Efore

 Efore Plc is a Finnish public limited liability company which, in its decision-making and administration, complies with the Finnish Companies Act, other laws and regulations concerning public companies and Efore’s Articles of Association. In addition, Efore complies with the Insider Guidelines issued by the NASDAX OMX Helsinki Oy and the Finnish Corporate Governance Code for Listed Companies issued by Securities Market Association in 2008. Deviations from the CG code can be found below.

Corporate Governance Statement 2009

Efore Plc's Corporate Governance Statment  2009 has been published as separate statement and is included in Annual Report 2009.

Group structure

Efore Group consists of the parent company, Efore Plc, and its directly or indirectly wholly owned subsidiaries in Finland and abroad..

The governance and operations of the Group are the responsibility of the parent company's decision-making bodies and authorities, which are the Annual General Meeting, Board of Directors and the President and CEO. The President and CEO is assisted by the Senior Executive Committee. The operations of the subsidiaries are the responsibility of their respective Boards of Directors, which comprise the Group's President and CEO and other representatives of the Group's senior management. The Group's President and CEO is also chairman of the Board of Directors of each of the subsidiaries. The President of each subsidiary reports to the Group's President and CEO. Efore Plc provides the subsidiaries with joint Group services and is also responsible for its strategic planning and finances.

The Group's operative organization is based on global functional line organizations and three geographical sales areas, Europe, America, and Asia.

Shareholders' meeting

 The functions of a shareholders' meeting as the company's supreme decision-making authority are defined in the Companies Act and Efore's Articles of Association. At shareholders' meetings, shareholders are able to exercise their right to speak and vote.

Annual General Meeting convenes annually and matters decided upon by the AGM include e.g. adopting the financial statements, distribution of dividend, electing auditors and Board members and determining their remuneration and discharging the Board of Directors and the President and CEO from liability.

The Chairman of the Board and the President and CEO shall be present at the Annual General Meeting and also other Board Members, if possible and also such persons as have been proposed for Board membership for the first time.

In addition to the Annual General Meeting, extraordinary shareholders' meetings may be organized as necessary. 

Appointing Board members

The Nomination Committee of the Board of Directors prepares a proposal concerning Board members. The Annual General Meeting elects the members of the Board of Directors by simple majority vote for a term of office that ends with the close of the next Annual General Meeting following their election. The Board of Directors elects from among its members a Chairman and Deputy Chairman.

Composition of  the Board of Directors

As set out in Efore's Articles of Association, the Board of Directors shall have no less than three and no more than ten ordinary members.The company's President and CEO is not a member of the Board of Directors.

 The composition shall take into account the needs of the company operations and the development stage of the company. A person to be elected to the board shall have the qualifications required by the duties, sufficient  knowledge of financial matters and business operations. A person to be elected to the Board  shall have the  possibility to devote a sufficient amount of time to the work.

The majority of the directors shall be independent of the company. In addition, at least two of the members representing this majority shall be independent of significant shareholders of the company.

-> Composition of the Board of Directors during the fiscal year 2009:
- Isto Hantila, Chairman of the Board, member of the Audit Committee, Independed of the company or the company's main shareholders
- Marko Luoma, Independed of the company or the company's main shareholders
- Ari Siponmaa, Independed of the company or the company's main shareholders
- Timo Syrjälä, Chairman of the Audit Committee, Independed of the company or the company's main shareholders
- Matti Tammivuori, member of the Audit Committee,  non independed member of the company's main shareholders
- Matti Vikkula, Deputy Chairman of the Board of Directors, Chairman of the Audit Committee, Independed of the company or the company's main shareholders

Deviation from the Code's recommendation Nr 9:
With regard to the duties and efficient operations of the board, it is important for the company that the members have versatile expertisen and mutually complementing experience. Efore Plc deviates from the Code’s recommendation Nr. 9 concerning composition of the Board so that at the moment both genders are not represented on the board.

Duties and responsibilities of the Board

The Board of Directors has general decision-making authority in all company matters that are not stipulated (by law or under the Articles of Association) for the decision or action of another party. The Board is responsible for the governance of the company and for duly organizing its operations. It also approves the corporate strategy, the risk management principles, the Group's corporate values, the operating plan and related annual budget, and decides on major investments.

The main duties and operating principles of the Board of Directors are given in a separate working order. This refers to the declaration of a quorum at Board meetings, the writing and approval of minutes, and the preparations needed on matters for decision. The Board of Directors reviews its own working procedures through an annual self-evaluation process.

-> The Board of Directors met 15 times during the fiscal year 2009 and the participation rate of the Board members was 97 %.

Board committees

The Board of Directors has two committees that assist in its work; the Audit committee and the Nomination Comittee. The Board of Directors elects among its members comittee members and Chairman of the comittees.  External members can be also members of the Nomination Committee.

The committees' working orders set out the duties and operating principles for each committee. The committees report their work to the Board of Directors on a regular basis.

The main duties of the Audit Committee are to examine the company's finances; oversee compliance with the law and the relevant standards; monitor  the reporting process of financial statements,  supervise the financial reporting process, evaluate the company's internal supervision and risk management;  monitor the statutory audit of the financial statements and consolidated financial statements, evaluate the independence of the statutory auditor or audit firm, particularly the provision of related services to the company to be audited.

The main duties of the Nomination Committee are to prepare material on remunaeration matters concerning the company's Board members and other managerial personnel and tasks related to an annual  evaluation process.

Deviation from the Code's recommendation Nr. 22:
Efore Plc deviates from the Code’s recommendation Nr. 22 concerning the election of members to the Nomination Committee, which can include also other persons than members of the Board. The company considers the exception justified in order to enable as wide a view as possible when preparing for the election of the Board members.

-> The Audit Committee met 4 times during the fiscal year 2009 and the parcipation rate of the members was 92 %.
-> The Nomination Committee met twice  and the parcipation rate of the members was 88 %.

Efore's President and CEO

The Board of Directors appoints the company's President and CEO and supervises his actions. The main terms and conditions governing the President and CEO's appointment are detailed in written contract. The President and CEO manages and supervises Group business operations within the guidelines and directives issued by the Board of Directors, and ensures that the company's accounting accords with the law and that the financial management system is reliable.

Executive Management Team

The President and CEO chairs the Executive Management Team and is also assisted by it in his work. The Executive Management Team comprises the President an CEO and the Executive Vice Presidents responsible for the main functions of the company.  .

The Executive Management Team's main responsibilities include drafting the broad outline of the Group's strategy and monitoring and securing a good financial performance. The Team convenes 1-2 times per month.

Governance of insider activity

Efore Plc's public insiders are the members of the Board of Directors, the President and CEO, the Deputy to the President and CEO, the company's auditors and the members of the Executive Management Team. In addition the company has a company-specific insider register. The insider registers are maintained under the supervision of the President and CEO.

Efore Plc complies with the insider trading instructions approved by the Nasdaq OMX Helsinki Oy, on the basis of which the company's Board of Directors has approved a set of internal guidelines on insider trading. According to these guidelines, investments made by insiders must be long-term investments and trading must always take place at a time when the market's information on factors affecting the share value is as complete as possible. The period closed to trading by insiders is always a minimum of 14 days before publication of interim reports, and 21 days before publication of the financial statements bulletin. Trading can also be prohibited for special reasons outside the closed period, in which case all insiders entered in the register will be informed accordingly.

Supervision

The Group has financial reporting systems for supervising its business operations and financial management. The Board of Directors has approved the Group's management organization and governing principles, decision-making authority and approval procedures, administrative operating policies, financial planning and reporting, and remuneration principles. Internal auditing is a part of Group's finance administration. The management of the finance administration reports the findings of internal auditing to the President and CEO and the Audit Committee.