Board of Directors
Duties and Responsibilities of the Board
- The Board is responsible for supervising the management and proper organization of the Group in accordance with legislation, the Articles of Association and the instructions issued by General Meetings.
- The Board decides upon matters of major importance to the operations of the company. These include the acceptance of the main strategies, the approval of action plans, major capital expenditures and divestitures of assets.
- The Board appoints and dismisses the company's CEO and decides on his/her service terms.
The Board meets regularly at least 8 times a year and additionally when necessary. The Board met 14 times in 2011. The average attendance of the directors at the Board meetings was 97 percent.
Election of the Board
The Board of Stonesoft Corporation comprises no fewer than three and no more than seven members. The term of a Board member shall begin at the end of the General Meeting that elected the Board member and expire at the end of the next Annual General meeting. The Board elects a Chairman and Vice Chairman from among its members. The Board currently comprises five members, one of whom is employed by the company. Having five board members is considered to be suitable for a company of this size. Longer time period goal is to get the board members from both sexes.
Composition
Stonesoft Corporation's Board of Directors comprises of the following (click the name of the Board Member for more information):
Independence
The Board has evaluated the independence of its members on April 13, 2011 in compliance with the guidelines of the Corporate Governance Recommendation issued by OMX Nordic Exchange Helsinki Oy, the Central Chamber of Commerce of Finland and the Confederation of Finnish Industry and Employers. It is required in the Recommendation that the majority of the Board members are independent of the company. In addition, at least two of the Board members representing this majority shall be independent of significant shareholders of the company. Significant shareholder means a shareholder who holds at least 10 % of all the shares or of the aggregate votes in the company.
Independence of the company
It was noted that based on the evaluation all other Board members, except Ilkka Hiidenheimo as CEO, are independent of the company with the following remark: Jukka Manner, Harri Koponen and Timo Syrjälä have been granted stock option rights as part of their compensation as Board members.
Independence of significant shareholders
It was noted that Ilkka Hiidenheimo (holding approximately 16,4 percent of the shares and the votes in the company) and Hannu Turunen (holding approximately 11,6 percent of the shares and the votes in the company) are significant shareholders themselves, and that all other Board are independent of significant shareholders of the company.
Board Committees
The Board of Directors decided in April 2011 to establish an Audit Committee. To the Audit Committee, three (3) to five (5) members are elected for one year at the time. The members must have the qualifications required for Audit Committee’s duties. The Audit Committee’s duty is to prepare and assist the Board of Directors in the company's financial reporting matters and ensure that the company has an adequate internal audit system with respect to its size. In addition, the Audit Committee assists the Board of Directors in ensuring that the company's accounting and asset management are organized in a reliable manner and that the company's activities are in compliance with laws and regulations. In particular, the Audit Committee shall:
Fees, Share Ownership and Options of Members of the Board
The fees paid to members of the Board in 2011 were as follows:
The Chairman's fee is EUR 4,000 per month and the member's fee is EUR 2,000 per month. In addition Stonesoft Corporation's Annual General Meeting has granted stock options to the Board members.
See Board and Management holdings.
Board Working Order
1. Constitution and term of office
In accordance with the company’s Articles of Association, the Board of Directors has no less than three and no more than seven ordinary members. The term of office of a Board Member begins from the end of the General Meeting that elected the Board Member and continues until the end of the next Annual General Meeting.
2. Chairman and secretary
The Board elects in its organization meeting a chairman and a vice chairman and appoints a secretary for the Board.
3. Duties
The Board of Directors attends to the company’s administration and proper organization of its operations in accordance with applicable legislation and the Articles of Association and decisions made by the General Meeting. The Board of Directors is responsible for organizing appropriate supervision of company’s accounting and financial administration. Matters, which are of major significance or importance for the company, are to be handled and decided by the Board of Directors.
The Board of Directors shall:
1) Approve of the company’s strategy and the annual business plan.
2) Decide on significant investments, acquisitions and financing arrangements.
3) Elect and dismiss a Chief Executive Officer (CEO) for the company and approve election of members to the Executive Management and supervise that the CEO leads the company´s activities in compliance with the instructions given by the Board of Directors
4) Decide on the remuneration and bonuses for CEO and new recruitments and salary adjustments for Executive Management and vice presidents reporting to CEO
5) Sign and present the financial statements for approval by the Annual General Meeting and to present a proposal for profit disposal.
6) Grant and revoke the right to represent the company.
7) Approve the values of the company and main guidelines for the company´s business operations.
8) Establish and elect the members of Board committees, if needed.
9) Evaluate the independence of the Board members.
10) Annually assess the activities and the working manners of the Board.
4. Meetings
The Board’s meeting schedule for the year in question shall be affirmed by the end of the year for the following year. The Board should normally hold at least 8 meetings a year. For consideration and a decision on a matter that cannot be postponed until the next scheduled Board meeting, an extraordinary Board meeting shall be held.
A Board meeting is convened by the chairman or, when the chairman is prevented, by the vice chairman. The chairman presides the meetings. The Board constitutes a forum when more than one-half of its members are present. The Board’s decision is the opinion supported by more than one-half of those present or, when votes are equal, the opinion shared by the chairman.
The chairman prepares the agenda jointly with the CEO. The agenda for a meeting is delivered to the Board Members approximately five days before the meeting along with the minutes of the previous meeting and all proposals concerning issues to be brought up at the meeting.
The secretary of the Board keeps minutes of the Board meetings. Minutes are signed and confirmed by the secretary and the chairman of the Board and a member elected as scrutinize the minutes.
If a Board meeting is held as a telephone or videoconference or in capsulam, the minutes shall be signed by every Board Member.
5. Preparation
The CEO shall ensure that the Board Members receive current information that is needed to evaluate the financial planning, liquidity and business development of the company.
Accordingly, the CEO shall ensure that the Board receives agreed reports about the development and operation of the company, including the development of sales, profit status and liquidity, as well as information about important events, e.g. important legal disputes, the cancellation of important agreements, the appearance of extensive liabilities or the insolvency of important clients. If necessary, the CEO should give reports directly to the chairman and Board members even in between the Board meetings.
6. Disqualification
A Board Member, CEO or a company employee is disqualified from taking part in the consideration of such a matter,
- Where the Member or his/her close relative or such a company, collective body or any other quarter, in whose bodies he/she acts, or where he/she has a significant holding or other interest, is a contractual party or counter-party of the company, or
- From which the Member expects such an essential benefit, which may be in conflict with the company’s interest.
A disqualified Board Member, CEO or employee may not take part in any discussion, presentation of draft resolution or voting concerning the matter at the Board meeting. However, a disqualified person may be heard in order to clarify the matter.
