The Board has three committees to assist in its duties pursuant to the respective Committee Charter: the Audit Committee, Corporate Governance and Nomination Committee, and Personnel Committee. The Board may also establish ad hoc committees for detailed reviews or consideration of particular topics to be proposed for the approval of the Board.
Members of the Audit Committee, the Personnel Committee, and the Corporate Governance and Nomination Committee are all independent directors drawn from the Board itself. The committee members are appointed by the independent members of the Board upon the recommendation of the Corporate Governance and Nomination Committee based on each committee’s member qualification standards. Consideration is given to the desires, skills and characteristics of individual directors.
Corporate Governance & Nomination Committee
Jouko Karvinen (Board Vice Chair)
Risto Siilasmaa (Board Chair, interim CEO)
The Audit Committee
The Audit Committee consists of a minimum of three members of the Board who meet all applicable independence, financial literacy and other requirements of Finnish law and the rules of the stock exchanges where Nokia shares are listed, i.e. NASDAQ OMX Helsinki and the New York Stock Exchange.
Since May 7, 2013, the Audit Committee consists of the following three members of the Board: Jouko Karvinen (Chairman), Elizabeth Doherty and Elizabeth Nelson.
The Audit Committee is established by the Board primarily for the purpose of overseeing the accounting and financial reporting processes of the company and audits of the financial statements of the company. The Committee is responsible for assisting the Board's oversight of:
(1) The quality and integrity of the company's financial statements and related disclosure.
(2) The statutory audit of the company's financial statements.
(3) The external auditor's qualifications and independence.
(4) The performance of the external auditor subject to the requirements of Finnish law.
(5) The performance of the company's internal controls and risk management and assurance function.
(6) The performance of the internal audit function.
(7) The company's compliance with legal and regulatory requirements, including also the performance of its ethics and compliance program.
The Committee also maintains procedures for the receipt, retention and treatment of complaints received by the company regarding accounting, internal controls, or auditing matters and for the confidential, anonymous submission by employees of the company of concerns regarding accounting or auditing matters. Nokia’s disclosure controls and procedures, which are reviewed by the Audit Committee and approved by the Chief Executive Officer and the Chief Financial Officer, as well as Nokia’s internal controls over financial reporting are designed to provide reasonable assurance regarding the quality and integrity of the company's financial statements and related disclosures. The Disclosure Committee chaired by Chief Financial Officer is responsible for preparation of the quarterly and annual results announcements, and the process includes involvement by business managers, business controllers and other functions, like internal audit, as well as a final review and confirmation by the Audit Committee and the Board.
Under Finnish law, Nokia's external auditor is elected by our shareholders by a simple majority vote at the Annual General Meeting for one fiscal year at a time. The Audit Committee makes a proposal to the shareholders in respect of the appointment of the external auditor based upon its evaluation of the qualifications and independence of the auditor to be proposed for election or re-election. Under Finnish law, the fees of the external auditor are also approved by Nokia’s shareholders by a simple majority vote at the Annual General Meeting. The Committee makes a proposal to the shareholders in respect of the fees of the external auditor, and approves the external auditor's annual audit fees under the guidance given by the Annual General Meeting.
In discharging its oversight role, the Audit Committee has full access to all company books, records, facilities and personnel. The Committee may retain counsel, auditors or other advisors in its sole discretion, and must receive appropriate funding, as determined by the Committee, from the company for the payment of compensation to such outside advisors.
The Audit Committee meets at least four times a year based upon a schedule established at the first meeting following the appointment of the Committee. The Committee meets separately with the representatives of Nokia’s management, heads of the internal audit and ethics and compliance functions, and the external auditor in connection with each regularly scheduled meeting. The head of the internal audit function has at all times a direct access to the Audit Committee, without involvement of management. The Audit Committee had 6 meetings in 2012. The attendance at all meetings was 100%. In addition, any directors who wish to may attend Audit Committee meetings as non-voting observers.
The Personnel Committee
The Personnel Committee consists of a minimum of three members of the Board who meet all applicable independence requirements of Finnish law and the rules of the stock exchanges where Nokia shares are listed, i.e. NASDAQ OMX Helsinki and the New York Stock Exchange.
Since May 7, 2013, the Personnel Committee consists of the following four members of the Board: Henning Kagermann (Chairman), Bruce Brown, Helge Lund and Kari Stadigh.
The primary purpose of the Personnel Committee is to oversee the personnel policies and practices of the company. It assists the Board in discharging its responsibilities relating to all compensation, including equity compensation, of the company's executives and their terms of employment. The Committee has overall responsibility for evaluating, resolving and making recommendations to the Board regarding:
(1) Compensation of the company's top executives and their employment conditions.
(2) All equity-based plans.
(3) Incentive compensation plans, policies and programs of the company affecting executives.
(4) Other significant incentive plans.
The Committee is responsible for overseeing compensation philosophy and principles and ensuring the above compensation programs are performance-based, designed with an intention to contribute to the long-term value sustainability of the company, properly motivate management, support overall corporate strategies and are aligned with shareholders’ interests. The Committee is responsible for the review of senior management development and succession plans.
The Personnel Committee had 7 meetings in 2012. The average attendance at the meetings was 86%. In addition, any directors who wish to may attend Personnel Committee meetings as non-voting observers.
The Corporate Governance and Nomination Committee
The Corporate Governance and Nomination Committee consists of three to five members of the Board who meet all applicable independence requirements of Finnish law and the rules of the stock exchanges where Nokia shares are listed, i.e. NASDAQ OMX Helsinki and the New York Stock Exchange.
From May 7, 2013 until September 3, 2013, the Corporate Governance and Nomination Committee consisted of the following four members of the Board: Risto Siilasmaa (Chairman), Henning Kagermann, Jouko Karvinen and Helge Lund. From September 3, 2013 the Corporate Governance and Nomination Committee consists of the following three members of the Board: Jouko Karvinen (Chairman), Henning Kagermann and Helge Lund.
The Corporate Governance and Nomination Committee's purpose is:
(1) To prepare the proposals for the general meetings in respect of the composition of the Board and the director remuneration to be approved by the shareholders.
(2) To monitor issues and practices related to corporate governance and to propose necessary actions in respect thereof.
The Committee fulfills its responsibilities by:
(i) Actively identifying individuals qualified to become members of the Board and considering and evaluating the appropriate level and structure of director remuneration.
(ii) Proposing to the shareholders the director nominees for election at the Annual General Meetings as well as the director remuneration.
(iii) Monitoring significant developments in the law and practice of corporate governance and of the duties and responsibilities of directors of public companies.
(iv) Assisting the Board and each Committee of the Board in its annual performance evaluations, including establishing criteria to be used in connection with such evaluations.
(v) Developing and recommending to the Board and administering Nokia’s Corporate Governance Guidelines.
(vi) Reviewing the company's disclosure in the Corporate Governance Statement.
The Committee has the power to retain search firms or advisors to identify candidates. The Committee may also retain counsel or other advisors, as it deems appropriate. The Committee has sole authority to retain or terminate such search firms or advisors and to review and approve such search firm or advisor's fees and other retention terms. It is the Committee's practice to retain a search firm to identify new director candidates.
The Corporate Governance and Nomination Committee had 5 meetings in 2012. The average attendance at meetings was 90%. In addition, any directors who wish to may attend Corporate Governance and Nomination Committee meetings as non-voting observers.