Cramo issues Corporate Governance and Remuneration Statements, which are available on the Group’s website along
with more detailed information about corporate governance and remuneration.
www.cramogroup.com > Governance
Cramo prepares annual financial statements and interim reports conforming to Finnish law and to the Internal Financial Reporting Standards (IFRS), which are published in Finnish and English.
BOARD OF DIRECTORS
The roles and responsibilities of Cramo's Board of Directors have been defined in the Charter of the Board and in the Group's Operating Principles. If necessary, the Board’s charter is revised and modified annually in conjunction with the first meeting of the Board after the election of its members at the Annual General Meeting.
board of directors composition in 2016
At the Annual General Meeting 2016, the following people were re-elected to the Board of Directors: Ms Helene Biström, Mr Peter Nilsson, Mr Erkki Stenberg, Mr Joakim Rubin, Ms Caroline Sundewall and Mr Raimo Seppänen. Mr Perttu Louhiluoto was elected as a new Board member. The Board’s convening meeting elected Ms Biström as Chairman of the Board and Mr Stenberg as Deputy Chairman of the Board. Member attendance at the meetings is shown below, and member independence is presented here.
WORK OF THE BOARD IN 2016
The Board of Directors convenes according to predetermined schedule and additionally when considered necessary. In 2016, the Board held eleven meetings of which three were telephone meetings. Two permanent committees, the Audit Committee and the Remuneration Committee, assist the Board. The Board elects the committee members and appoints the committee chairmen. The Board confirms the central duties and operating principles of both committees in a written charter.
The Audit Committee assists the Board in its supervisory responsibilities in line with the Finnish Corporate Governance Code. At its constitutive meeting on 31 March 2016, Mr Joakim Rubin was appointed Chairman of the Audit Committee, and Mr Erkki Stenberg and Ms Caroline Sundewall were elected as members. The Audit Committee held eight meetings of which two were telephone meetings.
The Remuneration Committee is tasked with preparing a proposal to the Board for the President and CEO’s appointment and his/her employment terms and preparing matters pertaining to the Company's compensation issues for the Board's approval.
At its constitutive meeting on 31 March 2016, Ms Helene Biström was appointed Chairman of the Remuneration Committee and Mr Raimo Seppänen and Mr Peter Nilsson were elected as members. The Remuneration Committee met four times.
SHAREHOLDERS’ NOMINATION COMMITTEE
The Shareholders’ Nomination Committee, established by the General Meeting of Shareholders, prepares annually proposals to the Annual General Meeting for the election and remuneration of the members of the Board of Directors. The Nomination Committee consists of maximum four members, of which maximum three represent the Company’s largest shareholders who, on the last business day of August preceding the next Annual General Meeting, hold the largest number of votes calculated of all shares in the Company.
The following people were appointed on 16 November 2016 as members of Nomination Committee: Mr Mikael Moll, Mr Ari Autio, Mr Esko Torsti and Ms Helene Biström. Mr Moll was elected as the Chairman of the Nomination Committee, which held two meetings.
PRESIDENT AND CEO
The Managing Director, who also acts as the President and CEO, is in charge of the Company’s day-to-day management in accordance with the Finnish Companies Act and related legislation, instructions and orders given by the Board.
REMUNERATION FOR BOARD SERVICES
In 2016 the General Meeting approved the following annual remuneration for Board services:
- Chairman of the Board EUR 70,000
- Deputy Chairman of the Board EUR 40,000
- Other Board members EUR 35,000
50% of the annual remuneration is paid in Cramo Plc shares, purchased in the market on behalf of the Board members, and 50% is paid in cash. The remuneration may also be paid by transferring the Company’s own shares. In the event a purchase of shares cannot be carried out for reasons related either to the Company or a Board member, the annual remuneration shall be paid entirely in cash. In addition, the remuneration for each Committee meeting was EUR 1,000 and annual remuneration for the Chairman of Audit Committee was EUR 5,000. Reasonable travel expenses were reimbursed as per invoice.
The Board members are not covered by the Company’s long-term incentive schemes, bonus scheme or pension schemes. No shares or share-related rights were granted to Board members as remuneration during the financial period, except those specified above.
Remuneration is part of Cramo’s management system. The aim of well-designed remuneration scheme is to attract and engage talented employees to the company and to promote the company’s financial success.
The company applies a competitive policy on salaries. In addition to fixed salaries, Cramo offers short- and long-term incentive schemes for management and its key personnel. Moreover, operating companies have local short-term incentive schemes.
INTERNAL CONTROL AND RISK MANAGEMENT REGARDING FINANCIAL REPORTING
Internal control over financial reporting is part of the overall internal control system at Cramo. The Enterprise Risk Management (ERM) framework, tailored to Cramo Group’s business needs, provides the overall framework for the Group’s internal control and risk management. Internal control over financial reporting strives to provide reasonable assurance that the Group’s financial reporting is reliable and that external financial reporting is prepared in accordance with legislation, International Financial Reporting Standards (IFRS) and other requirements set for listed companies.
ROLES AND RESPONSIBILITIES
The Board has the ultimate responsibility for the appropriate arrangement of internal control over financial reporting. The Board supervises and approves annual financial statements and interim reports. The Audit Committee assists the Board of Directors in overseeing the effectiveness of established internal control and risk management principles. In practice, the President and CEO and OpCo (Operating Country) managers are in charge of performing internal control activities for financial reporting. They are supported in this task by the CFO, the Group Finance and Development function and OpCo financial management.
RISK ASSESSMENT, CONTROL AND MONITORING
Cramo has established objectives for reliable financial reporting in order to identify financial reporting risks. Within the risk assessment process, Cramo identifies and analyses risks in achieving financial reporting objectives as a basis for determining how those risks should be managed and mitigated. The risks identified are managed through control activities which are set throughout the organisation, at all levels and in all functions.
In order to ensure the effectiveness of internal control regarding financial reporting, monitoring is conducted by the Board, the Audit Committee, the President and CEO, the CFO and the Group Finance and Development function, Internal Audit, the Group management team and OpCo managers and controllers.
RELATED PARTY TRANSACTIONS
Cramo’s related parties include the Board of Directors, Group management team, their close family members, entities under the control or significant influence of the persons belonging to related parties, subsidiaries and joint ventures. Transactions between the Company and related parties are allowed, provided that they promote the objectives of the Company and are conducted on acceptable terms and in the interests of the Company from the company’s business perspective as well as in compliance with regulations in effect.
Cramo manages inside information and insiders in accordance with the requirements of the Market Abuse Regulation (MAR), the Insider Guidelines of Nasdaq Helsinki Ltd. and Cramo’s Insider Guidelines approved by the Board of Directors. The Insider Guidelines of Cramo include instructions and definitions regarding inside information, trading by insiders, managers’ transactions and a list of persons in managerial positions. Coordination and control of insider affairs are included in the responsibilities of the CFO.
The Company has a minimum of one and a maximum of two authorised public accountants (APA) or firms of authorised public accountants, chartered by the Central Chamber of Commerce of Finland. Their term of office expires at the end of the Annual General Meeting following their election. If the AGM elects only one auditor, which is not a firm of authorised public accountants chartered by the Central Chamber of Commerce, it must elect one deputy auditor.
At the Annual General Meeting on 31 March 2016 the firm of authorised public accountants KPMG Oy Ab was appointed as Cramo Plc’s auditor for the term ending at the end of the next Annual General Meeting, with APA Mr Toni Aaltonen as the responsible auditor. Both Mr Aaltonen and KPMG Oy Ab have served as auditors of the company since 2014.