Nokia’s corporate governance practices comply with Finnish laws and regulations, Nokia’s Articles of Association, the Finnish Corporate Governance Code 2015, and corporate governance standards of the following stock exchanges: Nasdaq Helsinki and the New York Stock Exchange (“NYSE”).
The Finnish Corporate Governance Code is available at www.cgfinland.fi. The corporate governance rules that are applicable to foreign private issuers under section 303A of the New York Stock Exchange Listed Company Manual are available at http://nysemanual.nyse.com/lcm/
Deviation from the corporate governance standards
Under the Finnish Corporate Governance Code, companies must disclose if they deviate from an individual recommendation of the Code and provide an explanation for doing so.
In 2016, we complied with the Finnish Corporate Governance Code, with the exception that we were not in full compliance with recommendation 24, because our restricted share plans did not include performance criteria but were time-based only. The restricted shares vest in three equal tranches on the first, second and third anniversary of the award subject to continued employment with Nokia. Restricted shares were to be granted on a highly limited basis and only in exceptional retention and recruitment circumstances, primarily in the United States, to ensure our ability to retain and recruit talent vital to the future success of the company. The restricted share plan for 2017 is designed in a similar manner, to be used on a limited basis for exceptional purposes related to retention and recruitment, primarily in the United States. The Board approves, upon recommendation from the Board’s Personnel Committee, any long-term incentive compensation and all equity plans, programs or similar arrangements of significance that the company establishes for its employees.
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 applied by Nokia as compared to those applied by US companies under the New York Stock Exchange corporate governance standards, with the exception that Nokia complies with 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, unless the shareholder approval has been granted through an authorization to the Board, a maximum of five years earlier. The NYSE corporate governance standards require that the equity compensation plans be approved by a company’s shareholders. Nokia aims to minimize the necessity for, or consequences of, conflicts between the laws of Finland and applicable non-domestic requirements.