm of independent public accountants so authorized by the Central Chamber of Commerce. In 2010, the Annual General Meeting elected PricewaterhouseCoopers Oy, a firm of authorized public accountants, with Mika Kaarisalo, APA, acting as chief auditor. The auditor’s term ends at the conclusion of the first Annual General Meeting after the election.
Auditing was opened for competitive bidding at the beginning of 2009, and the Board’s proposal for the auditor is included in the summons to the AGM.
Audit fees and services not related to auditing
The audit fees paid in 2009 totaled 84,968 euros (in 2008: 95,285 euros). In addition, 58,926 euros was paid to the firm for services not related to auditing (in 2008: 47,253 euros).
It is Etteplan Oyj’s principle to be open, truthful, and quick in all communications. The primary objective of the company's investor information is to provide the market with information about the Group's operations and financial standing. The goal is to give all stakeholder groups correct and uniform information in a regular and balanced manner.
Silent period
Etteplan Oyj follows a so-called silent period before publication of interim reports and financial statement bulletins. The duration of the silent period is two weeks.
Distribution of investor information
Etteplan publishes all of its investor information on the company’s Web site at www.etteplan.com. Financial bulletins will be made available for viewing and printing immediately after publication. They will be published in Finnish and English. |
