Finnish Corporate Governance Code 2020

The Finnish Corporate Governance Code, updated in 2020, provides guidelines and best practices for corporate governance in Finland. Here’s an overview of its key components:

1. Purpose and Scope: The code sets out principles and recommendations for listed companies to promote transparency, accountability, and responsible decision-making.
2. Equal Treatment of Shareholders: Emphasizes the fair treatment of all shareholders, regardless of their size or ownership structure, ensuring their rights are respected and protected.
3. Role of Shareholders in Corporate Governance: Encourages active shareholder engagement and participation in corporate governance, including voting on key matters and exercising ownership rights effectively.
4. Board of Directors: Specifies the responsibilities and duties of the board of directors, including overseeing the company’s strategy, risk management, and financial performance.
5. Composition of the Board: Recommends a diverse and balanced composition of the board, with directors possessing a mix of skills, experience, and independence relevant to the company’s operations.
6. Remuneration of Directors and Executives: Provides guidelines for setting executive remuneration, ensuring it is fair, transparent, and aligned with long-term company performance and shareholder interests.
7. Risk Management and Internal Control: Highlights the importance of effective risk management and internal control systems to safeguard the company’s assets and ensure compliance with laws and regulations.
8. Corporate Culture and Values: Encourages companies to foster a corporate culture based on integrity, ethics, and respect for all stakeholders, promoting trust and confidence in the organization.
9. Transparency and Disclosure: Stresses the importance of transparent and timely disclosure of relevant information to shareholders and stakeholders, enabling informed decision-making.
10. Audit Committee: Recommends the establishment of an audit committee comprised of independent directors to oversee financial reporting, internal controls, and the external audit process.
11. Nomination Committee: Encourages the establishment of a nomination committee responsible for nominating candidates for the board of directors and ensuring a transparent and rigorous selection process.
12. Remuneration Committee: Suggests the formation of a remuneration committee tasked with setting executive remuneration policies and ensuring they are aligned with company performance and shareholder interests.

Overall, the Finnish Corporate Governance Code, 2020, aims to enhance the effectiveness of corporate governance practices in Finnish listed companies, promoting transparency, accountability, and sustainable value creation for shareholders and stakeholders alike.