Corporate Governance
Norvestia complies with the Finnish Corporate Governance Code issued by the Securities Market Association on June 15, 2010. The Corporate Governance Code is available in full at www.cgfinland.fi.ANNUAL GENERAL MEETING
The Annual General Meeting is the company's highest decision-making body and it normally convenes once a year. At the Annual General Meeting shareholders exercise their right to vote on company affairs. The AGM decides on the matters laid down in the Companies Act and in Norvestia's Articles of Association, e.g. approving the financial statements, discharging the Board of Directors and Managing Director from liability, on dividend distribution and on any amendments to the Articles of Association. It also elects the chairman, vice chairman and other members of the Board of Directors and the auditors, and decides on their remuneration. The last ordinary general meeting was held on March 14, 2011. For more information about the decisions of the AGM, please go to GENERAL MEETINGS.The notice to the general meeting is made available on the company home page at least 21 days before the general meeting. The notice and the proposals of the company's Board to the General Meeting are published in a stock exchange release. The notice is delivered at the earliest three (3) months and at the latest three (3) weeks before the date of the meeting mentioned in the notice yet by latest nine (9) days before the record date of the general meeting by publishing the notice on the company home page.
SHARES
Norvestia Oyj's B share is quoted on the Nasdaq OMX Helsinki Ltd. The company has two share series: the unlisted A shares and the listed B shares. The share capital of Norvestia Oyj amounts to 53,607,960 euros. The share capital is divided in 900,000 A shares with 10 votes, and 14,416,560 B shares with 1 vote, in all 15,316,560 shares. Information on shareholders and the ownership structure can be found under INVESTORS.BOARD OF DIRECTORS
The Board of Directors is tasked with organizing the company’s management and operations and of ensuring that the company complies with laws and regulations. The Board monitors the company's book-keeping and attends to that the company's asset management is appropriate. The Board appoints the Managing Director and decides on the Managing Director's remuneration.Composition
Every year the AGM elects Board members for a term lasting until the following AGM. The AGM also appoints a chairman and a vice chairman from among the Board members. The notice of the general meeting contains a proposal for the composition of the Board of Directors.
According to Norvestia’s Articles of Association the Board of Directors comprises 3-8 regular members and at most 4 vice members. In 2011 the Board of Directors consists of five regular members. The Board members are not of both genders and the composition of the Board does not meet the recommendation in this respect. Due to the company’s small size, this is a long-term goal.
The Board consists of the following persons:
Chairman:
J.T. Bergqvist, Year of Birth 1957
Doctor of Science (Technology)
CEO, K. Hartwall Oy Ab
Vice Chairman:
Hilmar Thór Kristinsson, Year of Birth 1971
Bachelor of Science (Economics)
Specialist, Kaupthing Bank hf.
Other regular members of the board:
Freyr Thordarson, Year of Birth 1973
Bachelor of Science (Economics), MBA
Senior Manager, Kaupthing Bank hf.
Georg Ehrnrooth, Year of Birth 1966
Agrologist
Robin Lindahl, Year of Birth 1964
Master of Science (Economics)
Executive Vice President, Market Operations, Outotec Oyj
Independence of Board members
All the Board members are independent of the company. Board members independent of significant shareholders of the company are: J.T. Bergqvist, Georg Ehrnrooth and Robin Lindahl. Due to the ownership structure of the company it has been considered important that the majority shareholder has a strong position on the Board. Hilmar Thór Kristinsson and Freyr Thordarson represent the majority shareholder, Kaupthing Bank.
Work procedures
Each year, at the meeting held after the AGM, the Board lays down its own working procedures, rules of procedure for the Managing Director and working procedures for the audit committee. The Boards working procedures include instructions on the form and content of Board meetings, the company’s financial reporting, investments and external communications among others. The Board reviews and approves the power- and authorization order and rights to sign for the company. The Board also annually conducts an internal self-evaluation of its work.
Information to the Board
The Board receives twice a month the company’s portfolio report, which includes detailed information about the company’s investments and their returns. The company performance is presented at every Board meeting. The Board also receives drafts of the interim reports, financial statements and annual reports before the Board meeting, where these matters are handled.
Meetings
In 2010, the Board met 11 times with a participation activity of 84%.
The chairman of the Board is responsible for calling a Board meeting whenever necessary. Regular Board meetings deal with internal reports on the company’s operations and performance and approve external reports, such as interim reports, financial statements, and annual reports among others. Strategic questions are discussed if necessary. An agenda is drawn up for each Board meeting and distributed to the members in advance. All meetings are minuted and the minutes are then reviewed and distributed to the members of the Board and auditors.
Audit committee
The Board selects an audit committee from among its members, which primary duty is to monitor the work of the auditors and any issues therein arising. The members shall have the qualifications necessary to perform the responsibilities of the audit committee. The audit committee follows additionally the financial position of the company and monitors its financial reporting. It is further responsible for evaluating the adequacy and appropriateness of internal supervision and risk management, evaluating compliance with laws and regulations, maintaining contact with the auditor, examining the auditor’s reports and evaluating any advisory services supplied by the auditor. The committee reports to the Board regularly.
Members of the audit committee are Robin Lindahl (chairman) and Georg Ehrnrooth (member). Both members are independent of the company as well as of significant shareholders of the company. The audit committee comprises two members, which deviates from the recommendation. The Board considers the number of members to be sufficient due to the relatively small size of the company.
In 2010, the Audit Committee met twice with a participation activity of 100%.
The company has no other Board committees.
MANAGING DIRECTOR
Juha Kasanen, Year of Birth 1957
Master of Science (Technology), Licentiate of Science (Economics)
The Managing Director attends to the day-to-day management of the company in accordance with instructions and orders issued by the Board of Directors, ensures that the company’s books are kept in compliance with the law and that its operations are in keeping with any other statutory regulations. The Managing Director is also responsible for the safety of the company’s asset management arrangements. The Managing Director is not a member of the Board.
REMUNERATION
The AGM annually approves the fees paid to Board members, and the Board decides on the salaries and other benefits of the Managing Director. The Board decides on any bonuses paid to the Managing Director. The Board members are remunerated only in respect of their Board membership.
In accordance with the decision of the Annual General Meeting on March 14, 2011, the Board members are remunerated as follows:
• the chairman of the Board is paid an annual fee of EUR 54,000,
• the vice chairman is paid an annual fee of EUR 30,000 and
• other regular members are paid an annual fee of EUR 30,000.
In addition, a meeting fee of EUR 350 is paid for work on Board committees. All travel and accommodation expenses of the Board members are paid according to invoice. The Board has no money loans, pension benefits or other collateral or liability obligations.
The pension benefits of the Managing Director are based on the Finnish Employees’ Pensions Act (TyEl). The term of notice is one month, and the compensation for notice corresponds to a salary of eight months. The Managing Director is paid a monthly fixed salary and a bonus. The bonus is based on the company’s annual net asset value return after expenses and taxes. The Board of Directors determines the grounds for the bonus. The bonus potential is set at 90 percent of the yearly fixed salary.
In 2010, a total of EUR 405,000 was booked in monthly salary, benefits and bonus to the Managing Director. The share of the monthly salary was EUR 264,000, of which benefits EUR 2,000. The share of bonus was EUR 141,000.
THE MAIN FEATURES OF INTERNAL SUPERVISION AND RISK MANAGEMENT
The aim of the internal supervision and risk management is to ensure that the company operates in the most efficient and profitable manner, that information is reliable, and that regulations and operating principles are followed.
Internal supervision is carried out by the company’s management as well as by all company personnel. The Board carries the ultimate responsibility for supervision of book-keeping and financial management, and the Managing Director is responsible for the practical organization of internal supervision and risk management.
The Managing Director is responsible for seeing that the company and its subsidiaries have appropriate internal control. The parent company reviews its own book-keeping and reporting, and the financial statements, market values and portfolio reports of its subsidiaries. The basic idea behind the company’s internal control system is that a third party always examines any completed work.
The Board of Directors and the Managing Director are responsible for the company’s risk management and decide upon matters concerning risk. The main risks arising from the company’s financial instruments are market risk and foreign currency risk. In addition, credit risk arises from the company’s money market investments. Because of the vast amount of cash the company’s exposure to liquidity risk is very small. The guiding principle of the company’s investments is to diversify its investments and thereby reduce overall risk. Additionally the company protects its investments from time to time with options and forward index contracts.
EXTERNAL AUDIT
According to the Articles of Association, the company has at least one regular auditor who must be a public accountant authorized by the Central Chamber of Commerce. The Annual General Meeting elects the auditor/auditors, whose term extends until the end of the first annual general meeting following their election. The proposal for auditor is presented in the notice of the general meeting.
In connection with the annual financial statements, the auditors prepare the auditor’s report to the company’s shareholders. The purpose of the statutory external audit is to verify that the financial statements give a true and fair view of the result and financial position of the company. The audit constitutes an independent statement to the shareholders concerning management of the book-keeping, financial statements and administration of the company.
The auditor of the Norvestia Group is CPA Rabbe Nevalainen and the deputy auditor of the group is Ernst & Young Oy. The auditors’ expenses are compensated according to invoice. In 2010 EUR 29,000 was paid for audit work in Norvestia Group and Norvestia Oyj.
INSIDER GOVERNANCE
The company complies with the guidelines for insiders issued by Nasdaq OMX Helsinki Ltd October 9, 2009. The company’s Board of Directors, Managing Director and auditors belong to the public insider register. The information about holdings and connections in Norvestia’s public insider register is updated as changes happen. The company also maintains a company specific insider register, which includes all company personnel as well as persons that regularly receive insider information. The company specific insider register is not public.