Governance

Operations of the Board

According to DNA’s Articles of Association, the Board of Directors is composed of five to nine ordinary members elected by the General Meeting. The Board of Directors’ proposal for the Annual General Meeting regarding Board members is prepared by the Shareholders’ Nomination Committee. When members are elected to the Board of Directors, the requirements laid down by the company's operations and development phase and valid legislation, such as the rules of Nasdaq Helsinki Ltd, other applicable rules, and the recommendations of the governance code must be considered. A person elected to the Board of Directors must have the competence required for the position and be able to use a sufficient amount of time to attend to Board duties. The Board of Directors must include representatives of both genders, and its composition must satisfy the principles of diversity.

The term of office of a Board member begins immediately at the end of the Annual General Meeting and ends at the end of the first Annual General Meeting following the election. If a membership becomes available in the middle of the term of office, a new member is elected, if necessary, for the remainder of the term at a General Meeting.

The Board of Directors meets regularly approximately once per month, and as and when deemed necessary. A memo is written for each meeting. The Chairman of the Board of Directors calls the Board of Directors and is responsible for Board work. Each member of the Board of Directors has the right to propose matters to the Board’s agenda. The Board of Directors of the Company is quorate when more than one-half of its members are present. Decisions of the Board of Directors are majority decisions, and in the event of a tie, the vote shall be decided by the casting vote of the Chairman of the Board. If there is a tie in an election of a person, the election shall be decided by drawing lots. As stipulated by law, a member of the Board of Directors shall be disqualified from the consideration of a matter that involves a conflict of interest.

Independence of directors

According to the Finnish Corporate Governance Code, the majority of the directors shall be independent of the company. In addition, at least two of the directors representing this majority shall be independent of the company’s significant shareholders.

The Board of Directors evaluates the independence of its members. The members of the Board of Directors confirm in writing the information required for evaluating their independence at the annual constitutive meeting of the Board of Directors, and commit themselves to informing the company, without delay, of any changes taking place during the term of office.

Diversity of the Board of Directors

Competent and efficient Board work requires that the members of the Board of Directors are highly competent and sufficiently diverse. The Shareholders’ Nomination Committee also considers the composition of the Board from the perspective of diversity.

With regard to the composition of the Board of Directors, it is essential that the members of the Board have diverse and complementary competence, education and experience in different industries and sectors, management and businesses of different development phases. The members’ personal qualities are also important. Experience in strategically important consumer and corporate markets, experience in the digital operating environment, customer understanding and a diverse age structure also contribute to the diversity of the Board of Directors. Both genders shall be represented in the Board.

The composition of the Board of Directors must be such that it enables the enhancement of the company’s present and future business. DNA reports on the diversity of the Board of Directors in its Corporate Governance Statement.

Duties of the Board

The Board of Director has a duty to promote the interests of the company and all its shareholders. The Board of Directors discusses and decides on matters that are significant to the Group's finances, business or principles.

According to its charter and the Limited Liability Companies Act, the Board has the following duties:

• Seeing to the administration of the company and the appropriate organization of its operations (general competence);
• Arranging the control of the company accounts and asset management in an appropriate manner;
• Electing the chairman from among its members for each term of office;
• Appointing and dismissing the CEO;
• Appointing the deputy CEO and members of the company’s Executive Team based on the CEO’s proposal;
• Deciding on the salaries and compensation of the above-mentioned persons and their incentive scheme;
• Deciding on the strategy of the company and its business units;
• Controlling the implementation of the strategic objectives and business plans of the company and its business units;
• Deciding on strategically or financially significant investments as part of the annual company budget, business acquisitions and divestments, business transactions and contingent liabilities − any significant investments outside the annual budget are to be confirmed separately;
• Confirming the company’s values and other general Group principles by means of operating instructions;
• Confirming the company’s personnel strategy and annual personnel and training plans; deciding on the personnel incentive and reward scheme; and
• Seeing to internal control, risk management and internal audit.

Board Committees

The Board of Directors may establish Board committees from among its members to support its work. The Board shall confirm the main duties and operating principles of the committees in a written charter, and the company shall report their key content. Committees report regularly to the Board.

The Board of Directors elects the Audit and Compensation Committee and, whenever necessary, other committees at its annual constitutive meeting that takes place after the AGM. The Board of Directors elects the committee Chairs and members from among its members at the constitutive meeting of the Board.

Each committee must have at least three members, and every member must have the expertise and experience required for the duties of the committee. Each committee has a written charter confirmed by the Board of Directors. The committees report to the Board of Directors on the matters discussed and actions required regularly at the Board meeting following the committee meeting. The committees have no independent power of decision: the Board of Directors makes the decisions collectively.

Duties

The Board specifies the duties of the AC in the AC charter. According to its charter, DNA’s Audit Committee assists the Board of Directors in carrying out its financial reporting and control, risk management and internal and external audit responsibilities. The committee reports regularly to the Board of Directors.

The main duties of the AC include the following:

• Monitoring the company’s financial position; financing status and taxation position;
• Monitoring the reporting process of financial statements;
• Monitoring, supervising and evaluating the financial reporting system and process and the risk management process;
• Discussing plans and reports of internal audit in the extent specified in the Internal Audit Charter;
• Monitoring and evaluating the operations and efficiency of the company’s internal control, internal audit and risk management systems;
• Performing a quarterly review to confirm the accuracy of the company's financial result with financial managers and auditors, before approval by the Board of Directors;
• Monitoring significant financial, financing and taxation risks and actions for controlling them;
• Discussing significant financial risks and managerial actions to monitor, control and report on the said risks;
• Reviewing significant findings by the auditors and the related management responses;
• Evaluating significant trials and other litigation matters with the Senior Vice President, Legal Affairs, as required;
• Monitoring business transactions by company management and the related parties, and possible related conflicts of interest;
• Reviewing the company’s Corporate Governance Statement;
• Monitoring the statutory audit of the financial statements and consolidated financial statements;
• Evaluating the independence of the statutory auditor or auditor firm, particularly the provision of other than audit services to the audited company;
• Preparing a proposal, for consideration, on the election of the auditor;
• Monitoring processes and risks related to IT security;
• Evaluating the company’s disclosure policy and propose changes, as required, to the Board of Directors;
• Evaluating the process of complying with laws and regulations; and
• Discussing and monitoring special issues − allocated by the Board of Directors − relevant to the Audit Committee’s sphere of duties.

The Audit Committee may have additional tasks, as deemed appropriate to the fulfilment of its responsibilities.

Duties

The Board of Directors specifies the duties of the Personnel Committee in the Personnel Committee charter. The Personnel Committee assists the Board in matters relating to the development of the Group’s corporate culture, personnel strategy and remuneration strategy. The Committee assists the Board in matters relating to the appointment and remuneration of the Group’s key employees. Other matters prepared by the Committee include, for example, identification of key capabilities, ensuring of the competence required by strategy, and successor planning for the executive management and key employees.

The duties of the Personnel Committee comprise basic duties according to the Corporate Governance Code and additional duties decided by the Board. 

Duties related to personnel strategy and competence development:

• Ensuring that the different areas of strategy and personnel strategy are in harmony.
• Supervision and assessment of risks relates to the personnel strategy, and recommendations for risk management.
• Regular assessment of job satisfaction. 
• Regular assessment of the status, actions and objectives of employment matters. 
• Regular assessment of the status, actions and objectives of occupational safety. 
• Regular assessment of the status, actions and objectives of diversity. 
• Assessment of corporate responsibility and ethics aspects from the perspective of the Personnel Committee’s duties. 
• Regular assessment of personnel and management competence and capability measures.

Duties related to remuneration strategy, performance assessment and successor planning:

• Supervision of performance assessment of the management and personnel, and supervision of successor planning and remuneration.
• Ensuring successor planning practices and actions. 
• Assessment of business objectives related to the CEO position and other objectives relevant to shareholder value. 
• Preparing proposals for the appointment and terms of employment of Executive Team members. 
• Preparing proposals for the remuneration of the CEO and Executive Team based on performance assessments. 
• Regular assessment of remuneration in terms of appropriateness and effectiveness. 
• Preparing proposals for developing the remuneration system and reforming incentive schemes and pension systems.  
• Supervision and assessment of risks related to the remuneration policy and practices, and recommendations for risk management. 
• Ensuring the appropriateness of reference groups and analyses related to remuneration.
• Election of external consultants for development and regular assessment of remuneration.