Corporate Governance

 

General

In addition to acts and regulations applicable to listed companies, eQ Plc complies with the Finnish Corporate Governance Code 2020 published by the Securities Market Association that entered into force 1 January 2020. The entire Code is available on the website of the Securities Market Association at www.cgfinland.fi.

General Meeting of Shareholders

The General Meeting is eQ Plc’s highest decision-making body, at which the shareholders participate in the supervision and control of the company. eQ Plc convenes one Annual General Meeting (AGM) during each financial period. An Extraordinary General Meeting may be convened when necessary. Shareholders exercise their right to vote and voice their views at the General Meeting.

eQ Plc provides shareholders with sufficient information about the agenda of the General Meeting in advance. The advance information is provided in the notice of the General Meeting, other releases and on the company website. The General Meeting is organised in such a way that shareholders can effectively exercise their ownership rights. The goal is that the CEO, Chair of the Board, and a sufficient number of directors attend the General Meeting. A person proposed as director for the first time shall participate in the General Meeting that decides on his or her election, unless there are well-founded reasons for the absence.

Board of Directors

Composition of the Board

The General Meeting elects the directors. The director candidates put forward to the Board shall be mentioned in the notice of the General Meeting, if the candidate is supported by shareholders holding at least 10 per cent of the total votes carried by all the shares of the company, provided that the candidate has given his or her consent to the election. The candidates proposed after the delivery of the notice of the meeting will be disclosed separately. In its Corporate Governance Statement, the company states the number of Board meetings held during the financial period as well as the average attendance of the directors. The directors are elected for one year at a time.

The company’s Articles of Association do not contain any provisions on the manner of proposing prospective directors. eQ Plc’s major shareholders, who as a rule represent at least one half of the number of shares and votes in the company, make a proposal on the number of directors, the di-rectors and their remuneration to the AGM.

A person elected as director must have the qualifications required by the work of a director and sufficient time for taking care of the duties. The company facilitates the work of the Board by providing the directors with sufficient information on the company's operations. eQ Plc's Board of Directors consists of 5 to 7 members. The Board of Directors elects the Chair from among its members. eQ Plc’s Board has a full-time Chair and in addition to his duties as the Chair of the Board of Directors, his duties include e.g. developing eQ’s strategy together with the CEO. It is eQ Plc's AGM solely that ultimately elects the directors and makes preparations for their election.

The company reports the following biographical details and holdings of the directors: name, gender, year of birth, education, main occupation, primary work experience, international experience, date of inception of Board membership, key positions of trust, and shareholdings in the company. In addition, eQ reports the directors’ independence of the company or its major shareholders together with the reasoning for determining that a board member is not independent.

The members of eQ’s Board of Directors shall provide the Board and the company with sufficient information for the evaluation of their qualifications and independence and notify of any changes in such information.

Operations of the Board of Directors

eQ Plc’s Board of Directors has drawn up a written charter covering its operations. Below is a list of the most important principles and duties presented in the charter. In order to carry out its duties, the Board of Directors:

  • confirms the company values and manners of operating and monitors their implementation
  • confirms the company’s basic strategy and continuously monitors that it is up-to-date
  • based on the strategy, approves the annual plan of operation and budget and supervises their outcome
  • reviews and approves the interim reports, report by the Board of Directors and financial statements
  • defines the company’s dividend policy and makes a proposal on dividend distribution to the AGM
  • convenes General Meetings
  • makes proposals to the General Meeting, when necessary
  • decides on major investments, corporate acquisitions and divestments and on investments that exceed two million euros
  • confirms the organisation structure
  • appoints and dismisses the CEO
  • sets personal targets for the CEO annually and assesses their outcome
  • appoints and dismisses the members of the Management Team, defines their areas of responsibility, and decides on the terms of their employment
  • appoints and dismisses the members of the Management Team, defines their areas of responsibility, and decides on the terms of their employment
  • decides on so called unconventional related party transactions that are not conducted in the ordinary course of eQ’s operation and which are not made on ordinary commercial terms
  • monitors and assesses related party transactions at least once a year
  • reviews the Remuneration Policy for Governing Bodies of eQ at least once a year and presents the policy to the General Meeting of the company for consideration at least every four years
  • reviews eQ Group’s remuneration principles at least once a year
  • decides on the incentive schemes and annual bonuses of the CEO and the personnel
  • goes through the major risks related to the company's operations and their management at least once a year and gives instructions on them to the CEO, when necessary
  • meets the auditors at least once a year
  • convenes at least once a year without the executive management
  • assesses its own operations at least once a year
  • confirms its own charter, which is reviewed annually
  • handles other matters that the Chair of the Board or the CEO has proposed to the agenda of a Board meeting, the directors also have the right to put matters on the Board agenda by informing the Chair of this.

Principles on the diversity of the Board of Directors

The Board’s aim is to promote, for its part, the diversity of the Board's composition. When assessing diversity, the Board takes into consideration, for instance, the age and gender of the directors, their education and professional experience, personal qualities and experience that is essential with regard to the task and the company operations. Regarding the equal representation of genders on the Board, eQ Plc has defined as its goal that there should always be representatives of both genders on eQ Plc’s Board of Directors. The Board aims at reaching this goal and maintaining it primarily by informing eQ Plc's owners actively about it. The directors are elected by eQ Plc’s AGM.

CEO and his duties

The CEO is in charge of the day-to-day administration of the company in accordance with the rules and regulations of the Finnish Limited Liability Companies Act and instructions and orders issued by the Board of Directors. The CEO may take measures that, considering the scope and nature of the operations of the company, are unusual or extensive with the authorisation of the Board. The CEO ensures that the accounting practices of the company comply with the law and that finances are organised in a reliable manner. eQ Plc’s Board of Directors appoints the CEO.

The company discloses the same biographical details and information on the holdings of the CEO as of the directors. eQ Plc does not have substitute for the CEO.

Other Management Team members

eQ Group has a Management Team that convenes regularly. The status of the Management Team is not based on company law, but in practice it has a significant role in the organisation of the company management. The Management Team consists of the persons heading the company’s operative business, the CFO and Group General Counsel. The main duty of the Management Team is to assist the CEO.

Principles concerning related party transactions

eQ’s Group Administration is responsible for managing related party matters at Group level and for maintaining the related party register, in accordance with principles on the management of related party matters approved by eQ Plc’s Board of Directors. The management of each company that is a member of the Group is responsible for ensuring that any related party transactions at the Group are made in accordance with the approved principles. At eQ Group, all business transactions within the Group and related party transactions are always made on arm’s-length terms and as part of the company’s normal business operations. Group companies can offer their services to related party individuals or organisations under their control or influence on market terms, and ordinary assignments are implemented in the ordinary course of business of the company. Related party transactions are allowed, provided that they promote the purpose and interest of the company and are commercially justified. 

The Board of Directors regularly monitors and evaluates transactions between eQ Plc and the company’s related parties, and assesses how contracts and other legal transactions made between the company and its related parties meet the requirements on the ordinary course of business and arm’s-length terms. Primarily, all related parties are personally responsible for ensuring that eQ is informed of any related party transactions they make. eQ also monitors related party transactions on a business segment basis, and eQ Plc’s CFO is responsible for reporting related party transactions to the Board of Directors annually. Related party transactions that are not conducted in the ordinary course of eQ’s operation and which are not made on ordinary commercial terms are “unconventional business transactions”. Only eQ Plc’s Board of Directors can make decisions on implementation of unconventional business transactions. The Board of eQ Group’s parent company always decides on all related party loans to related parties or entities outside the eQ Group.

eQ complies with the obligations of the Finnish Corporate Governance Code 2020 for listed companies and the IFRS standards (IAS 24) on related party disclosures. As required by the standard, eQ discloses, in the consolidated financial statements or separate financial statements, the related party relationships and transactions and outstanding balances of the parent company or an investor with joint control or significant control over the investment target with related parties, which are presented in accordance with the IFRS. eQ also discloses in the company’s annual report information to be presented on the basis of the Finnish Limited Liability Companies Act, concerning loans, liabilities and commitments to related parties and the main terms thereof, if the business transactions are material and implemented on unconventional terms.

eQ Plc publishes, by a stock release, related party transactions that are significant for the company’s shareholders.

Central procedures of insider administration

In its insider administration, eQ Plc complies with the applicable Finnish and EU legislation (including the Market Abuse Regulation 596/2014), rules and regulations issued by the Finnish Financial Supervisory Authority as well as the Guidelines for Insiders issued by the Helsinki Stock Exchange (insider regulations). eQ Plc has drawn up guidelines on insider issues and trading. The company has informed the company management, insiders and persons covered by the trading restriction of the insider guidelines.

Managers and persons closely associated with them are obliged to inform the company and the Financial Supervisory Authority of their trading in company shares or other financial instruments. The company discloses the information that it has received without delay with a stock exchange release. At eQ, such managers (covered by the disclosure obligation) are the CEO and directors as well at the members of the Management Team appointed by the Board. eQ maintains a list of managers and persons closely associated with them. This list is not an insider list.

The company maintains insider lists required by insider regulations of persons who have access to inside information. These lists are not public. The information on eQ Plc’s managers required by regulations and the insider lists are maintained by Euroclear Finland Ltd. The information in the insider lists is available to the Financial Supervisory Authority for the supervision of the securities market.

eQ’s permanent insiders are only persons who, due to their tasks or position, have permanent access to all inside information in the listed company and who have the right to make decisions on the company’s future development and the arrangement of business. eQ’s permanent insiders comprise the directors, CEO and the members of the Group's Management Team appointed by the Board of Directors. In addition to insider lists, eQ maintains a list of persons covered by the so-called extended trading restriction. These persons participate in the preparation and drawing-up of eQ's interim reports and financial statements releases or are otherwise part of the company's so-called information core (e.g. persons responsible for business operations, the personnel of financial administration, risk management, legal and compliance functions as well as the IT function, and the executive assistant). Persons who are eQ Plc's permanent insiders may not trade in eQ Plc's financial instruments during a closed period or an insider project on their account or for the account of a third party, directly or indirectly. eQ's closed period commences thirty days prior to the publication of an interim report (first, second and third quarter) or the financial statements release and ends the day following the publication day. Persons who are entered in a project-specific insider list may not trade in eQ Plc's financial instruments during the project on their account or for the account of a third party, directly or indirectly. "Persons covered by the extended trading restriction" are not allowed to trade during the closed period. The restriction on trading is applied to insiders, those under their guardianship and the organisations over which they exercise control. It is forbidden to circumvent the trading restriction by trading on one's own behalf in the name of a person not covered by the trading restriction.

eQ Plc’s closed period commences 30 days prior to the disclosure of an interim report (first and third quarter), half-yearly report or financial statements report and ends at the end of the day of the disclosure.

The company has informed the company management, insiders and persons covered by the extended trading restriction of the insider guidelines. The company has a designated person in charge of insider issues (Compliance Officer), who carries out tasks related to the management of insider issues, training in insider matters, maintenance of the insider lists and the supervision of trading. The knowledge of other employees about insider matters is maintained and their need of training assessed continuously. 

Updated May 05.2022