Shareholders' Nomination Board
The Annual General Meeting on 9 April 2013 established a permanent Shareholders’ Nomination Board. The purpose and task of the Shareholders’ Nomination Board is to prepare and present to the Annual General Meeting, and, if necessary, to an Extraordinary General Meeting, a proposal on the remuneration, size and members of the Board of Directors. In addition, the Shareholders’ Nomination Board seeks candidates for potential board members.
The Shareholders’ Nomination Board consists of four members, three of which are appointed by the company’s three largest shareholders, who shall appoint one member each. The Chairman of the Board of Directors serves as the fourth member. The members are nominated annually and their term of office ends when new members are nominated to replace them. Fortum’s three largest shareholders that are entitled to appoint members to the Shareholders’ Nomination Board are determined on the basis of the registered holdings as of the first working say in September in the year concerned. In the event that a shareholder does not wish to exercise their right to appoint a representative, it shall pass the right to the next-largest shareholder who would not otherwise be entitled to appoint a member to the Nomination Board. The Shareholders’ Nomination Board forwards its proposals for the Annual General Meeting to the Board of Directors by 31 January each year.
Diversity Principles for the Board of Directors
The Shareholders’ Nomination Board uses diversity principles for the Board of Directors in line with the Corporate Governance Code 2015. The principles are applied in preparing proposal concerning nomination of board members. The diversity principles include, among others, that the board composition shall include expertise from the geographical areas where Fortum conducts its business, the background profession of the board members shall include such competences that support realisation of Fortum’s strategy and that enable board members to challenge management decisions and to exercise their role of having oversight. In addition, the board composition shall include both genders. Fortum’s target is
to comply with the principles issued in the Government Resolution dated 17 February 2015 on equal gender representation in the boards of listed companies with the aim of the board consisting of at least 40% each of women and men by 2020. The Shareholders Nomination Board reviews the diversity principles and their implementation annually.
Fortum reports the objectives, actions and progress of the diversity principles in its corporate governance statement. The Shareholders’ Nomination Board has applied the diversity principles in preparing the proposal concerning nomination of board members for the Annual General Meeting of 2018. The proposal for the board members for the Annual General Meeting 2018 consisted of 3 women and 5 men.
Shareholders’ Nomination Board prior to the Annual General Meeting 2018
In October 2017, the following persons were appointed to the Shareholders’ Nomination Board:
- Pekka Timonen, Director General of Ministry of Economic Affairs and Employment (Chairman)
- Timo Ritakallio, President and CEO (until 28 February 2018) and Mikko Mursula (from 1 March 2018) of Ilmarinen Mutual Pension Insurance Company and
- Elli Aaltonen, Director General, Social Insurance Institution of Finland (KELA).
The Chairman of the Board of Directors, Sari Baldauf, acted as a member of the Shareholders’ Nomination Board. The Nomination Board convened 4 times and the attendance rate was 100%.
The Shareholders’ Nomination Board proposed to the Annual General Meeting 2018, that the fees to be paid to the members of the Board of Directors are for a term ending at the end of the Annual General Meeting 2019 as follows:
- for the chairman, EUR 75,000 per year;
- for the deputy chairman, EUR 57,000 per year; and
- for each member, EUR 40,000 per year, as well as
- for the chairman of the Audit and Risk Committee EUR 57,000 per year if he/she is not at the same time acting as chairman or deputy chairman of the Board of Directors.
In addition, for each Board of Directors and Board Committee meeting a fee of EUR 600 was proposed. For Board of Directors members living outside Finland in Europe, the proposed fee for each meeting would be doubled, and for Board of Directors members living outside Europe, the proposed fee for each meeting would be tripled. For Board of Directors members living in Finland, the proposed fee for each Board of Directors and Board Committee meeting would be doubled for meetings held outside Finland and tripled for meetings held outside Europe. For Board of Directors and Committee meetings held as a telephone conference, the proposed fee would be paid as single to all members. No fee would be paid for decisions made without a separate meeting.
In addition, the Shareholders’ Nomination Board proposed that the Board of Directors consists of 8 members and that the following persons be elected to the Board of Directors for the upcoming term: Heinz-Werner Binzel, Eva Hamilton, Kim Ignatius, Matti Lievonen (chairman), Anja McAlister, Veli-Matti Reinikkala, and as new members: Essimari Kairisto and Klaus-Dieter Maubach (deputy chaiman). The AGM on 28 March 2018, decided the fees to be paid to the members of the Board of Directors according to the Nomination Board's proposal.