Nokia’s corporate governance practices are subject to Finnish laws and regulations, Nokia’s Articles of Association, the Finnish Corporate Governance Code, and other mandatory corporate governance rules of the stock exchanges where Nokia shares are listed, i.e. NASDAQ OMX, Helsinki and the New York Stock Exchange.
The Finnish Corporate Governance Code is accessible, among others, at www.cgfinland.fi. The corporate governance rules that are mandatory for foreign private issuers under section 303A of the New York Stock Exchange Listed Company Manual are accessible at http://nysemanual.nyse.com/lcm/
Departures from the corporate governance standards
Under the Finnish Corporate Governance Code, companies must disclose if they depart from an individual recommendation of the Code and provide an explanation for doing so. Nokia is not in full compliance with the recommendation 39 of the Finnish Corporate Governance Code as Nokia’s Restricted Share Plans do not include any performance criteria but are time-based only, with a restriction period of at least three years from the grant. Restricted shares are granted on a selective basis to promote long-term retention of functional mastery and other employees and executives deemed critical for the future success of Nokia, as well as to support attraction of promising external talent in a competitive environment in which Nokia’s peers, especially in the United States, commonly use such shares. The Restricted Share Plans also promote employee share ownership, and are used in conjunction with the Performance Share and Stock Option Plans.
Under the New York Stock Exchange’s corporate governance listing standards, listed foreign private issuers, like Nokia, must disclose any significant ways in which their corporate governance practices differ from those followed by US domestic companies under the NYSE listing standards. There are no significant differences in the corporate governance practices followed by Nokia as compared to those followed by US domestic companies under the NYSE listing standards, except that Nokia follows the requirements of Finnish law with respect to the approval of equity compensation plans. Under Finnish law, stock option plans require shareholder approval at the time of their launch. All other plans that include the delivery of company stock in the form of newly issued shares or treasury shares require shareholder approval at the time of the delivery of the shares or, if shareholder approval is granted through an authorisation to the Board of Directors, no more than a maximum of five years earlier. The NYSE listing standards require that equity compensation plans be approved by a company’s shareholders.