|Board members’ independence in 2015|
|Independent of the Company||Independent of a significant shareholder|
|Esa Kiiskinen (Ch.)||No***||Yes|
|Mikael Aro (Dep. Ch.)*||Yes||Yes|
|Seppo Paatelainen (Dep.Ch.)**||Yes||Yes|
|* As of 13 April 2015|
|** Until 13 April 2015|
|*** Each of the companies controlled by Kiiskinen, Korpisaari and Pokela has a chain agreement with a Kesko Group company.|
|**** In its meeting on 11 January 2016, the Board of Directors considered Tomi Korpisaari not to be independent of a significant shareholder, because he is the Chair of the Board of a significant Company shareholder, the K-Retailers’ Association. The total voting interest of the K-Retailers' Association in the Company exceeded 10% on 23 December 2015.|
Kesko's Board of Directors is responsible for the proper organisation the Company's administration, operations, accounting and financial management controls. The Board is also responsible for the supervision and control of the whole Kesko Group. The Board of Directors has confirmed a written charter for the Board of Directors’ duties, the matters it deals with, its meeting practice and the decision-making procedure. In accordance with the charter, the Board deals with and makes decisions on matters that are financially, operationally or fundamentally significant to the Group.
According to the charter, the Board of Directors’ main duties include:
The duty of Kesko's Board of Directors is to promote the interests of Kesko and all of its shareholders. The Board members do not represent the parties in the Company that have proposed their election as Board members. A Board member is disqualified from participating in the handling of any matter between him/her (including entities over which he/she exercises control) and the Company. When a vote is taken, the Board's decision will be the opinion of the majority and if a vote results in a tie, the decision will be the opinion supported by the Chair. If the votes taken at an election of a person end in a tie, the result will be decided by drawing lots.
In 2015, the Board held 13 meetings. The Board members' attendance rate at the Board meetings was 100%.
In 2015, the Board of Directors adopted a new strategy for Kesko Group, decided to establish common functions to support the Group’s business operations, to strengthen the competitiveness of business operations through closer internal cooperation, and to start the simplification of the Group’s legal structure. For the purpose of improving profitability and competitiveness, the Board of Directors discussed and approved cost saving targets. In respect of strategic issues related to the Group’s property ownerships and property management, the Board decided to establish a common real estate investment company jointly with two other investors and to sell properties to this company. The Board also decided on significant business arrangements in line with the Group’s confirmed strategy.
As in previous years, the Board reviewed the financial reports and monitored the Group's financial situation, approved the most significant capital expenditures, monitored the progress of Group-level projects and approved the interim reports and the financial statements prior to their disclosure.
The Board meetings regularly discuss the review by the President and CEO on key topical issues, as well as the reports by the Chairs of the Board's Audit Committee and Remuneration Committee on Committee meetings preceding the Board meetings. The Auditor presents his findings to the Board once a year in connection with the review of the financial statements.
|Attendance at meetings by members of the Board and its Committees in 2015|
|Board member since||Committee membership||Board||Audit Committee||Remuneration Committee|
|Esa Kiiskinen (Ch)||2009||Remuneration Committee (Ch.)||13/13||3/3|
|Mikael Aro (Dep. Ch.)*||2015||Audit Committee (Dep. Ch.)||10/10||4/4|
|Remuneration Committee (Dep. Ch.)||1/1|
|Matti Kyytsönen*||2015||Audit Committee||10/10||4/4|
|Anu Nissinen*||2015||Remuneration Committee||10/10||1/1|
|Kaarina Ståhlberg*||2015||Audit Committee (Ch.)||10/10||4/4|
|Ilpo Kokkila**||2006||Remuneration Committee||3/3||1/2|
|Maarit Näkyvä**||2001||Audit Committee (Ch.)||3/3||1/1|
|Seppo Paatelainen (Dep. Ch.)**||2006||Audit Committee (Dep. Ch.)||3/3||1/1|
|Remuneration Committee (Dep. Ch.)||2/2|
|Virpi Tuunainen**||2012||Audit Committee||3/3||1/1|
|* As of 13 April 2015|
|** Until 13 April 2015|
Kesko has the Board’s Audit Committee and Remuneration Committee, both of which are composed of three (3) Board members. At the close of the Annual General meeting, the Board elects the Chairs, the Deputy Chairs and the members of the Committees from among its members for one year at a time.
All members of the Audit Committee are independent of the Company and the Company’s significant shareholders. In the election of the Audit Committee members, the competence requirements for Audit Committee members have been taken into account.
All members of the Remuneration Committee are independent of the Company's significant shareholder and its majority is also independent of the Company. In the election of the Remuneration Committee members, the competence requirements for Remuneration Committee members have been taken into account.
The Committees regularly assess their operations and working methods and carry out a related self-assessment once a year. The Board has confirmed written charters for the Committees, which contain the main duties and operating principles of the Committees.
The Committees have no independent decision-making power. Instead, the Board makes decisions based on the Committees’ preparatory work. The Committee Chair reports on the Committee's work at the Board meeting following the Committee's meeting. Minutes of the Committee meetings are submitted for the information of the Board members.
Kesko's Board of Directors has not established any other committees in addition to the Audit and Remuneration Committees. Nor has the General Meeting appointed any committees or boards.
The members of the Audit Committee, elected by the Board's organisational meeting held after the Annual General Meeting 2015, are:
According to its charter, the duties of the Audit Committee are:
In 2015, the Audit Committee held five (5) meetings, and the members' attendance rate at the meetings was 100%. At the Committee meetings, the Group's Chief Financial Officer, the Group Controller, the Chief Audit Executive and the Group General Counsel regularly report on their areas of responsibility to the Committee. The Committee also receives reports on Kesko Group's funding situation, taxation, information management, risk management and insurances. The Auditor is present at the Committee meetings and presents his audit plan and report to the Audit Committee.
During the year, the Committee reviewed the reports on the Group's financial situation, including the financial statements release and interim reports and made a recommendation to the Board on the review of the interim reports and the financial statements release. In addition, the Committee reviewed the reports of the Group's external and internal audits, risk management and legal affairs, and the Group’s adoption of integrated reporting, the impacts of the pension reform on the Group’s reporting, the impacts and risks of the strategic business arrangements, the simplification of the Group structure, as well as the changes required by the revised Corporate Governance Code. The Committee also assessed the Auditor's independence and provision of consultation services to the Group. The Audit Committee prepared and submitted a proposal to Kesko’s Annual General Meeting 2015 for the election of the Auditor based on the competitive bidding process for Auditors conducted towards the end of 2014.
The members of the Remuneration Committee, elected by the Board's organisational meeting held after the Annual General Meeting 2015, are:
According to its charter, the duties of the Remuneration Committee are:
In 2015, the Remuneration Committee held three (3) meetings and the members' attendance rate at the meetings was 88.9%. The Committee prepared, among other things, proposals to the Board for the vesting criteria and the target group of share awards and for the principles of management's performance bonuses. In addition, the Committee discussed, among other things, the remuneration schemes of management and personnel and the development of the schemes, as well as the impacts of the pension reform and possible needs for change at Kesko Pension Fund arising from it.
Kesko has a managing director who is the President and CEO. Kesko’s President and CEO is Mikko Helander, Master of Science in Technology. He became Kesko’s President and CEO on 1 January 2015. Helander was a member of the Group Management Board and Kesko’s Executive Vice President from 1 October 2014 until 31 December 2014, and he has been the Chair of the Group Management Board since 1 January 2015.
The President and CEO's duty is to manage Kesko Group’s operations in accordance with the instructions and orders issued by the Company’s Board of Directors and to report to the Board about the developments in the Company's business operations and financial situation. He is also responsible for the Company's day-to-day administration and for ensuring that the financial management has been organised in a reliable manner. The President and CEO also chairs the Group Management Board and the subsidiary Boards essential with regard to business operations.
The President and CEO is elected by the Board of Directors. The Board has decided the terms and conditions of the President and CEO's service contract. A written managing director's service contract, approved by the Board, has been made between the Company and the President and CEO.
Kesko Group has a Group Management Board, the Chair of which is Kesko's President and CEO.
The Group Management Board does not have any powers under law or the Articles of Association. The Group Management Board’s duty is to discuss Group-wide development projects and Group-level policies and procedures. In addition, the Group Management Board discusses the Group's and the division parent companies' business plans, profit performance and matters dealt with by Kesko's Board of Directors, in whose preparation it also participates. The Group Management Board meets 18–20 times a year.
|Group Management Board’s members and their areas of responsibility as at 31 Dec. 2015|
|Group Management Board member since||Area of responsibility|
|Mikko Helander, Chair||1 Oct. 2014||Kesko's President and CEO|
|Jorma Rauhala, President of Kesko Food Ltd||5 Feb. 2013||Grocery trade|
|Terho Kalliokoski, President of Rautakesko Ltd||17 Mar. 2005||Home improvement and speciality goods trade|
|Pekka Lahti, President of VV-Auto Group Oy||1 Mar. 2005||Car trade|
|Jukka Erlund, Senior Vice President, Chief Financial Officer||1 Nov. 2011||Finance and accounting|
|Matti Mettälä, Senior Vice President||1 Oct. 2012||Human resources|
|Anne Leppälä-Nilsson, Senior Vice President, Group General Counsel||1 Jan. 2015||Legal affairs|
|Lauri Peltola, Senior Vice President||2 Mar. 2015||Corporate responsibility,|
communications and stakeholder relations
|Anni Ronkainen, Senior Vice President||20 Apr. 2015||Chief Digital Officer|
Kesko complies with the insider rules of Nasdaq Helsinki Ltd. Kesko's Board of Directors has confirmed Kesko's insider guidelines for permanent and project-specific insiders. The contents of the guidelines correspond to the insider rules of Nasdaq Helsinki. Kesko's insider guidelines have been distributed to all insiders.
In accordance with the Securities Markets Act, Kesko's permanent public insiders include Kesko's Board members, the President and CEO (managing director), and the audit firm's auditor with principal responsibility for Kesko. Kesko Corporation's Board of Directors has also defined that, in addition to the President and CEO, the other members of the Group Management Board belong to the Company's permanent public insiders. The permanent public insiders and the statutory information about them, about their related parties and about the corporations that are controlled by them, or in which they exercise influence, have been recorded in Kesko's register of public insiders.
Other permanent insiders of Kesko include persons working at any given time in positions defined by the Board of Directors and having access to insider information and who are therefore recorded in the Company's company-specific, non-public insider register. Kesko's company-specific insider register is divided into project registers concerning permanent insiders and possible insider projects and persons participating in their preparation.
The Group's legal affairs function supervises compliance with insider guidelines and maintains the Company's insider registers in cooperation with Euroclear Finland Ltd. At regular intervals, the legal affairs function sends an extract of the information in the insider register to permanent public insiders for checking and reminds permanent insiders about upcoming trading restrictions preceding the publication of financial results and monitors compliance with them and with trading restrictions during possible insider projects.
In 2015, Kesko's permanent insiders were not allowed to acquire or transfer securities issued by the Company and securities or derivative contracts entitling to them during the 21 days preceding the publication of an interim report, and during the 28 days preceding the publication of the financial statements (trading restriction). These publication dates are annually announced in advance in a stock exchange release. It has also been requested that permanent insiders' spouses refrain from trading in Kesko securities or derivative contracts during these trading restriction periods. Furthermore, people involved in possible insider projects, whether included in the insider register or not, are not allowed to trade in Kesko's securities or derivative contracts during an insider project.
As of the beginning of 2016, the duration of permanent insiders’ trading restriction prior to result publications is 30 calendar days.
The legal affairs function annually organises training on insider issues and related matters concerning the disclosure obligation of a listed company within the Group.