Corporate Governance Statement
Tornator Oyj's Corporate Governance Statement complies with the Finnish Corporate Governance Code 2015 for listed companies, issued by the Securities Market Association on 1 October 2015 and effective from 1 January 2016. The Corporate Governance Statement is published separately from the Board of Directors' Report.
Ownership and corporate structure
In 2018 the Tornator Timberland Group included, besides the parent company Tornator Oyj in Finland, Tornator Eesti OÜ in Estonia and SC Tornator SRL in Romania. All three companies own forestlands and practise sustainable, operational forestry. In addition, Tornator Oyj is the sole owner of five wind power development companies in Finland.
The owners of Tornator Oyj are Finnish investors, mostly institutions. There are 10 shareholders.
The governance of Tornator Oyj is based on the Finnish Companies Act and Tornator Oyj's articles of association. The company's shares are not listed for public trading. Tornator Oyj has issued a secured bond that is listed by NASDAQ OMX Helsinki Oy, and the company complies with its rules and regulations for listed bonds, the Securities Markets Act as well as the Financial Supervisory Authority's regulations which are publicly available at www.finanssivalvonta.fi
The Annual General Meeting is the highest decision-making body in Tornator Oyj, deciding on matters laid down in the Finnish Companies Act. The AGM is held once a year, in May at the latest, on a date determined by the company's Board of Directors. According to Tornator Oyj's articles of association, the votes of a shareholder at the Shareholders' General Meeting may not exceed twenty (20) percent of the total number of votes carried by all shares in the company, including the voting rights of all companies and their pension funds and foundations belonging to the same group as the shareholder.
The Board of Directors of Tornator Oyj consists of 4-7 ordinary members, elected by the AGM for one year at a time. The AGM also elects a personal deputy for each member. The Board of Directors supervises Tornator's operations and management, deciding on significant matters concerning the company strategy, investments, organisation and finance. The Board of Directors convenes at least four times a year. In 2018 the Board had 10 meetings.
Details of the members of the Board of Directors are given on this page.
Tornator has two committees. The Oversight Committee's job is to oversee significant agreements between the company and the shareholders. It works under the Board of Directors which elects three of its members on it for one year at a time. The Oversight Committee convenes and reports to the Board at least twice a year. Also under the Board of Directors, there is a Remuneration Committee on which the Board elects two of its members for one year at a time, and which convenes and reports to the Board as necessary. The Board has decided not to establish a separate audit committee, but instead to perform these duties as part of normal Board work.
Chief Executive Officer and Management Group
Tornator's Board of Directors appoints the Chief Executive Officer. The CEO is responsible for the company's financial performance and for organising business operations and administration according to legislation as well as instructions and orders issued by the Board. The CEO's task is to provide information to the Board on things such as the company's financial situation and changes in the business environment. The CEO is also responsible for key customer relationships.
The CEO is assisted by the Management Group. In 2018 the Management Group included five members. The CEO acts as the Chairman of the Management Group. The Management Group is responsible for the practical implementation of the strategy determined by the Board of Directors. The Management Group meets at about one month's intervals and always when necessary. In 2018 the Management Group had ten meetings. In addition to the Management Group, the company has an operational management level made up of experts of various functions, with the task of assisting the Management Group in deploying the strategy. The operational management level includes ten members, and its representatives are invited to the Management Group's meetings as necessary.
Details of the members of the Management Group are given on this page.
The company's operational activities are arranged as a process organisation. The core processes are planning, timber sales, real estate, silviculture and environment. These are supported by the internal service processes such as HR, ICT, finance, communications, etc. The processes perform tasks set with company management to meet strategic goals. Abroad, Country Managers are responsible for organising operational activities and reporting on them to the parent company. The subsidiaries also receive assistance from the parent company's support functions.
Related party transactions
Tornator and Stora Enso Oyj have a significant, volume-based long-term timber sales agreement. The market conformity of this agreement is supervised by the Oversight Committee which works under the Board of Directors (see Committees above). The Oversight Committee has no representatives from Stora Enso.
The Annual General Meeting decides on the remuneration for the Board of Directors. The Chairman and members of the Board are paid an annual fee. The Board of Directors decides on the remuneration for the Chief Executive Officer and the members of the Management Group, consisting of a fixed monthly salary and an incentive bonus based on individual performance. The Management Group is also covered by a long-term monetary incentive scheme.
The Annual General Meeting elects the authorised public accountants for one year at a time. Tornator's auditors are Deloitte & Touche Oy with Jukka Vattulainen, APA, as principal auditor since 2011.
The parent company's auditors are responsible for planning, co-ordinating and supervising the audit of the whole Group. An audit plan is prepared annually in co-operation with corporate management. The auditors report to the parent company's Board of Directors at least twice a year.
Tornator's risk management is aimed at securing profitable business in the long term and to create opportunities for well-managed risk taking within the selected strategy. It is based on systematic identification and analysis of all significant risks to the company, enabling the company to select the optimum tools to manage them. The Board of Directors determines the company's risk management guidelines, monitoring the risk management results and activities as well as evaluating the operation of risk management processes annually. The Management Group is responsible for the implementation of the risk management strategy, the monitoring of actual risks and the necessary risk management activities. A more detailed description of the risk management is given on this page.
This Corporate Governance Statement complements Tornator's Annual Report which is presented with the Financial Statements on the company's website at www.tornator.fi/publications.