Board of Directors
The duties and responsibilities of the Board of Directors are governed by the Finnish Companies Act and other relevant legislation. The Board of Directors oversees the management and business operations of Tikkurila.
In accordance with the Articles of Association, the Board of Directors of Tikkurila Oyj comprises 3–7 members that have been elected by the Annual General Meeting for a term that lasts until the end of the next Annual General Meeting. The Board is convened by the Chairman, which is elected by the Board within its members immediately after the Annual General Meeting of the Shareholders. The Board of Directors has a quorum when more than half of its members attend the meeting. The President and CEO, as well as the CFO, of the Group attend the Board meetings presenting the issues being discussed or decided upon, and the Group Vice President, Legal Affairs, acts as the Secretary of the Board.
The main duties of the Board include:
- to approve the strategy of the Group;
- to decide on long-term financial and operational goals;
- to approve business plans;
- to decide on any major corporate restructuring, merger, acquisition or divestment;
- to decide on major investments and major expenses, commitments and internal policies;
- to decide on key funding and risk management issues and related pledges and commitments;
- to approve or confirm the appointment and remuneration of the Group management;
- to appoint and dismiss the Group President and CEO, and to confirm the appointments of the members of the Tikkurila Management Team;
- to monitor and evaluate the performance of the Group President and CEO;
- to ensure the adequacy of planning, information and control systems, as well as the handling of financial reporting and risk management;
- to make proposals for, including but not limited to proposing the dividend payout, and to convene the Annual General Meeting;
- to oversee that the Group's disclosure policy is applied; and
- to ensure that the supervision of the accounting and financial matters, and any audits thereby, are properly organized.
On April 12, 2018, the AGM elected seven Board members. The AGM re-elected Jari Paasikivi, Riitta Mynttinen, Pia Rudengren, Petteri Walldén and Harri Kerminen and elected Catherine Sahlgren and Heikki Westerlund as new members to the Board of Directors. Furthermore, Jari Paasikivi was re-elected as Chairman and Petteri Walldén as Vice Chairman.
In 2017, the Board of Directors met 12 times. The average attendance rate at the meetings was 99%.
All of the Board members are independent of the company, and other members than Jari Paasikivi are also independent of major shareholders. Chairman of the Board, Jari Paasikivi, is the CEO of Oras Invest Oy, and hence he is not independent of the key shareholders, since Oras Invest Oy owns approximately 18 percent of Tikkurila Oyj’s shares.
Duties and responsibilities
According to the Articles of Association, the Board of Directors is tasked with duties within its competence under the Companies Act. It has drawn up a written Charter defining its key duties and procedures. The following is a description of the essential contents of the Charter. The Board of Directors is in charge of Corporate Governance and the due organization of the Company’s operations.
The Board of Directors shall see to the administration of the Company and the appropriate organization of its operations in accordance with the Finnish Companies Act, Articles of Association and the Charters of the Board or its Committees. It decides on convening, prepares the agenda for the shareholders’ meeting and ensures the practical implementation of decisions taken therein. In addition, the Board of Directors decides on authorizations for representing the Company.
The Board of Directors’ key duties include matters which, in view of the scope and type of the Company’s operations, involve substantial or wide-ranging effects. These include establishing the Company’s long-term goals and the strategy for achieving them, approving the annual business plans and budget, defining and approving corporate policies in key management control areas, approving the Company’s organizational structure and appointing the CEO, his deputy and members of the Tikkurila Management Board. The Board of Directors approves the Company’s investment policy and major investments and divestments. It also approves the group treasury policy, the major long-term loans and the guarantees issued by the Company.
The Board’s duties include ensuring that the Company has adequate planning, information and control systems and resources for monitoring results and managing risks in operations. The Board of Directors monitors and evaluates the performance of the CEO, his deputy and members of the Tikkurila Management Board and decides upon their remuneration and benefits. The Board’s duty is to ensure continuation of the business operations through succession planning for key persons. The Board defines and approves the main principles for the incentive bonus systems within the Company.
The Board of Directors also manages other tasks within its competence under the Companies Act. It is responsible for the due organization of the supervision of the Company’s accounting and asset-liability management. The Board of Directors sees to it that the Company’s financial statements give a true and fair view of the Company’s affairs, that the consolidated financial statements are prepared in accordance with the International Financial Reporting Standards (IFRS) and the parent company’s financial statements are conformant to the acts and regulations in force in Finland (FAS). The Board of Directors’ meetings discuss the Company’s profit performance at monthly level. The Board of Directors discusses the Company’s audit with the auditor. The Board of Directors evaluates its performance and working methods on an annual basis.
Tikkurila Oyj’s Board of Directors has, on February 2, 2010, appointed an Audit Committee which works in accordance with its Charter confirmed by the Board of Directors. It is tasked with assisting the Board of Directors in fulfilling its oversight responsibilities for financial reporting process, the system of internal control, the audit process and Tikkurila’s process for monitoring compliance with laws and regulations and the Code of Conduct.
The Audit Committee of Tikkurila does not have any executive power.
The Audit Committee is responsible for for example:
- to assess and oversee the preparation of Tikkurila’s financial statements and interim reports, and to review the results of any impairment testing;
- to evaluate Tikkurila’s compliance with laws, regulations and Tikkurila’s internal Code of Conduct and Corporate Social Responsibility programs;
- to approve audit plans for both external audit and internal audit;
- to prepare the election of auditors;
- to review the Group’s risk management policies and action; and
- to review Tikkurila’s corporate governance statement.
The Audit Committee consists of members independent of the Company, elected by the Board of Directors from amongst its members. In 2017, the Audit Committee was chaired by Pia Rudegren and had Eeva Ahdekivi and Riitta Mynttinen as members. The Committee reports to the Board of Directors on each meeting.
During 2017, the Audit Committee met five times. The attendance rate was 100 percent. The Group’s Chief Financial Officer, Jukka Havia, acted as the Secretary of the Committee.
In 2018, the Audit Committee is chaired by Pia Rudengren and has Riitta Mynttinen and Heikki Westerlund as members.
In its meeting held on March 28, 2012, Tikkurila Oyj's Board of Directors decided to establish a Remuneration Committee. The Remuneration Committee is chaired by Jari Paasikivi and has Harri Kerminen and Petteri Walldén as members.
During 2017, the Remuneration Committee met three times. The attendance rate was 100 percent.
Diversity of Board of Directors
When designing the composition of the Board of Directors, the Nomination Board of Tikkurila assesses the composition from the viewpoint of the company’s current and future business needs, while taking into account the diversity of the Board.
The diversity of the Board of Directors will be assessed from various viewpoints. Tikkurila’s Board of Directors shall have sufficient and complementary experience and expertise in the key industries and markets relevant to Tikkurila’s business. In addition, an essential element is the personal characteristics of the members and their diversity.
Knowledge of the company’s value creation drivers
Accounting and finance
The company's aim is that the Board of Directors represent expertise in different industries and markets, diverse professional and educational background, diverse age distribution and both genders. Concerning gender diversity, the objective is that both genders are represented in the Board by at least two members.
The realization of the diversity principles is monitored and reported in the company's Corporate Governance Statement and Corporate Responsibility Report.