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Nomination Board

A position paper issued by the Finnish Cabinet Committee on Economic Policy in February 2004 stressed that general meetings of shareholders of publicly listed State-owned companies and companies partly owned by the State should appoint a committee to prepare a proposal covering the composition of the board of directors for the following general meeting of shareholders to vote on. The paper indicated that these AGM nomination committees should generally select representatives from a company’s largest shareholders and propose an expert member as chairman.

The position paper is based on the belief that a company’s board of directors should enjoy the trust of its owners and that it should act in the interests of shareholders, and that the preparations for its election should lie in the hands of its owners. This, the paper indicates, will strengthen the potential of owners to make their voice heard as effectively and as openly as possible.

The paper suggests that a nomination committee appointed by a board of directors itself, in line with the Governance Code covering listed companies in Finland, is best suited to companies with a diverse ownership base. In the case of companies owned in full or in part by the State, with large owners that are both well-known to the public and active, the approach recommended under the Governance Code is not to be recommended because of the nature of the ownership involved and the responsibility associated with this type of major holding.

As a listed State-owned company, Neste Oil observes the recommendation contained in the above position paper in respect of its Nomination Committee. Since 2011, Neste Oil has named the Nomination Committee, in accordance with the new Corporate Governance Code 2010, as the AGM Nomination Board to distinguish it from the Nomination Committee comprising members of the Board of Directors.

Annual General Meetings are responsible for establishing a Nomination Board, selecting its members, and deciding its duties. Representatives of the Company’s three largest shareholders are normally elected as members, together with the Chairman of the Board of Directors as an expert member. The right to appoint the shareholder representatives on this Nomination Board normally lies with the three shareholders holding the largest number of votes associated with all the Company’s shares on 1 November preceding the AGM. In the event that a shareholder does not wish to exercise his right to appoint a representative, this right shall pass to the next-largest shareholder. The Company’s largest shareholders shall be determined on the basis of the information on holdings registered in the book-entry system, with the proviso that the holdings of a shareholder required under securities legislation to flag certain changes in his holdings, and with shares spread across a number of funds, for example, shall be combined if the shareholder informs the Company of his wishes to this effect in writing.

The Chairman of the Nomination Board generally convenes the Nomination Board, while the Board elects its Chairman from among its members. The Nomination Board is required to present its proposal to the Board of Directors by 1 February prior to the AGM at the latest.

Activities

The Nomination Board drafts proposals for the following AGM on the following:

  • the number of members of the Board of Directors
  • the members of the Board of Directors, and
  • the remuneration to be paid to the Chairman, Vice Chairman, and the members of the Board of Directors.


Composition of the Nomination Committee prior to the 2011 AGM

The AGM Nomination Committee responsible for preparing the 2011 AGM comprised Pekka Timonen, Director General, Prime Minister’s Office, Timo Ritakallio, Deputy CEO, Ilmarinen Mutual Pension Insurance Company, and Mika Kivimäki, Managing Director, OP-Pohjola Group. Timo Peltola, Chairman of Neste Oil’s Board of Directors acted as the Committee’s expert member. The Committee convened twice and presented its proposal covering the members of the Board of Directors and the remuneration to be paid to them on 1 February 2011.

Composition of the Nomination Board prior to the 2012 AGM

Following a proposal by the Prime Minister’s Office, representing the Finnish State, the AGM decided on 14 April 2011 to establish an AGM Nomination Board to prepare proposals covering the members of the Board of Directors and their remuneration for consideration by the next AGM.

The AGM Nomination Board responsible for preparing the 2012 AGM comprised Pekka Timonen, Director General, Prime Minister’s Office, Timo Ritakallio, Deputy CEO, Ilmarinen Mutual Pension Insurance Company, and Mikko Koivusalo, Director, Investments, Varma Mutual Pension Insurance Company. Timo Peltola, Chairman of Neste Oil’s Board of Directors, acted as the Nomination Board’s expert member.

The Nomination Board convened twice and presented its proposal covering the members of the Board of Directors and the remuneration to be paid to them on 1 February 2012.

CVs of Nomination Board members:

Pekka Timonen

Ph.D. (Laws). Chairman of the Nomination Board.
Born 1960. Director General of the Ownership Steering Department at the Prime Minister's Office. Member of the Board of Finnair Oyj.

Timo Ritakallio

M.Sc. (Laws). Member of the Nomination Board.
Born 1962. Deputy CEO, Ilmarinen Mutual Pension Insurance Company. Member of the Boards of Outotec Oyj and Technopolis Oyj. Member of the Nomination Boards of Suominen Oyj, Uponor Oyj and Tikkurila Oyj, Kemira Oyj, VVO-Yhtymä Oyj, Oriola-KD Oyj, Ekokem Oy, Sponda Plc, Rautaruukki Oyj, and Orion Oyj.

Mikko Koivusalo

M.Sc. (Econ.). Member of the Nomination Board.
Born 1961. Director, Investments, Varma Mutual Pension Insurance Company. Member of the Boards of Tornator Oy and Realia Group Oy:n.