Corporate Governance

CORPORATE GOVERNANCE STATEMENT (updated 29 April 2020)

Sievi Capital  is a listed company (Nasdaq Helslinki). The corporate governance of Sievi Capital complies with the Company’s Articles of Association, the Finnish Limited Liability Companies Act and other laws and regulations governing the Company. In addition, the Company complies with the Corporate Governance Code of Finnish listed companies issued by the Securities Market Association 1 Januaury 2020. The Corporate Governance Code of Finnish listed companies is available at the Securities Market Association’s website at www.cgfinland.fi/en/.

The Corporate Governance Statement of Sievi Capital plc is made according to the recommendations of the Corporate Governance Code of Finnish listed companies is published as a separate publication from the Report of the Board of Directors on Sievi Capital’s website and in the Annual Report.

GENERAL ANNUAL MEETING

The ultimate decision-making power lies with Sievi Capital’s general meetings of shareholders. The AGM makes decisions on matters addressed to it by the Limited Liability Companies Act and the Company’s Articles of Association. Key matters resolved by the AGM are adoption of the financial statements, discharging the board of directors and the CEO from liability, resolution on the profit shown on the balance sheet and election of the members of the Board of Directors and auditors and their respective remuneration.

The Company’s AGM is held annually by the end of June. An extraordinary general meeting of shareholders shall be held when deemed necessary by the Board of Directors, or when requested in writing by the auditor or by shareholders representing at least one-tenth of all issued and outstanding shares for purposes of dealing with a specific matter. Notice of a general meeting of shareholders shall be delivered to the shareholders no earlier than three (3) months and no later than three (3) weeks prior to the general meeting, and no later than nine (9) days prior to the record date of the general meeting of shareholders. The notice is delivered to the shareholders by a release published at the Company’s website or in a national newspaper designated by the Board of Directors, or by sending the notice by mail to the addresses marked in the Company’s shareholder register.

Sievi Capital plc’s AGM was held on 29 April 2020 and it resolved matters designated to the AGM.

BOARD OF DIRECTORS

The task of the Board of Directors is to see to the governance of the Company and ensure the appropriate organization of the Company’s operations in accordance with the Finnish Limited Liability Companies Act.

According to Sievi Capital’s Articles of Association, the Board of Directors consists of a minimum of three and a maximum of seven ordinary members. The Board members are elected by shareholders in the Annual General Meeting. The proposal for the composition of the Board of Directors to the Annual General Meeting has in recent years been prepared by a significant shareholder which represents over 50% of company’s shares and votes. As part of the preparation process the COB participates in discussions with largest shareholders in order to take into consideration different views and company situation in the composition of the Board. The Board elects a Chairman from among its members.

Tasks of the Board

The Board of Directors annually approves its rules of procedure, which define the Board’s key tasks, operating principles and meeting practices, as well as an annual self-assessment of the Board’s activities.

The key tasks of the Board include:

  • to confirm the strategy and supervise its implementation;
  • to confirm Company values and policies;
  • to confirm annual key business targets and monitor the group’s result development;
  • to decide on making new investments and divestments;
  • to review and approve financial statements and other financial reports;
  • to appoint and dismiss the CEO;
  • to decide on the incentive systems of the management and other personnel of the Company;
  • to monitor the Company’s key business risks, risk management and internal control management systems and confirm the policies and guidance related to them;
  • to take care of the compulsory duties of Audit Committee;  and
  • to prepare proposals to target company shareholders’ concerning the election of the members of the Board of Directors in target companies.

Tasks related to the Board’s financial reporting, internal control and risk management include for example:

  • to monitor the Company’s financing and financial position, and the financial statement reporting process;
  • to monitor the financial reporting process;
  • to monitor significant strategic and operational risks, and the actions of the management of the Company to follow, manage and report the risks;
  • to monitor the transactions of the Company’s management and their related parties and any possible conflicts of interest related to them;
  • to review Corporate Governance Statement
  • to prepare a proposal to the Annual General Meeting for the decision concerning the election of an auditor; and to assess the independence of the auditor.

The Board of Directors is responsible for the following tasks which are on the Remuneration Committee’s responsibility according to the Corporate Governance Code of Finnish listed companies:

  • to decide the remuneration and other benefits of the CEO and other management;
  • to formulate and implement the process of finding successors for the CEO and other management; and
  • to develop and evaluate the compensation systems and estimate the adaption to their purposes

In the Annual General Meeting held on 29 April 2020 the following persons were re-elected as members of the Board of Directors: Kati Kivimäki, Asa-Matti Lyytinen, Tuomo Lähdesmäki, Taru Narvanmaa and Klaus Renvall.

According to the evaluation of independence of the Corporate Governance Code of Finnish listed companies completed by the Board, all members are independent of the Company and significant shareholders.

The company deems important its Board Members have diverse backgrounds however taking into account the members have the competencies that are essential for company business. The aim is that the Board members have versatile professional backgrounds, experience, know-how and that the Board consists of representatives of both genders so that the diversity of the Board supports company’s business and future in a best possible way.  The object of diversity is to ensure for example a wide scope of views, enhancing open discussion, and enabling support for and challenging of the Company’s management.

Committees

Board committees have not been established in Sievi Capital. The Board of Directors is responsible for the fulfillment of the Audit Committee’s tasks. According to the view of the Board of Directors, operation of the Board without committees is best suited to the current needs of the Company’s business and supports the fulfillment of the responsibilities of the Company’s Board according to law and the Corporate Governance Code of Finnish listed companies.

Board meetings

In 2019 the Board held 21 meetings. The participation percentage in meetings of the Board members in 2019 was 99%.

Board members and their shareholdings

Name Personal data Shareholding in Sievi Capital plc and companies belonging to the same group 31 December 2019 (direct ownerships and ownerships through entities controlled by the Board member)
Tuomo Lähdesmäki Chairman of the Board since 10 April 2019
Year of birth: 1957
Education: M.Sc. (Engin.), MBA
Main occupation: Board professional
Independent of the Company and significant shareholders

0

Kati Kivimäki Member of the Board since 10 April 2019
Year of birth: 1973
Education: BBA, MBA
Main occupation: Managing Director,  Mall of Tripla
Independent of the Company and significant shareholders
 

0

 

 

Asa-Matti Lyytinen Member of the Board since 2000
Year of birth: 1950
Education: M.Sc. (Econ.)
Main occupation: Board professional
Independent of the Company and significant shareholders

0

Taru Narvanmaa Member of the Board since 10 April 2019
Year of birth: 1963
Education: M.Sc. (Econ.)
Main occupation: Board professional
Independent of the Company and significant shareholders
0
Klaus Renvall Member of the Board since 2017
Year of birth: 1951
Education: M.Sc. (Econ.)
Main occupation: FNZ-Group Ltd, Managing Director, Nordics
Independent of the Company and significant shareholders
0

CHIEF EXECUTIVE OFFICER AND OTHER MANAGEMENT

CEO

The Company’s Board of Directors appoints the CEO and decides on the terms of her/his service contract and remuneration. The CEO manages and supervises the company’s business operations according to the Finnish Companies Act and in compliance with the instructions and authorisations issued by the Board.  Päivi Marttila acts as the Company’s CEO.

Other management

The Company’s other management includes the CFO who is responsible for the financial reporting process and supports the CEO in the management of the Company’s business operations.

Information on CEO and other management and their shareholdings

Name Duty Personal data Shareholding in Sievi Capital plc and companies belonging to the same group 31 December 2019 (direct ownerships and ownerships through entities controlled by the Executive)
Päivi Marttila
CEO Year of birth: 1961
Education: M.Sc. (Econ.)

0

Markus Peura CFO Year of birth: 1983
Education: M.Sc. (Econ.) , CFA

0


RISK MANAGEMENT, INTERNAL CONTROL AND AUDIT

Risk Management

Risk management at Sievi Capital is based on a risk management policy approved by the Board of Directors which targets a comprehensive and proactive management of risks. The Company strives to detect and identify the factors which might have injurious effect on achieving the targets of the Company either in short or long-term time frame, as well as initiate necessary actions to control this kind of factors.  Risk management of  target company level plays a significant role in risk management and is mainly organized by the portfolio companies.  Sievi Capital strives to improve the risk management of its portfolio by active corporate governance and contribution to the operation of Board of Directors of the target companies. Sievi Capital assesses the most relevant risks at the target company level and enhances the implementation of risk management in target companies.

Sievi Capital is an investment company.  The Board of Directors of Sievi Capital confirms the Company’s strategy and business plan in which among other things targets for new investments and exits are defined. The Board makes the investment decisions concerning new private equity investments and oversees the implementation of the investment activities. Due to the Company’s investment strategy and the nature of investments a significant part of Sievi Capital’s most relevant risks are related to the Company’s target companies.

INTERNAL CONTROL AND AUDIT

Internal control at Sievi Capital is an ongoing process to secure the profitability of the business and it’s continuity. The objective of monitoring is to minimize risks by securing that reporting is reliable and that laws and regulations are being followed.

Considering the structure and scope of the Company’s business, setting up a separate internal audit organisation has not been considered applicable. The Company’s management is responsible for the internal control system. Internal control is an active part of the Company’s management and governance.

The basis of financial monitoring is formed by the controls included in operational processes, which enable fast anomaly detection and reaction. A material part of the financial monitoring is monthly reporting by management. The metrics followed in the monthly reporting have been set so that they support the Company in reaching targets and raise issues that require controlling actions. Due to the nature of the business, budgeting in its traditional form is not used in the parent company.  The interpretation and appliance of the accounting standards is managed by the corporate financial administration.

INSIDER MANAGEMENT

Sievi Capital complies with the applicable EU Market Abuse Regulation (596/2014, ”MAR”) valid since 3.7.2016, and the insider guidelines of Nasdaq Helsinki Ltd. In addition, Sievi Capital has its own internal Insider Policy.

Sievi Capital has decided not to maintain public insiders or permanent company-specific insider register, but only project-based insider lists. Project specific lists will be established and maintained for each project constituting inside information, based on a the insider guidelines of Nasdaq Helsinki and Company’s own internal guidelines.

Sievi Capital maintains an internal, non-public list on managers and persons closely associated with them. Sievi Capital has determined the members of the Board of Directors, CEO and CFO as managers defined in the Market Abuse Ragulation (MAR).  Each manager and persons associated with them are obliged to disclose all transactions made with financial instruments issued by Sievi Capital. These transactions are published with a regulatory release. The total shareholding of each Manager is annually published as part of the Corporate Governance Statement according to the Corporate Governance Code of Finnish listed companies.

Sievi Capital’s above-mentioned executives, personnel, and any other persons involved in the preparation, compilation and publication of the Company’s financial reports shall not conduct the transactions related to Sievi Capital’s financial instruments within 30 calendar days prior to the company’s financial statements.

PRINCIPLES REGARDING RELATED PARTY TRANSACTIONS

Sievi Capital evaluates and monitors the transactions  with its related parties and maintains a list of its related parties. The company does not customarily enter into transactions with its related parties which would be significant for the company and deviating from the ordinary course of business or would be conducted in deviation from customary market terms.  The Company did not enter this kind of transactions during 2019.  The Board of Directors confirms the related party transactions regarding possible deviations from the ordinary course of business or customary market terms.

AUDITOR

The articles of association state that Sievi Capital plc shall have one auditing firm as its statutory auditor with an  Authorised Public Accountant as a responsible auditor. The Auditor is elected for a single term, which terminates at the end of the Annual General Meeting following the election.

Company’s current auditor is KPMG Oy Ab, with Esa Kailiala, APA, as the responsible auditor.

In 2019, the audit fees paid to the auditor amounted to 33,135 euros and the fees related to other non-audit related services totalled 4,318 euros.

 

Ⓒ2020 Sievi Capital Oyj