Corporate Governance Policy
The duties of each of the bodies in Altia Plc are determined by the laws of Finland, the Articles of Association and the company’s Corporate Governance Policy. When applicable, also the Finnish Corporate Governance Code of the Securities Market Association will be followed.
The ultimate responsibility for company management and operations of the company lies with the governing bodies that include the Annual General Meeting of Shareholders, the Board of Directors, the Chief Executive Officer (CEO) and the Executive Management Team. The Executive Management Team makes decisions and operates based on the authorities granted to the CEO.
Altia Plc’s Group business structure has been designed for running the core business: the production, import, export and sales of alcoholic beverages. Management of each of the business areas is based on the abovementioned decision-making bodies and the operating principles ‘one company’ and ‘hands on’.
Each of the core businesses are based on an operating organisation comprising the company’s Executive Management Team, Business Units and Support Functions. The Business Units operate relatively independently within a strategy framework agreed upon with the CEO and the company’s Executive Management Team.
The Support Functions undertake preparatory work and coordinate issues across the Business Units and, in certain defined areas, the Support Functions hold a decision-making authority over the Business Units.
The company’s legal structure differs from that of the operating organisation. The legal structure merely provides a legal framework for business operations. The company operates and is registered in Finland and its head office is located in Helsinki.
General Meeting of Shareholders
According to the Finnish Companies Act, the Annual General Meeting of Shareholders is the highest decision-making body of the company. The exclusive tasks of the General Meeting of Shareholders include amendments of the Articles of Association, decisions on dividends, election of the Board of Directors and Auditors, as well as decision on their remuneration, adoption of the financial statements and increasing or decreasing share capital.
Normally the General Meeting of Shareholders is held once a year.
Board of Directors (Board)
The company is managed by the Board complying with Corporate Governance principles. The Board acts within the powers and responsibilities provided under the Finnish Companies Act and other applicable legislation.
The Board supervises the management and the operation of the company and decides on significant matters relating to strategy, investments, organisation and finance. The Board is responsible for overseeing that the company’s operations are managed and organised appropriately.
In addition to other overseeing, the Board is also responsible for overseeing the functionality and adequacy of financial administration and control of financial matters.
The Board nominates and discharges CEO and his deputy, as well as makes decisions concerning their employment contracts and incentive schemes. The Board also nominates the members of the company’s Executive Management Team, defines their areas of responsibility according to the strategy and makes decisions concerning their employment contracts and incentive schemes.
In the separate charter of the Board of Directors, the Board defines the duties of individual Board members and the Chairman of the Board, as well as the duties and function of the Board as a whole.
The Board also has its own working order complying with the Corporate Governance Policies. The Board evaluates its operations regularly. Each member of the Board is expected to act as a resource for the company management and offer his or her experience and expertise for the benefit of the company.
The Board convenes a minimum of seven times a year.
According to the company’s Articles of Association, the Board comprises the Chairman and Vice Chairman, as well as a minimum of one and a maximum of five other members. The members are appointed by the Annual General Meeting of Shareholders for a period ending at the following Annual General Meeting of Shareholders. The Board’s work is supported through the Audit Committee, as well as the Nomination and Compensation Committee.
CEO
The CEO is responsible for supervising, managing and controlling business operations, with the aim of securing sustained increase in the value of the company for its shareholders.
The CEO prepares issues for the Board’s decision, develops the Group in line with the targets agreed upon with the Board and ensures proper implementation of the decisions of the Board. The CEO is also responsible for ensuring that the Group operates in compliance with local laws and regulations.
The CEO makes the most important decisions in the meetings of the Executive Management Team, and these decisions are recorded. According to a policy by the Owner Steering Department, Prime Minister’s Office, on behalf of the owner, the CEO is not a member of the Board, but attends the Board meetings.
The CEO may have a deputy, who will attend to the duties of the CEO when the CEO is prevented from fulfilling his or her duties. The retirement age for the CEO and his deputy is 63 years.
Executive Management Team
The company’s Executive Management Team (EMT) comprises the CEO as Chairman; CFO; SVP, HR; SVP, Industrial Services and Supply Chain; SVP, Brands; and SVP, Trading. The Executive Management Team is responsible for preparing and monitoring the Group strategy, annual plans and budgets.
The Team convenes at least four times a year.
Business Units
The heads of the Business Units are responsible for their Business Unit and the heads of Support Functions are responsible for their Support Function. The business units pursue their agreed strategies within the frames set by the CEO and the Executive Management Team. In executing their strategies and carrying on business operations, the Business Units operate within the line organisation.
The heads of the Business Units may form management or advisory teams to support them in their duties. Forming of such teams, however, does not affect the agreed individual reporting responsibilities.
BOARD COMMITTEES
Audit Committee
The purpose of the Board’s Audit Committee is to ensure that the Board receives a true and fair view of the company’s financial situation and, therefore, is able to carry out its monitoring responsibilities. The committee members shall review the company’s internal and external auditing work, the company’s financial policies and procedures of risk management in greater detail than is possible for the entire Board.
The Audit Committee comprises a minimum of three members of the Board. At least one of the committee members must have financial administration expertise and significant knowledge and experience in accounting standards and principles applicable to the company.
The committee convenes regularly a minimum of four times a year. The Chairman of the Audit Committee presents the Board with a report of each of the Audit Committee’s meetings. The Audit Committee’s tasks, responsibilities and practical way of working are defined in the Audit Committee charter, which is approved by the Board.
Attendees in the meeting are also the auditor responsible for the external auditing and normally the CEO, CFO and Internal Auditor.
Nomination and Compensation Committee
The committee’s task is to prepare recommendations to the Board regarding new nominations and compensation principles applicable to the executive and senior management. The committee Chairman presents the Board with the committee’s proposals. The committee holds an adequate
number of meetings per year. The committee’s tasks and responsibilities are defined in its
charter, which is approved by the Board. If required, the committee can operate in cooperation with the company’s HR unit.
The nomination and compensation committee comprises the Chairman of the Board and one other Board member, as well as the CEO, who presents the recommendations.
The Auditors and Supervisory System
According to the Articles of Association, the company has to have one to two auditors appointed by the Annual General Meeting. One of the auditors must be approved by the Central Chamber of Commerce in Finland. An entity of Certified Public Accountants can be elected for the company’s sole auditor. Any individual auditor must be under 65 years of age.
External auditors audit annually the accounting records for each quarter, the annual accounts and the corporate governance of the company.
In planning and monitoring the Group companies and business areas the main focus is on business strategies. The Board approves the Group’s strategy and budget. Appropriate reporting systems are used within the company for follow-up of business operations and control of financial matters.
The annual performance bonus system used within the Group is based on the budgeted performance targets and it applies to all Altia personnel. Altia’s long-term sharebased incentive system targets are based on the company’s approved long-term strategy and its implementation. Altia’s top management is included in the share-based incentive system.
Persons belonging to Altia Plc’s management and their related parties are not involved in business relationships with the company.
Supervisory functions promote and monitor the achievement of performance targets. Management and the supervisory functions are responsible for monitoring the operations. The principal tools of internal control are action plans, performance follow-up, risk management principles and risk evaluation, organisation charts, allocation of responsibilities, function and job descriptions, budgets, financial management, as well as internal and external auditing.
The Group’s financial situation is reviewed in Board meetings. The internal auditing function reports directly to the CEO with the aim of ensuring supervision at various organisational levels preventing risks from arising and increasing overall efficiency. The internal auditing function also reports to the auditors and the audit committee.
Shareholder’s status
The State as a shareholder has no responsibilities in the Group, other than its shareholder’s equity investment.