Governance Information • Mar 21, 2018
Governance Information
Open in ViewerOpens in native device viewer
| Corporate Governance | 4 |
|---|---|
| The Board of Directors | 5 |
| Description of Activities | 5 |
| The Board of Directors | 8 |
| The Board Committees | 10 |
| Chief Executive Officer | 11 |
| Management Group | 12 |
| Election and Remuneration of the Auditor | 15 |
| Main Features of Internal Control and | |
| Risk Management Processes Related to | |
| Financial Reporting Processes | 15 |
| Insider Guidelines | 18 |
The governance of Bittium Corporation (hereinafter ´Company´) is determined by the Company´s Articles of Association, the laws of Finland (such as the Finnish Companies Act and Securities Market Act) and the Company´s Corporate Governance Code. The Company follows the Finnish Corporate Governance Code 2015 prepared by the Finnish Securities Market Association. The Governance Code may be viewed, inter alia, at the Finnish Securities Market Association website at www.cgfinland.fi.
In the assembly meeting held on April 12, 2017, the new Board of Directors elected on the same day considered the continuation of the Audit Committee and concluded that the extent of the Company´s business still requires that a group with a more compact composition than the Board of Directors deals with the preparation of matters pertaining to financial reporting and control. The Governance Code recommends that a Committee shall have at least three members. In the assembly meeting held on April 12, 2017, the new Board of Directors resolved to re-elect Staffan Simberg (Chairman of the Committee) and Kirsi Komi as members of the Audit Committee and to invite authorized public accountant Seppo Laine as external advisor of the Board of Directors. The composition of two members and an external advisor was considered to be in compliance with the recommendation as authorized public accountant Seppo Laine brings continuity and expertise needed in the Committee.
This Statement is made separately from the Report by the Board. The Board´s Audit Committee and the Company´s auditor have reviewed this Statement.
The statutory governing bodies of the Company are the Shareholders´ meeting, Board of Directors, Chief Executive Officer and the Auditor. The Management Group supports the statutory governing bodies of the Company. The Company´s domicile is Oulu.
This Statement may be viewed on the Company's website at www.bittium.com.
In 2017, the Board convened 13 times.
The Board members attended to the meetings as follows:
| January 1 –December 31, 2017 | Board | Audit committee |
|---|---|---|
| Staffan Simberg | 13/13 | 6/6 |
| Erkki Veikkolainen | 13/13 | |
| Kirsi Komi | 12/13 | 6/6 |
| Juha Putkiranta | 13/13 | |
| Seppo Mäkinen | 13/13 | |
| Tero Ojanperä | 9/10 | |
| Seppo Laine (external advisor of the Board) | 6/6 |
The Board of Directors is responsible for the Company´s governance and proper organization of the operations. The Board of Directors comprises of three to seven (3–7) members and in addition it may have one to three (1–3) deputy members. The Annual General Meeting shall elect the members of the Board of Directors for a term which expires at the end of the following Annual General Meeting. The number of terms for the members of the Board of Directors is not limited. The Board of Directors selects a Chairman among its members.
The Board conducts an annual evaluation of the independence of its members in accordance with recommendation 10. A member of the Board is required to submit to the Company the information necessary to conduct the evaluation of independence. A Board member is also required to notify the Company of any changes in information relating to independence.
The Annual General Meeting held on April 12, 2017 decided that the Board of Directors shall comprise six (6) members. Ms. Kirsi Komi, Mr. Seppo Mäkinen, Mr. Juha Putkiranta, Mr. Staffan Simberg and Mr. Erkki Veikkolainen were re-elected as members of the Board of Directors. Further, Mr. Tero Ojanperä was elected as a new member of the Board of Directors. The members of the Board of Directors were considered independent members of the Board as regards both the Company and its significant shareholders. In the assembly meeting held on April 12, 2017 the Board of Directors elected Erkki Veikkolainen as the Chairman of the Board. Further, the Board of Directors resolved to keep the Audit Committee, and elected Mr. Staffan Simberg (Chairman of the Committee) and Ms. Kirsi Komi as members of the Audit Committee and authorized public accountant Seppo Laine was invited to the Audit Committee as external advisor of the Board of Directors.
The Board of Directors has defined a working order and evaluates its performance annually. The Board of Directors shall implement the decisions of the General Meeting. The Board of Directors supervises the operations and management. The Board of Directors makes decisions on the Company´s guiding principles for operation, strategy and budget. The Board of Directors decides on mergers and acquisitions and other strategic alliances as well as significant investments and significant matters regarding organization and finance. The Board of Directors supervises that the Group companies´ accounting and financial management is duly organized. The Board of Directors appoints the CEO and possible Deputy for him or her as well as approves the Company´s organizational structure.
The CEO, CFO and Chief Legal Officer (who acts as secretary of the Board of Directors) attend the meetings of the Board of Directors. Other management attends the meetings when necessary or upon invitation by the Board of Directors. The Chairman of the Board approves the agendas of the meetings of the Board of Directors. The agendas are prepared by the CEO and the Chief Legal Officer.
An annual clock, according to which the regular subjects to be handled are determined, is applied in the Board´s work. In addition to the regular subjects of the annual clock, the most important subjects of the Board during the year were seeking for both organic and inorganic growth and focusing R&D investments.
The Annual General Meeting decides on the compensation of the members of the Board of Directors and the compensations can be publicly reviewed on the Company's website at www.bittium.com.
In the Company, diversity is seen as an essential part of corporate responsibility and as a factor in success, that enables achievement of strategic targets and continuous improvement of customer intimacy.
In planning the composition of the Board of Directors, the requirements of the Company´s business operations, the phase of development and the competence requirements of the Board committees are taken into account. In appointing members of the Board the target is to ensure that the Board as a whole supports the development of the Company´s current and future business operations. Diversity plays a part in supporting this goal, so the Company aims to reach a situation where the facts supporting diversity are taken into account as significant criteria in planning the composition of the Board of Directors.
Diversity is considered from different perspectives. From the Company´s point of view it is important to have Board members with diverse backgrounds in terms of competence, training, and experience of differing business operations, of varying stages of business development, and of leadership as well as diverse personal characteristics. Experience of international business environments and different cultures in addition to consideration of age and gender will support the diversity of the Board. The objective is that both genders are represented in the Board and the Company aims to maintain a good and balanced distribution of genders.
To fulfill the diversity principles, the principles are taken into account in the process to find and assess member candidates and representatives of both genders are looked for to the process. The status of diversity and progress of the goal mentioned above is monitored in the self-assessment discussions of the Board. A person elected as a Board member of the Company must have the competence required for the position and be able to devote a sufficient amount of time for the duties required. In forming the composition of the Board long-term needs and successor planning will be taken into account.
According to the Articles of Association, the Board of Directors comprises three to seven (3–7) members and in addition it may have one to three (1–3) deputy members. The composition of the Board and the number of members shall be such that they enable the Board to perform its duties efficiently. The members of the Board are appointed annually at the Company´s Annual General Meeting.
During the financial period of January 1, 2017–December 31, 2017, the Board of Directors has comprised five members until the Annual General Meeting held on April 12, 2017 and six members thereafter, and one of the members has been female during the whole financial period. The self-assessment discussions of the Board have concluded that the members of the Board are so different in their special skills, backgrounds and age and gender that the Board as a whole has therefore been able to effectively support the business of the Company and its development.
Board of Directors' Schedule and Agenda Items
HYR: Half Year Reports JM: Joint Meeting with management team
b. 1952, M.Sc. (EE), eMBA Full-time occupation: Mevita Invest Oy, CEO
shares in Bittium Corporation. Independent as regards to the Company and its significant shareholders.
b. 1963, LL.M. Master of Laws
Full-time occupation: Professional Board Member
Holdings Dec. 31, 2017: Holds 3,618 shares in Bittium Corporation. Independent as regards to the Company and its significant shareholders.
b. 1952, M.Sc. Physical Chemistry Full-time occupation: Professional Board Member
Holdings Dec. 31, 2017: Holds 2,871 shares in Bittium Corporation. Independent as regards to the Company and its significant shareholders.
From left to right: Staffan Simberg, Juha Putkiranta, Kirsi Komi, Seppo Mäkinen, Erkki Veikkolainen and Tero Ojanperä.
b. 1966, Ph.D. Full-time occupation: Silo Al Oy, Managing Director and Co-Founder
Holdings Dec. 31, 2017: Holds 1,500 shares in Bittium Corporation. Independent as regards to the Company and its significant shareholders.
b. 1957, M.Sc. Engineering Full-time occupation: Saafricon Oy, CEO
Holdings Dec. 31, 2017: Holds 12,871 shares in Bittium Corporation. Independent as regards to the Company and its significant shareholders.
Full-time occupation: Professional Board Member, Management Consultant
Holdings Dec. 31, 2017: Holds 2,871 shares in Bittium Corporation. Corporation controlled by Simberg NEZ-Invest AB holds 50,000 shares in Bittium Corporation. Independent as regards to the Company and its significant shareholders.
The proper function of the corporate governance of a company requires that Board work is organized as efficiently as possible. For this reason, the Company has established an Audit Committee.
The Directors on the Committee can concentrate on the matters delegated to the Committee more extensively than the entire Board of Directors. The purpose of the Committee is to enhance the efficient preparation of matters within the competence of the Board, increase transparency and ensure the quality and efficiency of the decision-making of the Board.
The Committee assists the Board by preparing matters falling within the competence of the Board. The Board remains responsible for the duties assigned to the Committee. The Committee has no autonomous decision-making power, and thus the Board makes the decisions within its competence collectively.
The Committee shall regularly report on its work to the Board. The reports shall include at least a summary of the matters, addresses and measures taken by the Committee.
The central duties and operating principles of the Audit Committee are described below. The Annual General Meeting decides on the compensation of the members of the Board Committee and such compensations can be publicly viewed on the Company's website at www.bittium.com.
The Audit Committee has the following duties:
The Chairman and the members of the Audit Committee are appointed by the Board of Directors of the Company. At least one Committee member must be a financial expert who has significant knowledge and experience in accounting and accounting principles applicable to the Company. The Board of Directors elected in the Annual General Meeting held on April 12, 2017 decided in its assembly meeting held on the same day to elect Mr. Staffan Simberg (Chairman of the Committee) and Ms. Kirsi Komi as members of the Audit Committee. All members of the Committee are independent from immediate interest of both the Company and its significant shareholders and they have long term experience in business management. The Board of Directors decided further in its same meeting to invite authorized public accountant Seppo Laine as external advisor of the Board of Directors.
In addition to Committee members, other regular participants to the committee meetings are CEO, CFO and CLO who acts as the Committee's secretary and optionally external auditors. Further, the Committee members may meet the external auditors without the operative management being present in such meetings. In 2017, the Audit Committee convened six (6) times to ordinary meetings. The Committee has evaluated, prepared and reviewed, inter alia, the following subject matters during the financial period of January 1, 2017–December 31, 2017:
During 2018 the Committee's focus areas are:
Chief Executive Officer, 2015–. b. 1966, M.Sc. (Econ.)
• Technology Industries of Finland, Member of the Board, 2017–.
Holds 10,000 shares in Bittium Corporation.
The CEO is in charge of the operative management of the Company in accordance with the Finnish Companies Act, the Articles of Association as well as the instructions and orders given by the Board of Directors. The CEO is responsible for the preparation of the Board meetings and implementation of any decisions made therein. Further, the CEO is responsible for ensuring that the Company´s accounting methods comply with the applicable law and that the financial matters are being handled in a reliable manner. The CEO prepares strategy, long-term planning, investments, mergers and acquisitions, financing and makes decisions thereof to the extent that such decisions are not tasks of the Board of the Directors. The CEO is responsible for financial planning, the Company´s communications and investor relations.
The Board of Directors defines and approves the essential terms of the service of the CEO, including the CEO´s remuneration, in the form of a written agreement. The CEO´s service contract is effective until further notice and can be terminated by the Company with twelve (12) and the CEO with six (6) months´ written notice.
The CEO is entitled to a work pension under the Contracts of Employment Act and other legislation pertaining to pensions and he does not have supplementary pension. The Finnish employee pension system (TyEL) entitles to work pension that is based on such income during the career that entitles to work pension. Persons born in 1954 and before it can retire to old age pension at the age of 63 at the earliest. The pension age of persons born in 1955 or thereafter rises evenly three months in a year until the pension age of 65 is reached. The lower limit of the pension age for persons born in 1962–1964 is 65 years. The pension age of persons born in 1965 or thereafter is bound to the expectancy of lifetime.
The management group supports the CEO in his tasks and consists of the CEO as the chairman, CFO, Chief Legal Officer, Director Corporate Communications and Marketing, Directors responsible for product and service areas and Vice President responsible for Engineering. The management group supports the CEO in operative management, implementation and follow-up of the CEO´s competence area, in particular as regards the operative business, the management and development of the business portfolio, asset management and taxation, internal audit, Corporate Governance of the Company, investor and marketing communications and risk management.
Director, Corporate Communications and Marketing, 2015–. b. 1977, M.A. International Business Communications
Holds 1,600 shares in Bittium Corporation.
Vice President, Engineering, 2015–. b. 1968, M.Sc. (ME)
Holds 7,000 shares in Bittium Corporation.
Chief Legal Officer, 2014–. b. 1969, LL.M., trained on the bench, Mag.Iur. (Saarbrücken)
Holds 1,100 shares in Bittium Corporation.
Chief Financial Officer, 2015–. b. 1967, M.Sc. (Econ.), LL.M.
Holds 3,000 shares in Bittium Corporation.
Senior Vice President, Connectivity Solutions & Head of Technology Development, 2016–. b. 1966, M.Sc.
• Health Innovation Academy Oy, Deputy Member of the Board, 2014-.
Holds 2,000 shares in Bittium Corporation.
Senior Vice President, Medical Technologies, 2016–.
b. 1958, M.Sc. (Applied Electronics)
Holds 80,000 shares in Bittium Corporation.
Senior Vice President, Defense & Security, 2016–. b. 1966, M.Sc. (Electrical Engineering, Digital Communications)
•Bittium Corporation,
Holds 27,500 shares in Bittium Corporation.
The Company shall have one (1) auditor that has qualified as Certified Public Accountant, and if the auditor is not an auditing company as defined by the law, one (1) deputy auditor shall be elected. The term of office of the auditor expires at the end of the following Annual General Meeting.
The General Meeting 2017 re-elected Ernst & Young Oy, authorized public accountant firm, as auditor of the Company. Ernst & Young Oy has notified that Mr. Juhani Rönkkö, CPA, will act as the responsible auditor. The remuneration to the auditor shall be paid against the auditor´s reasonable invoice.
The auditor´s fees in 2017 amounted to EUR 133,000 (EUR 206,000 in 2016). Of the aggregate fees, EUR 93,000 was attributable to auditing (EUR 55,000 in 2016), EUR 29,000 to tax advice (EUR 40,000 in 2015) and EUR 11,000 to other services (EUR 110,000 in 2016).
The purpose of risk management is to secure positive development of earnings of the Company and the continuation of the business by implementing risk management cost-effectively and systematically throughout the different businesses.
Risk management is part of the Company´s strategic and operative planning, daily decision making process and internal control system. Business objectives, risks and risk management operations are combined through risk management as one chain of events.
Company adheres to the risk management policy approved by the Board.
Risk management contains all actions, which are connected to setting up targets, identification of risks, measurement, review, handling, reporting, follow-up, monitoring and reacting to risks.
In connection with the strategy process and annual planning the CEO reviews business risks which could endanger the achievement of strategic or financial targets. Risk assessment reports are produced to support the strategy process. Strategic and operative risks are monitored through monthly reporting by businesses in the Board of the Company. Businesses must produce assessments of risks in their designated areas of responsibilities and provide action plans to manage risks as well as to report on measures taken including the stage and effectiveness of such measures.
Internal control is a process applied by the Board of Directors, management and all levels of personnel in the Company to ensure that management has reasonable assurance that:
The first category addresses the basic business objectives, including performance and profitability goals, strategy, implementation of objectives and actions and safeguarding resources. The second category relates to the preparation of reliable published financial statements, including half year financial reports and condensed financial statements and selected financial data derived from such statements, such as earnings releases, reported publicly. The third category deals with complying with those laws and regulations to which the Company is subject to.
Bittium's internal control framework consists of:
effective control environment at all organizational levels including control activities tailored for defined processes and creating group minimum requirements for product and service areas as well as for geographical areas;
shared ethical values and strong internal control culture among all employees; and
Risk management procedures are in place for business processes in the form of defined control points:
Control activities are the policies and procedures that help ensure that management directives are carried out. They help ensure that necessary actions are taken to address risks to achievement of the Company´s objectives. Control activities are set throughout the organization, at all levels and in all functions. They include various range of activities including but not limited to approvals, authorizations, verifications, reviews of operating performance, securing of assets and segregation of duties.
The Company's external financial reporting process, internal control and risk management systems are briefly described in this section. The main focus is on financial accounting and related controls.
The financial management of the Company is responsible for organizing the accounting, money transactions and other daily financial operations of the companies belonging to it as well as organizing the internal reporting that supports the business.
The tasks of the Company´s financial administration consist of, inter alia, monthly consolidation of the Group entity, preparation of half-year financial reports and consolidated financial statements, management and investment of monetary assets of the Group, management of liabilities, protection against exchange risk, and transfer pricing. The finance function of the Company implements operative supervision under the CFO who reports any supervisory findings to the Audit Committee. The tasks and responsibilities of the accounting function of the parent company and each subsidiary are included in the job descriptions of the teams and employees.
Consolidated financial statements are prepared by using the chosen consolidation tool. The accounting of the Group's subsidiaries is done by using the local accounting systems from which the actual figures are reported either manually or by automatic transfer to the group consolidation system. The accounting system in use includes general ledger accounting, accounts payables and accounts receivables. Current assets and payroll accounting is organized through various programs or purchased as an outsourced service. Purchase invoices are circulated through electronic invoice processing system. Global forecasts and budgets are prepared by using the forecast and reporting program.
The Company's internal control mechanisms are based on policies, instructions, limited process descriptions, authorization matrix, financial reporting review meetings, and segregation of key accounting duties.
Compliance processes are in place at all levels of the organization to ensure that that all applicable laws, regulations, internal policies and ethical values including sustainability are adhered to. The management and businesses are responsible for following up developments in legislation and regulations in their respective areas and communicating them to the organization. The members of the Management Group are responsible for setting up adequate compliance controls and compliance related training in their units. Chief Legal Officer of the Company coordinates the appropriateness and compliance of the compliance processes.
The key roles and responsibilities regarding the Company's internal control and risk management are defined as follows:
The Board of Directors is ultimately responsible for the administration and the proper organization of the operations of the company. According to good corporate governance, the Board also ensures that the Company has duly endorsed the corporate values applied to its operations. The Board approves the internal control, risk management and corporate governance policies. The Board establishes the risk-taking level and risk bearing capacity of the Company and re-evaluates them on a regular basis as part of the strategy and goal setting of the Company. The Board reports to the shareholders of the Company.
Audit Committee is responsible for the following internal control related duties:
More detailed descriptions how the Audit Committee is fulfilling its monitoring role are defined in the Committee´s annual plan. The Audit Committee reports to the Board of Directors of the Company.
CEO is in charge of the day-to-day management of the Company in accordance with the instructions and orders given by the Board. The CEO sets the ground for the internal control environment by providing leadership and direction to senior managers and reviewing the way they are controlling the business. The CEO is in charge of the risk management process of the Company and its continuous development, allocation of resources to the work, review of risk management policies as well as defining the principles of operation and overall process. The CEO reports to the Board on risk management as part of the monthly reporting. The CEO and the Management Group, which operates under the CEO, are responsible for the management of risks endangering the fulfillment of objectives set for the Company.
The members of the Management Group are responsible for internal control implementation in their responsibility areas. More specific internal control policies and procedures are established within the principles set by the Board and the CEO. Additionally, the members of the Management Group of the subgroup and the Group Management are responsible for implementing risk management practices in planning cycle and daily operations, and ensure the adherence of:
The CFO:
Finance function does not have a separate internal control function. The CFO reports any supervisory findings to the Audit Committee.
The Chief Legal Officer ensures that the Group´s corporate governance practices comply with the law and that legal matters of the Group are handled appropriately, in particular the contractual risks relating to business operations.
The Company has no specific internal audit organization. This is taken into account in the content and scope of the annual audit plan. On the one hand, external auditing focuses on specific areas in turn to be audited, and on the other hand, on separately agreed priority areas.
The Company adheres to the Insider Guidelines for Listed Companies prepared by Nasdaq Helsinki Ltd (previously NASDAQ OMX Helsinki Ltd, OMX Nordic Exchange Helsinki Ltd and Helsinki Stock Exchange), the Central Chamber of Commerce and the Confederation of Finnish Industries. The Company has complemented the Guidelines by its internal insider guidelines. The insider and trading guidelines approved by the Company include regulations on insiders, publication and postponement of publication of inside information, prohibited use of inside information, insider registers, duty of notification of managers´ and their closely associated persons' transactions, and personnel's own trading with the Company's financial instruments. The purpose of the guideline is to explain the content of the guideline published by Nasdaq Helsinki Ltd and other regulations and restrictions relating to the matter, and to unify and coordinate the processing of insider and trading matters within Bittium.
The managers of the Company must comply with the EU Market Abuse Regulation's prohibition on dealing in the Company's financial instruments (closed period).
In accordance with the Company's Board of Directors' decision, the Company has in addition determined certain time periods during which persons taking part in the preparations of the Company's financial reporting, and other persons who have access to information pertaining to the Company's financial status, are prohibited to trade the Company's financial instruments. The purpose of the trade restrictions is to control trading of the Company's financial instruments, and thereby increase trust to the Company and the operation of the securities market. Trading with the Company's financial instruments is completely prohibited for the aforementioned persons for a period of 30 days before the publication of earnings information of the Company. The most common publications are the release of half year report and release of the Company's financial statements. The restriction is applicable also to any possible preliminary information regarding the financial statements and half year report.
Persons included in a project-specific insider register are prohibited from all trading and business transactions until the project has expired or has been publicly announced. If the project falls upon another listed company or may affect the price of the financial instruments of another listed company, the project-specific insiders have no right to trade with such company's financial instruments.
The Company voluntarily maintains on its website a list of the financial instruments owned by the Company's managers or by the institutions operating under the authority of the managers. The list is updated on the last day of each month.
Connectivity to be trusted. www.bittium.com
Bittium / Ritaharjuntie 1, FI-90590 Oulu, Finland / t. +358 40 344 2000 / f. +358 8 343 032 / www.bittium.com
Copyright 2018 Bittium. All rights reserved. The information contained herein is subject to change without notice. Bittium retains ownership of and all other rights to the material expressed in this document. Any reproduction of the content of this document without prior written permission from Bittium is prohibited.
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.