Rules of procedures of the shareholders nomination’ board
Stockmann’s Annual General Meeting decided on 19 March 2015, to establish a shareholders’ Nomination Board in accordance with a proposal by the Board of Directors. The Nomination Board is responsible for preparing proposals concerning the appointment and remuneration of board members and for submitting the proposal to the following Annual General Meeting.
1. The purpose of the Nomination Board
The shareholders Nomination Board of Stockmann plc (hereinafter referred to as the “Company”) is a corporate body of the Company’s shareholders and responsible for preparing proposals and submitting them to the ordinary annual general meeting concerning the appointment and remuneration of the members of the Board of Directors. The primary task of the Nomination Board is to ensure that the Board of Directors and its members have sufficient expertise, competence and experience to meet the needs of the Company.
The Nomination Board shall adhere to the applicable legislation and other regulations, such as stock exchange regulations and the Corporate Governance Code for listed companies in Finland.
2. Appointment and composition of the Nomination Board
The Nomination Board shall include the representatives appointed by the four biggest shareholders as well as the Chairman of the Board of Directors, who shall serve as an expert member.
The four shareholders who, according to the Shareholder Register maintained by Euroclear Finland, have the largest share of the votes conferred by all Company shares on the first workday of the September preceding the Annual General Meeting are entitled to appoint the members who represent shareholders. The Chairman of the Board of Directors accordingly requests that the four largest shareholders, determined as specified above, each designate one member of the Nomination Board. If a shareholder does not wish to use its right to appoint a member, the right shall be transferred to the next largest shareholder who would otherwise not be entitled to appoint a member. If a shareholder who is, in accordance with the Securities Markets Act, liable to report specific changes in ownership (owner subject to the obligation to notify of major shareholdings) presents a written request concerning the matter to the Company’s Board of Directors no later than on the last workday of the August preceding the Annual General Meeting, any holdings of the said shareholder that have been recorded in numerous funds or registers shall be added up when calculating the shareholder’s total votes.
The Chairman of the Board of Directors shall call the Nomination Board to assemble, and the Nomination Board shall appoint a chairman from among its members. When the Nomination Board has been appointed, the Company shall publish its composition by a stock exchange release.
A member designated by a shareholder must resign from the Nomination Board if the shareholder in question disposes of over half of the shares it owned on the first workday of September and which entitled it to appoint the member, and is, therefore, no longer one of the ten largest Company shareholders. The Nomination Board may appoint a temporary new member to replace the member who resigned early, and, if the number of the members in the Nomination Board is reduced to fewer than three during a term of office, the Nomination Board must decide on appointing new members. The Nomination Board must offer any vacancies to those Company shareholders who have not appointed a member to the Nomination Board, in an order which corresponds to the percentage of shares they own. The preference order based on the votes conferred by shareholdings shall be determined in accordance with the shareholders’ ownership data in the Shareholder Register on the date the request to appoint a member was presented. The term of office of the Nomination Board’s members ends at the termination of the Annual General Meeting following the appointment of the member.
3. The duties of the Nomination Board
The Nomination Board is in charge of
1. preparing a proposal for the Annual General Meeting concerning the members of the Board of Directors;
2. preparing a proposal for the Annual General Meeting concerning the remuneration of the members of the Board of Directors;
3. finding successor candidates for the members of the Board of Directors; and
4. presenting proposals concerning the appointment and remuneration of the members of the Board of Directors to the Annual General Meeting.
The members of the Nomination Board does not receive separate remuneration for their membership in the Board. The members’ travel expenses shall be reimbursed in accordance with the Company’s regulations concerning travel.
The Nomination Board has a quorum if half of its members are in attendance. The Nomination Board is not entitled to make decisions unless all members have been offered the chance to participate in processing the matter and to attend the meeting.
The decisions of the Nomination Board must be unanimous. If the members cannot reach a unanimous decision, the members may submit their individual proposals to the general meeting or submit joint proposals together with other Board members.
All decisions made by the Nomination Board must be recorded in the minutes. The minutes must be dated, numbered and stored in a reliable fashion. The chairman and at least one other member of the Nomination Board must sign the minutes.
5. The duties of the Chairman of the Nomination Board
The Chairman of the Nomination Board must steer the work of the Nomination Board so that the Board effectively reaches its objectives and observes the expectations of the shareholders as well as the benefit of the Company.
The Chairman of the Nomination Board
a) shall convene the meetings of the Nomination Board, prepare the meeting agendas and materials and serve as the chairman of the meetings;
b) shall supervise that the intended meetings of the Nomination Board are held in accordance with the agreed schedule; and
c) shall convene special meetings to order as necessary and shall invariably convene a meeting to order within 14 days of a request submitted by a member of the Nomination Board.
6. Preparation of a proposal concerning the composition of the Board of Directors
The Nomination Board shall prepare a proposal concerning the composition of the Board of Directors for the company’s Annual General Meeting. Regardless of this, each company shareholder may submit a direct proposal to the Annual General Meeting in accordance with the Limited Liability Companies Act.
In preparing the proposal concerning the composition of the Board of Directors, the Nomination Board must observe the requirements imposed on the Company in the corporate governance code as well as the results of the annual assessment of the Board of Directors’ operations, which is to be completed in accordance with the corporate governance code. At a cost approved by the Company, the Nomination Board may also consult an external expert in order to find and assess suitable candidates.
7. Competence of the members of the Board of Directors
The Company’s Board of Directors must have sufficient expertise, competence and experience related to the Company’s line of business. The Board of Directors must specifically have sufficient collective competence
a) in matters pertaining to the Company’s line of business and its business operations;
b) in managing a business of a corresponding size;
c) in group and financial management;
d) in strategic solutions and corporate mergers and acquisitions;
e) in internal supervision and risk management; and
f) in the principles of good corporate governance.
8. Proposals to the ordinary Annual General Meeting
The Nomination Board must submit its proposals to the Board of Directors no later than on the last workday of the January preceding the Annual General Meeting.
The Board’s proposals are published as a stock exchange release and are included in the invitation to the Annual General Meeting. The Nomination Board shall also present and provide the grounds for its proposals and submit a report of its operations to the Annual General Meeting.
The members of the Nomination Board and the shareholders they represent must maintain the confidentiality of all information concerning the proposals presented to the ordinary Annual General Meeting until the Nomination Board has submitted its final proposals and the Company has published them.
The confidentiality obligation of the members of the Nomination Board and the shareholders they represent also covers any other confidential information disclosed to them during Nomination Board operations and shall remain valid until the Company has published the relevant information.
10. Changing the rules of procedure
The Nomination Board must annually review the content of these rules of procedures and submit any change proposals concerning, for example, the number of members in the Nomination Board or the appointment procedure to the Annual General Meeting for approval. The Nomination Board is authorised to make any necessary technical updates and changes to these rules of procedure.