The Board of Directors may establish specific committees to assist the Board of Directors in the preparation and performance of the duties and responsibilities of the Board of Directors, determine their sizes and compositions, and approve their charters. The Board of Directors has established two permanent committees: the Audit Committee and the Remuneration Committee. The committees of the Board of Directors regularly report on their work to the Board of Directors. In addition to the committees of the Board of Directors, Terveystalo has a Shareholders' Nomination Board. The members and Chairmen of the committees are appointed annually by the Board of Directors from among the Board members at the Board of Directors' organizational meeting upon the recommendation of the Remuneration Committee based on each committee member's qualification standards. Neither the CEO nor members of the Executive Team reporting directly to the CEO may be appointed to any committees.
The Audit Committee assists the Board of Directors in fulfilling its oversight responsibilities of the Company's financial reporting processes and in monitoring the audit of the Company. The Audit Committee also assists the Board of Directors in its oversight of matters pertaining to financial reporting, internal control, internal audit and risk management.
The Audit Committee monitors the financial reporting processes, the quality and integrity of the financial statements and other financial reports as well as the financial performance of the Company. It also monitors the statutory audit of the financial statements, consolidated financial statements and the annual, half-year and interim financial reports. In addition, the Audit Committee monitors the effectiveness of the Company's internal control, internal audit and risk management systems and evaluates the performance of the internal audit. The Audit Committee also evaluates the qualifications and independence of the external auditor and, in particular, the provision of non-audit services to the Company, prepares the proposal for the election of the external auditor as well as monitors compliance with legal and regulatory requirements. The Audit Committee prepares the proposal for the remuneration and election or re-election of the external auditor and submits its recommendation for the appointment of the external auditor to the Board of Directors. Further, the Committee shall ensure that the Board of Directors is aware of matters which may significantly impact the Company's financial condition or affairs of the business.
The Audit Committee consists of at least three members appointed by the Board of Directors. The Audit Committee has a Chairman, who is appointed by the Board of Directors. The members of the Audit Committee must meet the independence and expertise criteria and other criteria applicable to Audit Committee members of publicly listed companies in Finland. The Audit Committee as a whole shall have the expertise and experience required for the performance of the Audit Committee's duties and responsibilities. Desirable qualifications for the Audit Committee members include appropriate understanding of accounting practices and financial reporting gained through education or experience in performing or overseeing related functions. At least one Audit Committee member shall have competence in accounting or auditing, and the Audit Committee members as a whole shall have competence relevant to the sector in which the Company operates. The Chairman of the Audit Committee reports regularly to the Board of Directors and submits to the Board of Directors the minutes of its meetings. The Audit Committee meets at least four times per year. The Audit Committee meets separately with the representatives of management, and the external and internal auditor, at least twice a year. The Committee members shall also meet regularly without members of management of the Company present. The Audit Committee meetings may be held by telephone or by electronic means.
Kristian Pullola serves as the Chairman of the Audit Committee and Niko Mokkila and Tomas von Rettig serve as members of the Audit Committee.
The Remuneration Committee of the Board of Directors identifies individuals qualified to serve as the CEO of the Company and makes recommendations to the Board of Directors for approval of the appointment of the CEO. It also assists the Board of Directors in connection with major management reorganizations based on preparation and proposals by the CEO.
The Remuneration Committee assists the Board of Directors with its responsibilities relating to the evaluation and remuneration of the CEO and other members of the Executive Team reporting directly to the CEO, oversees the Company's remuneration policies, schemes and plans as well as reviews appropriate succession planning procedures for the Executive Team.
The Remuneration Committee consists of at least three members appointed by the Board of Directors. The members of the Remuneration Committee must meet the applicable independence criteria applicable to such committee members of publicly listed companies in Finland, including that the majority of the members of the committee have to be independent of the Company. The Remuneration Committee members must have the expertise and experience required for the performance of the duties and responsibilities of the Remuneration Committee. Desirable qualifications for the members of the Remuneration Committee include experience in business management, corporate governance, human resources management and executive remuneration.
The Remuneration Committee establishes its own schedule and meets as frequently as necessary to carry out its responsibilities under its Charter, and in any case at least two times per year.
Kari Kauniskangas serves as the Chairman of the Remuneration Committee and Dag Andersson, Åse Aulie Michelet and Katri Viippola serve as members of the Remuneration Committee.
Shareholders' Nomination Board
On September 26, 2017, the EGM resolved to establish a Shareholders' Nomination Board consisting of shareholders of the Company, or persons appointed by such shareholders, for annually preparing proposals concerning the election and the remuneration of the members of the Board of Directors to the Annual General Meeting. The decision to establish the Shareholders' Nomination Board and to adopt its Charter were made subject to the completion of the Listing.
According to the Charter of the Shareholders' Nomination Board adopted conditionally, the Shareholders' Nomination Board comprises the Chairman of the Board of Directors of the Company and representatives of the four largest shareholders of the Company. However, in case the fifth largest shareholder has a holding that exceeds 10 percent of all the shares and votes in the Company, the five largest shareholders will be represented at the Shareholders' Nomination Board. The four largest shareholders (or, in case the fifth largest shareholder would have a holding that exceeds 10 percent of all the shares and votes in the Company, the five largest shareholders), as determined on the basis of the shareholder register of the Company maintained by Euroclear Finland on the first banking day of the September preceding the Annual General Meeting, shall each have a right to nominate a representative to the Shareholders' Nomination Board.. If two or more shareholders has the same number of shares and cannot all have the right to nominate one of the members of the Shareholders' Nomination Board, the right to nominate shall be determined by the drawing of lots among such shareholders. If a shareholder, who would have the obligation to notify the Company of certain changes in shareholding under the Securities Markets Act (flagging obligation), presents a written request directed to the Board of Directors by the end of August, the holdings of a corporation or a foundation controlled by the shareholder or the shareholder's holdings in several funds or registers will be combined when calculating the nomination right. A holder of nominee-registered shares will be taken into account when determining the composition of the Shareholders' Nomination Board if the holder of nominee-registered shares presents a request concerning the issue directed to the Board of Directors of the Company by the end of the August preceding the Annual General Meeting.
The Chairman of the Board of Directors convenes the first meeting of the Shareholders' Nomination Board and the Shareholders' Nomination Board elects a Chairman amongst its members.