This Corporate Governance Statement for 2015 has been issued according to the Finnish Corporate Governance Code 2010 and is published together with the Financial Statements and the Board of Directors' Report for 2015.
Corporate Governance Statement 2015
Comptel Corporation is a Finnish public limited company which duties and responsibilities of the executive bodies are defined according to the Finnish law. Comptel Corporation complies with the Finnish Limited Liability Companies Act, other regulations concerning publicly traded companies, Comptel Corporation’s Articles of Association and the rules of NASDAQ OMX Helsinki Ltd.
In addition, Comptel complies with the Finnish Corporate Governance Code issued by the Securities Market Association which entered into force on 1 October 2010. The Corporate Governance Code is available at www.cgfinland.fi.
Duties and Responsibilities of Executive Bodies
The highest decision making bodies in Comptel Corporation the General Meeting of the shareholders, the Board of Directors and the President and CEO of the Group.
The highest decision-making power in Comptel Corporation is vested in the General Meeting. In the General Meeting shareholders decide on the adoption of the financial statements, the use of the profit shown on the balance sheet, the discharge from liability of the Board members as well as the President and CEO, the number of Board members and the remuneration paid to the Board members and auditors. The General Meeting elects the members of the Board of Directors and the Auditor. In addition, any other business mentioned in the notice of the meeting is dealt with during the General Meeting.
The General Meeting of Comptel Corporation is summoned by the company’s Board of Directors. According to the company’s Articles of Association, the Annual General Meeting must be held each year before the end of June, on a date set by the Board of Directors.
Comptel Corporation’s Annual General Meeting for 2015 was held on 9 April 2015. The documents concerning the Annual Meeting are available at http://www.comptel.com/investors/eng/governance/annual-general-meeting.
Board of Directors
The duties and responsibilities of the Board of Directors are primarily defined by the Finnish Limited Liability Companies Act and the Articles of Association of Comptel Corporation. The Board of Directors controls and supervises the operational management of the company. The Board of Directors is responsible for ensuring that the company’s financial accounting and financial management are properly organised.
The Board of Directors’ Rules of Procedure specifies the Board’s duties, business to be handled, meeting practices and the decision-making processes. According to the Rules of Procedure, the Board of Directors handles and decides on all matters that are financially, commercially or fundamentally significant to the Group’s operations.
The Board of Directors confirms the Group’s strategy, budget, corporate structure, major corporate arrangements and investments. Furthermore, the Board of Directors approves and confirms the principles of risk management, appoints and discharges the President and CEO, and decides on the terms and conditions of employment for the President and CEO. The Board confirms also the terms and conditions of employment of the members of the Executive Board.
The Board of Directors regularly evaluates its own operations and working practices. The Board also carries out a self-assessment in relation to its operations and working practices once a year.
As specified in the Articles of Association, the General Meeting elects a minimum of three and a maximum of six Board members. The Board members are elected for one year at a time so that the term of office for all Board members ends at the close of the following year’s Annual General Meeting. The Board of Directors elects a Chairman and a Vice Chairman from among its members.
The Annual General Meeting for 2015 elected the following five Board members: Mr. Pertti Ervi (Chairman), Mr. Hannu Vaajoensuu (Vice Chairman), Mr. Heikki Mäkijärvi, Ms. Eriikka Söderström and Mr. Antti Vasara.
All members of the Board are independent of the company and the company’s significant shareholders.
The biographical details and the information on the holdings of the members of the Board of Directors are available at http://www.comptel.com/investors/eng/governance/board-of-directors.
Ms. Tiina Sarhimaa, General Counsel, Head of Legal, serves as the secretary for the Board of Directors.
In 2015 the Board of Directors convened 19 times (2014:17). The average attendance of the members was 96% (2014: 89%).
In its first meeting held on 9 April 2015 the Board of Directors decided not to set up committees. The decision was made taking into account the company’s size, a clear structure and a small number of Board members, due to which the Board considered that it is more effective to act without separate committees. The Board sees it useful to get in its entirety acquainted with the respective issues and therefore the tasks of an Audit Committee specified in the Finnish Corporate Governance Code are taken care by the Board in its full composition.
Whenever needed, the Board may also set up temporary working committees to prepare matters for the Board. Working committees were not set up by the Board in 2015.
President and CEO
The President and CEO is responsible for ensuring that the company’s accounting is legally arranged and that the company’s financial management is reliably organised.
The President and CEO is responsible for ensuring that the objectives, strategies, future plans, outlines and goals set by the Board of Directors are implemented and achieved by the Comptel Group. The President and CEO prepares the matters to be decided by the Board of Directors and executes the decisions made.
The President and CEO is appointed by the Board of Directors. The Board of Directors decides on the terms and conditions of President and CEO´s employment, including the salary, other compensations and fringe benefits that are defined in the CEO’s employment contract.
Mr. Juhani Hintikka has acted as the President and CEO of Comptel Corporation since 2011. The biographical details and information on the holdings of the President and CEO are available at http://www.comptel.com/investors/eng/governance/executive-board
The duty of Comptel’s Executive Board is to assist the President and CEO. The Executive Board consists of the directors of the business units and the units supporting business operations.
The Executive Board is responsible for integrating the activities of the Group and its parts into an operating plan associated with the annual budget to implement Comptel Group’s strategies. During the year the results of the operations in relation to the budget and operating plan are handled in the Executive Board monthly.
In 2015 the members of the Executive Board were, in addition to President and CEO, Mr. Antti Koskela (EVP SO), Mr. Kari Onniselkä (EVP ID), Mr. Tom Jansson (CFO) , Mr. Mauro Carobene (CCO), Ms. Niina Pesonen (SVP HR), Mr. Ari Vänttinen (SVP Marketing) and Mr. Jussi Himanen (SVP Strategy).
The biographical details and information on the holdings of the members of the Executive Board are available at http://www.comptel.com/investors/eng/governance/executive-board.
In 2015 the Executive Board convened 11 times (2014: 13).
Comptel Group’s remuneration schemes have been designed to promote competitiveness and long-term financial success of the company and to contribute to the favorable development of shareholder value. Remuneration schemes are based on predetermined and measurable performance and result criteria. Comptel has long-term and short-term performance based remuneration schemes.
The General Meeting decides on the remuneration payable to the Board of Directors. The Board of Directors decides on the remuneration and other compensation payable to the President and CEO.
The complete information on the remuneration of the members of the Board of Directors, President and CEO and the main principles of the remuneration (Remuneration Statement) are available at http://www.comptel.com/investors/eng/governance/remuneration.
According to the Finnish Auditing Act, statutory audits comprise the auditing of the accounts, financial statements, Board’s report and administration. The General Meeting must be provided with an Auditor’s Report including an opinion on whether the financial statements give correct and sufficient information about the Group’s result and financial position at the close of the financial year. The Auditors report to the Board of Directors on their work and observations. The auditor verifies and reports also to the Board of Directors in an ongoing manner about observations concerning Comptel’s administration and operations.
The Annual General Meeting 2015 elected Ernst & Young Oy as the Auditor of Comptel. Mr. Mikko Järventausta (APA) has acted as Principal Auditor during the financial year 2015.
The fees paid to the Auditor for the auditing services as well as for any other services, if any, are specified in the financial statements for the year 2015.
Comptel complies with the insider guidelines of NASDAQ OMX Helsinki Ltd. In accordance with the Securities Market Act, Comptel maintains a register containing information on the so called insiders with the duty to declare, in the SIRE system of Euroclear Finland Ltd. Insiders comprise permanent insiders and project-specific insiders.
At the end of 2015, there were 20 insiders with the duty to declare (19) and 63 company-specific permanent insiders (58). The insiders with the duty to declare include the members of the Board of Directors, CEO, Executive Board members and the principal Auditor.
Comptel’s insiders are obliged to comply with the so called closed window period during which no trading with the company’s shares or securities entitling to shares is allowed. Comptel’s closed window starts 14 days before the end of the each quarter. The closed window ends 24 hours after the publication of the respective Interim Report or Financial Statements.
An updated list of the insiders with the duty to declare, their connections and their holdings is available at http://www.comptel.com/investors/eng/share-shareholders/insiders.
Internal Control and Risk Management
Internal control comprises of processes that provide reasonable assurance regarding the achievement of the company’s objectives in the efficiency of operations, cost effective use of resources, reliability of financial reporting and compliance with the laws and regulations as well as the internal practices. Comptel’s Board of Directors and management take part in internal control processes.
The objective of Comptel’s internal control is to ensure that:
• company’s operations are efficient and profitable
• financial and operational information is reliable
• entire Group complies with the regulations and policies
Internal control is not a separate process, but part of company’s day-to-day operations. Internal control covers Comptel processes, policies and organisational structures that help to ensure that the company is achieving its objectives, the business conduct is ethical, the assets are managed responsibly and that financial reporting is organised properly.
Internal control includes, for example, monthly management reporting, revenue recognition management, HR management policies, processes defined by the quality system, Group’s approval policy delegation of authority and monitoring the compliance with regulations, policies and practices.
The Group’s financial administration monitors internal and external accounting and reconciles and investigates the possible differences between the two. The financial reporting process is monitored by the Board of Directors. In connection with the statutory audit, the Auditor reviews the control environment of the financial reporting as part of auditing the administration.
Risk management is an integral part of Comptel’s internal control. Risk management and internal control are integrated at the process level. Risk management refers to a systematic process to identify, evaluate and control risks due to external factors as well as risks arising from the Group’s own activity.
The Board of Directors has ratified the principles of risk management defining the risk management objectives and general practices, and also the tasks and responsibilities connected with risk management.
The Chief Financial Officer is in charge of coordinating risk management within the Group. The business units have the primary responsibility for identification and management of any and all risks that have an impact on their operations. Risk evaluation and management is an important part of the Group’s annual business planning and strategy process, budgeting, as well as the preparatory and decision making processes connected with commercial offers, agreements and investments and other operative activities.
Comptel’s business is subject to various risks and uncertainties. Comptel evaluates key risks related to its business continuously and up to date information on the business and other risks related to Comptel are disclosed periodically in the annual and interim reports available at http://www.comptel.com/investors/eng/governance/risk-management.
The purpose of the internal audit is to ensure that the business processes, financial processes and administrative processes of the company are performed in compliance with corporate governance principles. Activities are controlled to ensure profitable business operations.
Internal audit at Comptel is part of the financial administration. Internal audit is conducted according to in advance prepared plan on case by case bases, if a need for an audit is detected. Whenever necessary, external experts are used to complement the audit activities. Where appropriate, the results of internal audits are reported to the Board of Directors.