the General Meeting electing the member and expiring at the close of the third (3rd) Annual General Meeting after the election.
The General Meeting elects all members of the Board of Directors. According to the Corporate Governance Recommendation, the majority of the Board members must be independent of the company. A member is considered to be independent of the company if he/she has no signifi- cant connection to the company other than membership of the Board of Directors. In addition, at least two (2) of the members belonging to the above majority must be independent of the company’s significant shareholders. The Board of Directors evaluates the independence of its members annually in accordance with the Corporate Governance Recommendation.
The Board of Directors elects a Chairman and a Deputy Chairman from among its members annually after the Annual General Meeting.
Deviation from the Corporate Governance recommendation
The terms of the members of Kesko’s Board of Directors deviate from the term of one year specified in item 12 of the Corporate Governance Recommendation. A General Meeting makes decisions on all amend- ments concerning the Articles of Association. A shareholder which, together with controlled companies, holds over 10% of all voting rights attached to Kesko’s shares, has informed the company’s Board of Direc-
tors that it considers the term of three years good for the company’s long-term development and sees no need to shorten the term of office set in the Articles of Association.
Duties
The function of Kesko’s Board of Directors is to duly arrange the com- pany’s management, operations and accounting, and to supervise the company’s financial management. The Board of Directors has con- firmed the written rules of procedure that specify the Board of Direc- tors’ duties, business to be handled, meeting practice and decision- making process. According to the rules of procedure, the Board of Directors handles and decides on all matters that are financially, com- mercially or fundamentally significant for the Group’s operations.
According to the rules of procedure, the responsibilities of the Board of Directors include:
making decisions on Group strategy and confirming strategies for
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the divisions,
making decisions on Group structure and organisation,
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handling and adopting interim financial reports, consolidated
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financial statements and the Annual Report,
confirming the Group’s operating plan, budget and investment plan,
● ● Internal Audit Corporate Management Board Auditors Kesko Group’s Corporate Governance structure
Annual General Meeting Board of Directors Audit Committee Compensation Committee
Kesko Corporation
Konekesko ltd Intersport Finland ltd Indoor Group ltd Musta Pörssi ltd Kenkäkesko ltd Tähti Optikko Group OyKauko-Telko ltd K-instituutti Oy K-Plus Oy other subsidiaries President and CEO Kesko Food ltd Rauta- kesko ltd VV-Auto Group Oy Anttila Oy Kesko Agro ltd
making decisions on strategically or financially important individ-
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ual capital expenditure, acquisitions, disposals or other arrange- ments, and contingent liabilities,
confirming the Group’s risk management and reporting practice,
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confirming the Group’s insurance policy,
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approving the Group’s financing policy,
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making decisions on reward and incentive schemes for Group
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management,
establishing a dividend policy and being responsible for the devel-
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opment of shareholder value,
appointing the company’s Managing Director and determining his/
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her remuneration,
appointing the Managing Directors of the major subsidiaries,
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confirming Kesko’s values to be applied in the Group, and
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handling the Corporate Responsibility Report.
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Decision-making
Kesko’s Board of Directors is always obliged to act in the interests of the company and in such a way that their operations will not give an unjustifiable advantage to a shareholder or other party at the expense of the company or another shareholder. A member of the company’s Board of Directors is disqualified to participate in the handling of any matter between him/her and the company. The Chairman of the Board of Directors is responsible for convening and conducting Board meet- ings. When a vote is taken, the Board of Directors’ decision will be the opinion of the majority. If the vote results in a tie, the decision will be the opinion seconded by the Chairman. If the votes cast at an election end in a tie, the result will be decided by drawing lots.
Meeting practice and self-assessment of operations
Kesko’s Board of Directors meets about 10 times a year. The Board of Directors has not distributed any special areas of focus in terms of business monitoring to its members. The Board of Directors’ Audit Committee and Compensation Committee assist the Board by prepar- ing the matters that must be decided by the Board. The Board of Direc- tors regularly assesses its operations and working practices by carry- ing out a self-assessment once a year.
Fees and other benefits of the Board of Directors
The Annual General Meeting makes decisions on the fees paid to the members of Kesko’s Board of Directors and the basis for compensation for their expenses annually. Fees to the members of the Board of Direc- tors are paid as monetary compensation. Board members have no share-linked fee systems.