Harvia’s Board of Directors consists of three to six members. The members are elected in the Annual General Meeting for a one-year term which expires at the end of the Annual General Meeting following their election. The Board of Directors elects a Chairperson from among its members. The majority of the Board members shall be independent of the company, with at least two of these members also being independent of the major shareholders of the company. In the selection of members, attention shall be paid to members’ mutually complementary experience and competence in the company’s business area and its development stage.
Rules of procedure of the Board of Directors
The duties and activities of the Board of Directors are defined by the Finnish Limited Liability Companies Act, the Finnish Corporate Governance Code 2020, other applicable legislation, Harvia’s Articles of Association and the Rules of Procedure of the Board of Directors.
The Board of Directors has drafted written Rules of Procedure that define its key duties and operating principles. The Board of Directors approves Harvia’s strategy and supervises its implementation. The duties of the Board of Directors include approving the company’s financial statements and interim reports and monitoring the appropriateness of accounting and the company’s financial management. The Board of Directors decides on significant loans, acquisitions and investments, and approves annual and long-term business plans and budgets as well as the principles of risk management. The Board of Directors also decides on the principles according to which the management may make decisions regarding investments, acquisitions and divestments and issuing of guarantees. The Board of Directors approves the Group’s long- and short-term remuneration schemes and their realization. The Board of Directors appoints Harvia’s CEO and decides on the terms of the CEO’s employment contract.
The Board of Directors assesses its operations and ways of working annually as an internal self-assessment. The self-assessment was carried out also in 2020.
THE BOARD OF DIRECTORS IN 2021
The Annual General Meeting held at 8.4.2021 resolved that the Board of Directors consists of five members. Olli Liitola, Ia Adlercreutz and Sanna Suvanto-Harsaae were re-elected to the Board of Directors and Hille Korhonen and Anders Holmén were elected as new members of the Board of Directors.
All members of the Board of Directors are independent of the company and its major shareholders.
Diversity of the Board
A person elected as a member of the Harvia’s Board of Directors must have qualifications required for the task as well as adequate availability for carrying out the duties of a Board member. When electing Board members, attention shall be paid to members’ mutually complementary experience and competence from the perspective of the company’s business area and its development stage. Varied professional and educational backgrounds support the diversity of the Board. The goal is to promote gender equality in the selection of Board members. There are three men and two women in the five Board members elected by the Annual General Meeting in April 2020.
When electing Board members, the objective is to ensure that the Board of Directors as a whole enables efficient management of the Board’s responsibilities and supports the development of Harvia’s business. In 2020, both genders were represented in the Company’s Board of Directors.
To enhance the efficiency of its work, the Board of Directors has set up an Audit Committee. The Committee has no independent decision making authority; it functions as a preparatory body, and the matters it addresses are brought to be decided on by the Board of Directors. The Board of Directors annually elects from among its members the chairperson and members of the Committee and confirms its written Rules of Procedure. The Audit Committee consists of a minimum of three Board members. The majority of the members of the Committee shall be independent of the company, with at least one member also being independent of the major shareholders of the company. At least one member of the Audit Committee shall also have expertise in accounting or auditing.
When it comes to the company’s financial reporting and auditing, the duties of the Audit Committee consist particularly of monitoring and assessing the company’s financial reporting system, the efficiency of its internal control and audit as well as that of the risk management systems, and the independence of the auditor and especially the non-auditing services provided by the auditor. In addition, the Audit Committee is tasked with monitoring the company’s audit and preparing the selection of the company’s auditor. The Audit Committee prepares the appointment of the CEO and other Management Team members as well as matters pertaining to the company’s remuneration policy and schemes and ensures the appropriateness of the company’s remuneration schemes.
In 2021, the Board of Directors elected from among its members Olli Liitola and Hille Korhonen as members and Sanna Suvanto-Harsaae as Chair of the Audit Committee.
Shareholders’ nomination board
Harvia’s Annual General Meeting held at April 2 2020 resolved that a shareholders’ nomination board shall be established to prepare proposals concerning the election and remuneration of the Board Members as well as the remuneration of the members of the various Board committees that will be submitted to future Annual General Meetings and to any Extraordinary General Meetings where necessary.
Pursuant to the Board’s proposal, the shareholders’ nomination board would be comprised of representatives appointed by the company’s four largest shareholders.
Each year, those four shareholders that hold the largest share of the votes conferred by all shares in the company on the first working day of the September preceding the applicable Annual General Meeting pursuant to the shareholders’ register maintained by Euroclear Finland Ltd will be entitled to appoint members that represent the shareholders.
The Chairman of the Board of Directors will request the four largest shareholders, which will be determined as stated above, to each appoint one member to the shareholders’ nomination board. In the event that a shareholder has divided its holdings e.g. between several funds or its holdings are registered in several registers and the shareholder is obliged, under the Finnish Securities Markets Act, to take these holdings into consideration when disclosing any changes in its ownership shares (flagging obligation), all of the holdings of such a shareholder will be taken into consideration when calculating its share of all votes in order to determine whether the said shareholder is entitled to appoint a member to the shareholders’ nomination board if the shareholder submits a written request to the Chairman of the Board of Directors to that effect on the 31st day of the August preceding the applicable Annual General Meeting.
In the event that two or more shareholders hold equal ownership shares and the representative of both or all shareholders cannot be appointed to serve on the shareholders’ nomination board, the right to appoint a representative to the shareholders’ nomination board will be decided by drawing lots.
If a shareholder does not wish to exercise its right of appointment, the right will be transferred to the next largest shareholder that would otherwise not have the right of appointment.
The Chairman of the Board of Directors will convene the first meeting of each term of office of the shareholders’ nomination board, and the representative of the largest shareholder will be appointed as the chairman of the shareholders’ nomination board, unless the shareholders’ nomination board specifically decides otherwise. In the event that the representative of one of the largest shareholders simultaneously serves as the Chairman of the company’s Board of Directors, they cannot be appointed as the chairman of the shareholders’ nomination board, but they can serve as a member thereof as a representative of the relevant shareholder. Once the shareholders’ nomination board has been elected, the company will publish a stock exchange release to announce the composition thereof.
The shareholders’ nomination board must submit its proposal to the company’s Board of Directors on an annual basis and at the latest on the 31st day of the January preceding the applicable Annual General Meeting. The shareholders’ nomination board must keep all proposals confidential until the company has published them. All inside information that the members of the shareholders’ nomination board become aware of is subject to the provisions of the Finnish Securities Markets Act.
The shareholders’ nomination board that will be established will operate until further notice, i.e. until the General Meeting decides otherwise. The term of office of the members of the shareholders’ nomination board will end upon the appointment of the members of the new shareholders’ nomination board. The members of the shareholders’ nomination board will not receive any compensation for acting as a member thereof. The members will be compensated for their travel costs in accordance with the company’s travel policy. In order to carry out its duties and where necessary, the shareholders’ nomination board may retain the services of external experts whose costs are subject to the approval of the company.
The Shareholders’ Nomination Board has the following members: Juho Lipsanen (Onvest Oy), Heikki Savolainen (WestStar Oy), Antti Katajisto (SEB Investment Management AB) and Pertti Harvia (Tiipeti Oy). Olli Liitola, Chairman of the company’s Board of Directors, serves as an expert in the Nomination Board but is not a member.