Governance Information • Mar 2, 2015
Governance Information
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| 1. GENERAL PRINCIPLES 2 | |
|---|---|
| 2. MANAGEMENT SYSTEM 2 | |
| 2.1. GROUP LEVEL 2 2.2. BUSINESS DIVISIONS AND LINE FUNCTIONS 4 2.3. ADMINISTRATION OF LEGAL ENTITIES 4 |
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| 3. GENERAL MEETING OF SHAREHOLDERS 4 | |
| 4. BOARD OF DIRECTORS 5 | |
| 4.1. MEMBERS OF THE BOARD OF DIRECTORS AS OF 19 MARCH 2013 5 4.2. INDEPENDENCE OF THE BOARD MEMBERS 5 4.3. MEETINGS OF BOARD OF DIRECTORS AND BOARD'S RIGHT TO RECEIVE INFORMATION 5 4.4. CHARTER OF THE BOARD OF DIRECTORS 5 |
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| 5. COMMITTEES OF THE BOARD OF DIRECTORS 6 | |
| 5.1. MEMBERS OF THE BOARD COMMITTEES 6 5.2. MEETINGS OF THE BOARD COMMITTEES 6 5.3. CHARTERS OF THE COMMITTEES 6 |
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| 6. PRESIDENT AND CEO 8 | |
| 7. OTHER EXECUTIVES 8 | |
| 8. REMUNERATION STATEMENT 8 | |
| 8.1. REMUNERATION PRINCIPLES 8 8.2. REMUNERATION OF THE BOARD OF DIRECTORS 9 8.3. REMUNERATION OF THE PRESIDENT AND CEO AND THE COMPANY'S OTHER EXECUTIVES 9 8.4. MANAGEMENT REMUNERATIONS TOTAL 11 |
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| 9. INTERNAL CONTROL, RISK MANAGEMENT AND INTERNAL AUDIT 12 | |
| 9.1. INTERNAL CONTROL PRINCIPLES 12 9.2. RISK MANAGEMENT IN THE ORION GROUP 12 9.3. CONTROL MEASURES 18 |
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| 10. INSIDER ADMINISTRATION 18 | |
| 11. AUDIT 19 | |
| 11.1. REMUNERATION OF AUDITOR 19 | |
| 12. SHAREHOLDINGS IN ORION CORPORATION OF THE BOARD OF DIRECTORS AND THE EXECUTIVE MANAGEMENT BOARD 20 |
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| 13. INTRODUCTIONS OF THE MEMBERS OF THE BOARD OF DIRECTORS 21 | |
| 14. INTRODUCTIONS OF THE EXECUTIVE MANAGEMENT BOARD MEMBERS 25 | |
The operations and activities of Orion Corporation and its subsidiaries (the Orion Group) are based on compliance with laws and regulations issued thereunder, as well as with ethically acceptable operating practices. The tasks and duties of the different governance bodies of the Group are determined in accordance with legislation and the corporate governance principles of the Group.
In its governance, Orion Corporation follows the Finnish Corporate Governance Code 2010 for companies listed on NASDAQ OMX Helsinki. Orion Corporation deviates from the Code's recommendation No. 22 concerning the election of members to the Nomination Committee, which can also include persons other than members of the Board. The Company considers the exception justified in view of the Company's ownership structure and the potential for flexibility when preparing for the election of the Board members. The Corporate Governance Code is available at www.cgfinland.fi.
This Corporate Governance Statement has been presented in connection with the 2014 Financial Statements of the Orion Group as a separate report from the Report by the Board of Directors. The Governance Statement as well as an up-to-date description of the governance are available on the Company's website, at www.orion.fi.
The management system of the Orion Group consists of the Group-level functions and Business Divisions. In addition, the system includes the organisation of the administration of the legal entities. For the steering and supervision of operations, the Group has a control system for all levels.
The management of the whole Group takes place at the Group level. The following are examples of management of the whole Group at the Group level:
The business operations of the Group take place in Business Divisions. The different Group-level functions provide services to the Business Divisions, each function being responsible for organising its own responsibility area Group-wide.
The parent company of the Group is Orion Corporation, whose shareholders exercise their decision-making power at a General Meeting of Shareholders in accordance with the Limited Liability Companies Act and the Articles of Association. The Company is not aware of any agreements between shareholders other than information on the exercise of voting rights notified to the Company mentioned in connection with listing of the Company's largest shareholders.
The list of the largest shareholders is available on the Company's website at www.orion.fi.
The Board of Directors of the parent company comprises at least five and at most eight members elected by a General Meeting of Shareholders. The term of the members of the Board of Directors ends at the end of the Annual General Meeting of Shareholders following the election. A General Meeting of Shareholders elects the Chairman of the Board of Directors, and the Board of Directors elects the Vice Chairman of the Board of Directors, both for the same term as the other members. A person who has reached the age of 67 may not be elected a member of the Board of Directors.
The Board of Directors manages the operations of the Company in accordance with the provisions of the law and the Articles of Association. The Board of Directors of the parent company also functions as the so-called Group Board of Directors. It handles and decides all the most important issues relating to the operations of the whole Group or any units irrespective of whether the issues legally require a decision of the Board of Directors. The Board of Directors may handle any issue relating to a company or unit of the Orion Group if deemed appropriate by the Board of Directors or the President and CEO of the parent company. The Board also makes sure that good corporate governance practices are followed in the Orion Group. The Board's charter includes a list of key matters to be handled by the Board of Directors.
The Board of Directors has an Audit Committee, a Remuneration Committee and an R&D Committee. The members of the committees are elected from the Board members by the Board of Directors. The designated auditor of the Company's auditor also attends the meetings of the Audit Committee. The committees prepare matters belonging to their sphere of responsibility and make proposals on these matters to the Board of Directors.
In addition to the committees composed of Board members, the Company has a Nomination Committee which can also include persons other than members of the Board.
The President and CEO of the parent company is elected by the Board of Directors. In accordance with the Limited Liability Companies Act, the President and CEO is in charge of the day-to-day management of the Company in accordance with instructions and orders issued by the Board of Directors. In addition, the President and CEO ensures that the bookkeeping of the Company complies with the law and that its asset management is arranged in a reliable way.
The President and CEO of the parent company manages the Group's business operations via the Business Divisions. Accordingly, the executives responsible for the Business Divisions report to the President and CEO. The President and CEO carries out the steering and supervision of the operations of the divisions with the assistance of the Executive Management Board and the Group-level staff functions.
The Executive Management Board includes the President and CEO as Chairman, and other persons appointed by the Board of Directors of the parent company as members. The Executive Management Board assists the President and CEO in decision-making.
The Executive Management Board handles all important issues relating to the whole Group and its units, including all the matters of the Business Divisions or line functions that are to be handled by the Board of Directors of the parent company. However, the President and CEO can, if considered appropriate, decide not to take a matter to the Executive Management Board.
The Group-level staff functions participate in the steering and supervision of the operations of the units belonging to the Group as part of the management and control system. In this task they assist the President and CEO in the management of the Group.
The staff functions are in charge of, among other things, the following Group-level functions: finance, treasury, investor relations, human resources, legal affairs, intellectual property rights, communications, internal audit, insider administration and information management.
The operations of the Group are organised into Business Divisions. Each Business Division is managed by an executive who is responsible for the operations and operative management of the Business Division and who reports to the President and CEO.
The line functions provide function-specific support and services to all Business Divisions within the Group. The responsibilities of the line functions include:
From the point of view of business operations, the Group subsidiaries operate in accordance with the Group's management system. In matters that are not directly subject to any Business Division or line function, the subsidiaries operate in accordance with instructions by the President and CEO of the parent company.
The Annual General Meeting of the Shareholders of Orion Corporation shall be held by the end of May each year on a date decided by the Board of Directors. A shareholder intending to attend a General Meeting of Orion Corporation must be registered as a shareholder in the Company's shareholder register maintained by Euroclear Finland Ltd on the record date of the General Meeting, and the shareholder must submit a notice of attendance to the Company no later than on the date specified in the notice to convene, which can be at the earliest ten days prior to the meeting. A notice to convene a General Meeting of the Shareholders of Orion Corporation shall be published on the Company's website no earlier than two months and no later than three weeks prior to the General Meeting, however at least nine days prior to the record date of the General Meeting of Shareholders.
At a General Meeting of Shareholders a shareholder may vote the number of votes conferred by the shares held on the record date. Each A share of Orion Corporation entitles its holder to twenty (20) votes at General Meetings of Shareholders and each B share one (1) vote. However, exceptionally, a shareholder cannot vote more than 1/20 of the aggregate number of votes from the different share classes represented at the General Meetings of Shareholders.
Decisions at a General Meeting of Shareholders shall be taken through the decision-making process of the Limited Liability Companies Act and the Articles of Association.
The Annual General Meeting of Shareholders shall be presented:
shall decide on:
shall elect:
· the members of the Board of Directors, with the person or persons receiving the most votes from the General Meeting of Shareholders being elected
shall consider:
· Other matters separately mentioned in the convening notice.
| Board of Directors | Born | Education | Main position | |
|---|---|---|---|---|
| Hannu Syrjänen | Chairman | 1951 | B.Sc. (Econ.), Master of Laws | Chairman of the Board of Directors |
| Jukka Ylppö | Vice Chairman | 1955 | M.Sc. (Eng.), M.Sc. (Econ.) | Senior Advisor on development of control systems for industrial electric drives, ABB Corporation |
| Sirpa Jalkanen | Member | 1954 | M.D. | Academy professor |
| Eero Karvonen | Member | 1948 | M.Sc. (Eng.) | Owner and Managing Director of EVK Capital Oy |
| Timo Maasilta | Member | 1954 | M.Sc. (Eng.) | Managing Director of Maa- ja vesitekniikan tuki ry and Tukinvest Oy |
| Mikael Silvennoinen | Member | 1956 | M.Sc. (Econ.) | Executive Chairman of IMS Talent Oy |
| Heikki Westerlund | Member | 1966 | M.Sc. (Econ.) | CEO of Capman Plc |
The holdings in Orion Corporation of the members of the Board of Directors are presented on page 20 of this Statement. Up-to-date information on the holdings in Orion of the members of the Board of Directors is available in the public Insider Register of the Company, at www.orion.fi/insider-register. Biographical details of Directors are presented on pages 21−24 of this Statement. Information updated afterwards about the Directors is available at www.orion.fi.
Based on an evaluation, the Board of Directors has determined that all the members are independent of the Company and its significant shareholders in the manner described in the Finnish Corporate Governance Code.
A new member of the Board of Directors shall at the start of the term of office be familiarised with the Company structure, strategy and different business areas, and the Group's Corporate Governance.
In 2014, altogether 14 Board meetings were held (13 Board meetings in 2013). The average attendance of the members was 100% (100%).
The Board of Directors conducted the most recent self-evaluation in autumn 2014. In the annually made evaluation, the Board assesses, i.a., matters related to the Group's strategy, the Board's operational performance to reach the business goals of the company, the Board's role in establishing the control systems for the Group, the efficiency of the Board meetings, and the Board's working atmosphere.
The Board of Directors has adopted a written charter containing the rules for:
· meeting arrangements
· minutes of the meetings
The mode of operation of the Board of Directors is described in more detail in section 2.1.2. Board of Directors of parent company.
| Board of Directors | Audit Committee | Remuneration Committee |
R&D Committee |
|
|---|---|---|---|---|
| Hannu Syrjänen | Chairman | Chairman | Member | |
| Jukka Ylppö | Vice Chairman | Member | Member | |
| Sirpa Jalkanen | Member | Chairman | ||
| Eero Karvonen | Member | Member | Member | |
| Timo Maasilta | Member | Member | Member | Member |
| Mikael Silvennoinen | Member | Member | Member | |
| Heikki Westerlund | Member | Chairman | Member | Member |
| Matti Kavetvuo | Chairman |
|---|---|
| Kari Jussi Aho | Member |
| Timo Ritakallio | Member |
| Seppo Salonen | Member |
| Hannu Syrjänen | Member |
| Jukka Ylppö | Member |
In 2014, Committee meetings were held as follows:
The role of the committees, according to their charters, is limited to making proposals to the Board, without decision-making authority. A charter has been confirmed by the Board for each committee.
According to its charter, the Audit Committee shall comprise at least three members elected by the Board annually for the term of the Board. The members shall have the qualifications necessary to perform the responsibilities of the committee, and at least one member shall have expertise specifically in accounting, bookkeeping or auditing.
The members shall also be independent of the Company, and at least one member shall be independent of significant shareholders of the Company. The qualifications and the independence are evaluated as provided in the Finnish Corporate Governance Code.
The committee shall meet at least four times per year, and it shall report to the Board.
The committee concentrates particularly on matters pertaining to financial reporting and control in the Orion Group. Its duties include:
According to its charter, the Remuneration Committee shall comprise at least three members elected by the Board annually for the term of the Board. The majority of the members of the committee shall be independent of the Company in the manner described in the Finnish Corporate Governance Code.
The committee shall meet at least twice a year, and it shall report to the Board.
The committee shall handle and prepare matters concerning compensation and remuneration of the management and the personnel of the Orion Group, as well as the nominations of executives appointed by a decision by the Board.
According to its charter, the R&D Committee shall comprise at least three members elected by the Board annually for the term of the Board. The majority of the members of the committee shall be independent of the Company in the manner described in the Finnish Corporate Governance Code.
The committee shall meet at least twice a year, and it shall report to the Board.
The committee shall deal with and evaluate questions concerning research and development within the Orion Group, and make proposals concerning them to the Board.
In addition to the committees composed of Board members, the Company has a Nomination Committee which, deviating from the recommendation of the Corporate Governance Code, can also include persons other than members of the Board. The Company considers the exception justified in view of the Company's ownership structure and the potential for flexibility when preparing for the election of the Board members. The majority of the members of the Committee shall be independent of the Company in the manner described in the Finnish Corporate Governance Code.
According to the Nomination Committee's charter, the members of the committee are appointed by the Board annually for a term ending when the Board has elected the next Nomination Committee. For the appointments, the Board shall hear the views of the largest shareholders in the shareholder register by the number of votes about the composition of the committee. The hearing takes place at a meeting to which the twenty (20) largest registered shareholders by the number of votes shall be invited. Shareholders not entitled to participate in General Meetings on the basis of their shareholdings are, however, disregarded in calculating the largest shareholders.
The committee shall meet when necessary.
The task of the committee is to prepare and present a recommendation to the Board of Directors for the proposal to the Annual General Meeting of shareholders concerning the composition and compensation of the Board. The committee shall inform the Board of its recommendation. The recommendation prepared by the committee shall not be regarded as a proposal by a shareholder to a General Meeting of shareholders. Nor shall the recommendation have any impact on the Board's independent decision-making powers or its right to make proposals to General Meetings of shareholders.
Timo Lappalainen has been the President and CEO of Orion Corporation and Chairman of the Group's Executive Management Board since 1 January 2008. He was born in 1962 and holds a Master of Science degree in Engineering.
The role and responsibilities of the President and CEO are described in more detail in section 2.1.3. President and CEO of the parent company.
| President and CEO of Orion Corporation, Chairman of |
|---|
| Executive Management Board 1) |
| Senior Vice President, Global Sales |
| Senior Vice President, Proprietary Products |
| Senior Vice President, Corporate Functions |
| Senior Vice President, Specialty Products and Fermion |
| Chief Financial Officer, Vice President, Animal Health |
| Senior Vice President, Supply Chain |
| Senior Vice President, Research and Development |
1) Also represents Orion Diagnostica in the Executive Management Board
The employees are represented in the Executive Management Board. Until 31 December 2014, the employee representative was Liisa Remes, Research Assistant. As of the start of 2015, employees are represented by Marko Torppala, Compression Machine Operator.
The holdings in Orion Corporation of the Executive Management Board are presented on page 20 of this Statement. Up-to-date information on the holdings in Orion of the members of the Executive Management Board is available in the public Insider Register of the Company, at www.orion.fi/insider-register. Biographical details of the Executive Management Board members are presented on pages 25−28. Information updated afterwards about the members is available at www.orion.fi.
The role and responsibilities of the Executive Management Board are described in more detail in section 2.1.4. Executive Management Board.
The aims of the remuneration system for Orion Corporation's Board of Directors and executive management are to enhance the Company's competitiveness and long-term financial success, to achieve the Company's targets and strategy, and to increase shareholder value.
According to the decision by the Annual General Meeting in 2014 concerning the annual fees for the term of office of the Board of Directors, the Chairman shall receive EUR 76,000, the Vice Chairman shall receive EUR 51,000 and the other members shall receive EUR 38,000 each. As a fee for each meeting attended, the Chairman shall receive EUR 1,200, the Vice Chairman shall receive EUR 900 and the other members shall receive EUR 600 each. The travel expenses of all Board members shall be paid in accordance with previously adopted practice. The afore-mentioned fees for each committee meeting attended shall also be paid to the Chairmen and to the members of the committees established by the Board.
Of the afore-mentioned annual fees, 60% was paid in cash and 40% in Orion Corporation B-shares, which were acquired to the members during 31 March – 4 April 2014 from the stock exchange in amounts corresponding to EUR 30,400 for the Chairman, EUR 20,400 for the Vice Chairman and EUR 15,200 for each of the other members. The part of the annual fee paid in cash corresponds to the approximate sum necessary for the payment of the income taxes on the fees and was paid on 25 April 2014. The annual fees encompass the full term of office of the Board of Directors.
There are no particular rules relating to ownership of the shares received by the members of the Board of Directors as fees.
| Total remuneration, € |
Number of B-shares received |
|
|---|---|---|
| Hannu Syrjänen, Chairman | 99 150 | 1 375 |
| Jukka Ylppö, Vice Chairman | 68 400 | 922 |
| Sirpa Jalkanen | 51 470 | 687 |
| Eero Karvonen | 52 150 | 687 |
| Timo Maasilta | 53 000 | 687 |
| Mikael Silvennoinen | 47 600 | 687 |
| Heikki Westerlund | 54 200 | 687 |
| Board of Directors total | 425 970 | 5 732 |
The figures comprise the fees for the Board meetings and the Committee meetings.
Up-to-date information on the holdings in Orion of the members of the Board of Directors is available in the public Insider Register of Orion Corporation, at www.orion.fi/insider-register.
The remuneration of the President and CEO is decided by the Board of Directors. His remuneration comprises a monthly salary, a performance-based bonus and a share-based incentive plan. The performance-based bonuses and the share-based incentive plan are based on predefined targets that are confirmed annually by the Board of Directors. The criteria for performance and results are set so that they promote short-term and long-term financial success. The Board of Directors annually evaluates the performance and financial results against the criteria.
The performance-based bonus of the President and CEO can be no more than seven (7) months' salary. The upper limits of the share-based incentive plan are determined as described in '8.3.3. Share-based incentive plans'.
If the service contract of the President and CEO is terminated on the Company's initiative, the notice period is 6 months. If the service contract is terminated on the initiative of the President and CEO, the notice period is 6 months, unless otherwise agreed. The service ends at the end of the notice period. If the service contract is terminated either on the Company's initiative or on the initiative of the President and CEO because of a breach of contract by the Company, the President and CEO will be compensated with a total sum corresponding to
the monetary salary for 18 months, unless otherwise agreed. No such separate compensation will be paid if the President and CEO resigns at his own request for reasons other than a breach of contract by the Company.
The salary, fees, fringe benefits and performance-based bonuses paid to the President and CEO in 2014 totalled EUR 1,365,906 (EUR 1,357,582 in 2013), comprising EUR 452,622 ( (448,777) in salary and fringe benefits, and EUR 913,284 (908,805) in performance-based bonuses for 2013. EUR 358,519 (398,888) of the total bonuses consists of the value of the 15,269 (17,500) Orion Corporation B shares received by the President and CEO on 3 March 2014 as part of the Company's long-term share-based incentive plan. The price per share of these shares was EUR 23.4802 (22.7936), the volume-weighted average quotation of the B share on 3 March 2014.
The retirement age of the President and CEO has been agreed to be 60 years, the target level of the pension being 60%. The pension is based on a defined benefit plan. The 2013 payment for the supplementary pension benefit was EUR 171,892. The 2014 advance payment for the supplementary pension benefit was EUR 263,837.
The remuneration of the other members of the Group's Executive Management Board is decided by the Board of Directors or its Chairman. The remuneration system for these persons comprises a monthly salary, a performance-based bonus and a share-based incentive plan. The performance-based bonuses and sharebased incentive plan are based on predefined targets that are confirmed annually. The criteria for performance and results are set so that they promote short-term and long-term financial success. The Board of Directors annually evaluates the performance and financial results against the criteria.
The maximum performance-based bonus of a member of the Executive Management Board cannot exceed the aforementioned maximum performance-based bonus of the President and CEO. The upper limits of the share-based incentive plan are determined as described in '8.3.3. Share-based incentive plans'.
The salaries, fees, fringe benefits and performance-based bonuses paid for 2014 to the members of the Executive Management Board, including the President and CEO, totalled EUR 6,333,052 (6,014,078), comprising EUR 2,269,797 (2,388,035) in salaries and fringe benefits and EUR 4,063,255 (3,626,043) in performance-based bonuses.
The pensions of the other members of the Executive Management Board are determined by the Employees Pensions Act (TyEL) with the exception of one person, whose retirement age has been agreed to be 60 years, the target level of the pension being 60% of the agreed pensionable salary. A supplementary pension is based on a defined benefit plan.
The Group has two share-based incentive plans in force for the Group's key persons.
The plan that started in 2010 includes earning periods and the Board of Directors annually decided on the beginning and duration of the earning periods in 2010, 2011 and 2012. The Board of Directors decided on the earning criteria and targets to be established for them at the beginning of each earning period. Two earning periods, calendar year 2010 and calendar years 2010–2012, commenced upon implementation of the plan. Two earning periods, calendar year 2011 and calendar years 2011–2013, commenced in 2011 and two earning periods, calendar year 2012 and calendar years 2012–2014, in 2012. A prerequisite for participation in all earning periods and for receipt of reward based on these earning periods was that the key person held the Company's shares as determined by the Board of Directors. The reward under the plan for the one-calendaryear earning periods 2010, 2011 and 2012 was dependent on the Orion Group's operating profit performance and for the three-calendar-year earning periods 2010–2012 and 2011–2013 on the total return on Orion Corporation B shares. Potential reward for earning period 2012–2014 is based on the total return on Orion Corporation B shares.
The plan that started in 2013 includes earning periods and the Board of Directors shall annually decide on the beginning and duration of the earning periods in 2013, 2014 and 2015. The Board of Directors shall decide on the earning criteria and targets to be established for them at the beginning of each earning period. Two
earning periods, calendar year 2013 and calendar years 2013–2015, commenced upon implementation of the plan. Two earning periods commenced in 2014, calendar year 2014 and calendar years 2014–2016. The reward under the plan for the earning period 2013 was based on the Orion Group's operating profit. The potential reward for the earning period 2014 is based on the Orion Group's operating profit and for the earning periods 2013–2015 and 2014–2016 on the total return on Orion Corporation B shares.
The rewards under the plans shall be paid partly in the form of the Company's B shares and partly in cash. Rewards have been paid and potential future ones shall be paid as follows:
| Earning period | Reward paid / potential |
|---|---|
| reward to be paid in | |
| 2010 | 2011 |
| 2011 | 2012 |
| 2012 | 2013 |
| 2010−2012 | 2013 |
| 2013 | 2014 |
| 2011−2013 | 2014 |
| 2014 | 2015 |
| 2012−2014 | 2015 |
| 2013−2015 | 2016 |
| 2014−2016 | 2017 |
The plans include a restricted period during which shares received under the plan cannot be transferred. The dates when the restricted periods end are shown in the table below. For the three-year earning periods, there is no restricted period.
The target group of the plan that began in 2010 consists of approximately 30 people. The total maximum amount of rewards to be paid on the basis of the plan is 500,000 Orion Corporation B shares and a cash payment corresponding to the value of the shares. By 31 December 2014, a total of 365,113 Orion Corporation B shares had been paid as rewards under this plan.
The target group of the plan that began in 2013 consists of approximately 35 people. The total maximum amount of rewards to be paid on the basis of the plan is 500,000 Orion Corporation B shares and a cash payment corresponding to the value of the shares. By 31 December 2014, a total of 81,876 Orion Corporation B shares had been paid as rewards under this plan.
| Earning periods currently in effect | 2014 | 2014−2016 | 2013−2015 | 2012−2014 |
|---|---|---|---|---|
| Start date of earning period | 1 Jan 2014 | 1 Jan 2014 | 1 Jan 2013 | 1 Jan 2012 |
| End date of earning period | 31 Dec 2014 | 31 Dec 2016 | 31 Dec 2015 | 31 Dec 2014 |
| End date of restricted period | 31 Dec 2016 | |||
| Grant date of share rewards | 27 Feb 2014 | 27 Feb 2014 | 20 Mar 2013 | 19 Mar 2012 |
| Fair value of shares at granting, EUR 1) | 24.00 | 24.00 | 20.65 | 16.60 |
| Fair value of reward at grant date, EUR 1) | 12.09 | 6.06 | 4.96 |
1) B share closing price on granting date.
In the Financial Statements 2014 of the Orion Group, the share-based incentive plans are dealt with in Note 4 Employee benefits and auditor's remuneration.
The salaries, remunerations, fringe benefits and bonuses paid to the members of the Board of Directors of Orion Corporation, the President and CEO and the other members of the Group's Executive Management Board for 2014 totalled EUR 6,759,022 (EUR 6,386,368 for 2013).
The Board of Directors of Orion has defined the Company's principles for internal control in the Company. Management practices and management culture are based on compliance with the law and the Articles of Association, and with Orion's values and ethical business practices. Internal control is part of normal steering and management of operations, as described in the management system, and it is supported by risk management, the audit and internal auditing. The aim of internal control is to ensure that operations are efficient and profitable, operational risks are adequately managed, laws and regulations are complied with and information is reliable. It is based on clear setting and monitoring of objectives, and effective and pragmatic risk management.
In practice, the management of each sub unit is responsible for its internal control, and each business unit or function organises internal control in its own unit or organisation in accordance with the principles in the policies and guidelines set at Group level. Key guidelines are included in the Group's Corporate Governance Manual.
Risk management constitutes a significant part of the Orion Group's corporate governance and is an integral part of the Company's responsibility structure, operational control principles, and business operations. The aim is by all applicable means to identify, measure and manage the risks that might threaten the Company's operations and the achievement of the objectives set for the Company, as well as to improve ability to acknowledge such known risks which cannot be completely eliminated.
Risk management is not a separate function but embedded as a natural and normal process within day-to-day business and management.
Overall risk management processes, practical actions and the definition of responsibilities are developed by means of regular risk identification approaches covering the following areas:
Operational risk management also includes project-specific risk management.
Development of new pharmaceuticals involves considerable risks because of the long time spans required by the development work and the inherent uncertainties related to the final outcome, i.e. whether the product can ever be launched in the markets. This strategic risk is managed by the following means:
Proprietary drugs account for a significant proportion of the Group's net sales and earnings. Orion engages in intensive research with the aim of introducing its own new proprietary drugs in markets worldwide. However, the Group cannot guarantee that new products can be introduced in the markets in accordance with expectations. Furthermore, changes can occur in the co-operation with partners, for example due to corporate actions.
The scope of strategic risks also includes the thoroughness of the Company's corporate governance and reporting principles. In line with the Finnish Corporate Governance Code 2010, the Orion Group's explicit corporate governance code inspires public trust in the Orion Group and its management. The trust is based on
transparently published fundamental characteristics and principles of the system, as well as clear definitions of the responsibilities, rights, obligations and reporting relationships of the persons involved.
In addition, the Company enhances the confidence of its stakeholders, such as people affected by its operations, capital markets and its shareholders, by providing open, truthful and consistent information about events, the Company's operations and financial status in a timely manner.
The development of proprietary drugs involves many uncertainties. Typically, only about one in ten research projects that reach the clinical phase is launched in the markets. The main reasons for discontinuing a development project relate to the efficacy and safety of the drug candidate, but also to its health economic added value in comparison with comparable treatments. This is why the pharmacological properties of drugs under development, such as their efficacy and safety, and their health economic benefits, are delineated through phased research. Clinical trials with humans can only be conducted with the approval of regulatory drug authorities.
The pharmacology and safety of a drug candidate are extensively studied using preclinical laboratory models and by monitoring tolerability and adverse effects throughout the clinical trials.
In major research projects, Orion's Board of Directors takes the decision on whether to progress from one research phase to the next. In minor research projects, the decision is taken by the executive management. The decisions are always based on a comprehensive analysis of the accumulated research results and the current market situation. For the marketing authorisation application and the summary of product characteristics (SPC), all phases and results of the research are carefully documented for regulatory approval. In accordance with statutory requirements, the adverse effects of a drug continue to be monitored even after it has been launched.
The financial risks increase as research projects progress to clinical trials in humans. The most expensive phase is the last, Phase III clinical trials, which are multinational and involve hundreds or thousands of patients. Double-blind studies are used to ensure as reliable as possible evidence of the efficacy and safety of the drug. This is why Orion generally shares the high financial risks of Phase III trials by conducting them jointly with another pharmaceutical company that will also be a marketing partner for the drug. Collaboration with external parties also in earlier research phases is, however, an essential part of managing risks. The Company aims to find ways of keeping the number of research projects high enough by sharing their costs and risks and also possible earnings with partners.
A characteristic feature of the pharmaceutical industry is that manufacturers of generic drugs seek to launch into a market at the earliest possible stage their own versions of drugs, which are generally cheaper than the originator company's products. This can be done by, for example, trying to use the courts to invalidate the originator company's patents or other intellectual property rights well before they are due to expire. These actions can result in high litigation and other expenses for an originator company, and may lead to significant losses of sales.
In developing its products, Orion endeavours to protect them as well and extensively as possible, whilst defending its product rights effectively by itself and together with its marketing partners.
In addition to normal price competition, there are many other factors putting downward pressure on the prices of pharmaceuticals, mainly due to decisions by authorities as governments seek to curb the rise in national drug costs. They include generic substitution and reimbursement systems based on reference prices, changes in regulations concerning them, and cuts in drug prices and reimbursement. Parallel imports in the EU area are also depressing prices.
Orion is responding to these challenges by maintaining a sufficiently diverse product range, continuously enhancing cost-effectiveness and allocating its development and sales resources appropriately.
Market-specific operational models are necessarily applied to sales of pharmaceuticals. The traditional way of maintaining an extensive network of sales representatives requires substantial fixed costs. Orion's business operations in Europe are based on its own sales network, and sales elsewhere in the world through partners. This structure is intended to optimise available resources and risk-bearing capacity, in view of the input required for worldwide marketing of own new proprietary products. In some markets, certain product categories are only sold to insurance companies or hospital procurement organisations, based on bidding.
Where Orion has its own sales organisation, sales must be kept sufficiently high to maintain profitability. This generally requires a broad enough product range.
Pharmaceutical manufacturing is subject to regular inspections by the authorities. Pharmaceutical products must be safe and efficacious, and they must meet all quality standards. To comply with statutory requirements, in pharmaceutical production close attention must be paid to various safety and quality risks.
Adequate quality of pharmaceuticals is ensured through systematic overall management of operations covering all factors with direct or indirect impact on the quality of the drugs. The operations are directed with comprehensive instructions and adequate control of materials and products before and after production.
Orion's currently high production capacity utilisation rate and its broad product range may cause risks to the delivery reliability and make it more challenging than before to maintain the very high quality standard required. Authorities and key customers in different countries undertake regular and detailed inspections of development and manufacturing of drugs. Possibly required corrective actions may at least temporarily reduce delivery reliability.
The pharmaceutical sector is subject to some special regulations and close regulatory control by authorities. Pharmaceutical manufacture, distribution and research require licences from authorities. The pharmaceutical sector is also overseen by the competition authorities. Orion has clear policies and principles for its operations that ensure compliance with these regulations.
Intellectual property rights are inherently of crucial importance to the pharmaceutical sector. To protect Orion's position, the patent situations of its products available for sale and in the pipeline are continuously monitored worldwide. This is done to ensure the rights to products developed by Orion can be defended and to prevent Orion itself from infringing patents or other intellectual property rights of others.
Patent protection is nevertheless of limited duration, and the expiry of patent protection on an important product can have a negative impact on the Orion Group's operations, financial position or operating results. Nor does Orion have guarantees that patent protection will be obtained for new products in the pipeline to the desired extent or that the authorities will grant the marketing authorisations required for the products.
As explained in the description of research and development risks above, the launch of a new drug in markets is preceded by extensive phased trials that delineate the drug's pharmacological properties, such as its efficacy and safety. Marketing authorisation issued by drug authorities is required to start sales and marketing of a drug.
The adverse effects of a drug are monitored as required by the authorities even after the launch of the product. Through the trials and pharmaceutical production methods described above, Orion strives to ensure in advance that its products do not have any adverse effects such as might lead to a liability to pay compensation or to withdrawal of a major product from markets.
As cover for the financial impact of product liability risk, the Orion Group's products and operations are insured through operational and product liability insurance that also covers clinical studies, except for clinical studies carried out in the United States or Canada. Studies conducted in the United States and Canada are insured through separate insurances. The purpose of the insurance is to provide cover for any liability for damages on the part of the policyholder. As is customary in insurance terms, this protection is limited as regards potential
payout, for example. Certain products and active pharmaceutical ingredients are also excluded from the cover, some of which are included in Orion's operations. Nevertheless, they are not estimated to increase Orion's product liability risk materially.
In addition to statutory insurance, Orion has property, business interruption and liability insurance to cover such risks of damage as are deemed to be material and limitable through insurance.
Orion's Corporate Governance Manual includes the Group's corporate safety guidelines. The objective of the Group's corporate safety policy is to ensure the uninterrupted continuation of operations, the safety of people, the protection of property and the environment against damage, and the adequacy of the measures relating to data protection. The corporate safety guidelines set out the principles for corporate safety activities, and also cover guidelines for crisis management. In addition to guidelines, the data protection policy includes the objectives, key principles and responsibilities for data protection.
Information is an essential part of Orion's immaterial capital. For collecting, handling, storage and transmitting data, Orion uses efficient, safe and reliably functioning information systems which, for their part, secure the performance and the continuity of the Group's operations. With compliant information systems Orion also manages its pharmaceuticals business-specific obligations to secure the availability of its medicinal products, pharmacovigilance, and the reliability of drug related information.
The data security risk materialises if the data or the data system is not at the right persons' disposal, the information has changed or ended up in the possession of outsiders. Orion manages the risks concerning information and information management systems by means of regular risk assessments, protection of operational premises and data systems, by practices which strengthen information security and by ensuring the employees' awareness of the risks and threats concerning data security.
The Group's environmental protection guidelines include detailed instructions and responsibilities. Persons responsible for development and monitoring of environmental issues have been appointed for each unit of the Group. Environmental impacts are monitored through, for example, emissions measurement, waste quantity control and statistics on the consumptions of various raw materials. The implementation of environmental protection is monitored through annual internal audits. The Company has the valid environmental permits required for its operations.
Orion endeavours to expand its operations by purchasing from other pharmaceutical companies or in-licensing products that are under development or already available in markets, or possibly by acquiring other pharmaceutical and biotechnology companies. In carrying out such projects, Orion strives to observe due care and diligence and to utilise both internal and external expertise in the planning and implementation phases, as well as when integrating acquired operations within the overall business.
Product procurement and possible corporate acquisitions can involve customary corporate acquisition liabilities or risks as well as other liabilities and risks connected with the nature and value of the purchased assets.
Orion's success depends on the competence of its executive management, R&D staff and other personnel. Human resources management strives to promote well-being at work and continuous improvement of competence and the workplace. Orion's success also depends on the Company's ability to recruit, develop, train, motivate and retain professionally skilled personnel.
The objective of the Group's financial risk management is to decrease the negative effects of market and counterparty risks on the Group's profit and cash flow and to ensure sufficient liquidity. The Group's most important financial risks are foreign exchange risk and counterparty risk.
The main principles for financial risk management are described in the Group Treasury Policy approved by the Board of Directors. The treasury management team is responsible for implementation of the Treasury Policy. Treasury activities are centralised in the Group's treasury department.
The Group is exposed to market risks related to foreign currency exchange rate, interest rate and electricity price. In addition, the Group has some price risk related to equities.
The Group's foreign currency exchange rate risk consists of transaction risk and translation risk.
Transaction risk arises from operational items (such as sales and purchases) and financial items (such as loans, deposits and interest flows) in foreign currency in the statement of financial position, and from forecast cash flows over the upcoming 12 months. Transaction risk is monitored and hedged actively. The largest foreign currency exchange risk in terms of value is posed by sales based on US dollars. Since the recent volatility and weakening of the Russian rouble, its significance for the Group's foreign exchange risk has increased. Other significant currencies are the British pound, the Japanese yen, the Norwegian krona, the Polish zloty and the Swedish krona. As regards these currencies, no individual currency has a significant effect on the Group's overall position.
In accordance with the Treasury Policy, items based on significant currencies in the statement of financial position are normally hedged 90–105% and the forecast cash flows over the upcoming 12 months 0–50%. Currency derivatives with maturities up to 12 months are used as hedging instruments. The positions of operational items are presented in the table in Note 24.1.1 of the Financial Statements 2014.
The Group's internal loans and deposits are denominated in the local currency of the subsidiary and the most significant ones are fully hedged with currency swaps.
The fair value changes of the currency derivatives are recognised through profit and loss in either other operating income and expenses or finance income and expenses depending on whether, from an operational perspective, sales revenues or financial assets and liabilities have been hedged.
Translation risk arises from the equity of subsidiaries outside the eurozone. At 31 December 2014 the equity in these subsidiaries totalled EUR 65.9 (2013: 59.1) million. The most significant translation risk arises from the British pound. The translation position has not been hedged.
The effect of changes in foreign currency exchange rates on the Group's results (before taxes) and equity at the reporting date is presented for the EUR/USD exchange rate in the table in Note 24.1.1 of the Financial Statements 2014. The assumption used in the sensitivity analysis is a +/- 10% change in the exchange rate (USD depreciates/appreciates by 10%) while other factors remain unchanged. In accordance with IFRS 7, the sensitivity analysis includes only the financial assets and liabilities in the statement of financial position, and so the analysis does not take into account the forecast upcoming 12-month foreign currency cash flow included in the position. The potential translation position is not taken into account in the sensitivity analysis.
The price risk refers to the risk resulting from changes in electricity market prices. The market price of electricity fluctuates greatly due to weather conditions, hydrology and emissions trading, for example. The Group obtains its electricity through deliveries that are partly fixed-price contracts and partly tied to the spot price of the price area of Finland, and in the latter case is therefore exposed to electricity price fluctuation. The price risk is partially hedged using standard electricity derivatives quoted on Nord Pool as hedging instruments.
The nominal values of the derivatives totalled EUR 0.9 (2013: 2.5) million. Nord Pool's closing prices are used for market valuation of derivatives. The Group does not apply hedge accounting under IAS 39.
Changes in interest rates affect the Group's cash flow and results. At 31 December 2014, the Group's interestbearing liabilities totalled EUR 234.5 (2013: 257.8) million. The Group is exposed to interest rate risk associated with long-term loans raised from the European Investment Bank. At 31 December 2014, the nominal value of these loans with interest rates tied to the Euribor rate totalled EUR 83.0 (2013: 106.0) million. EUR 15.2 million of these loans has been hedged with an interest rate swap for which Orion pays fixed-rate interest.
The effect of an interest rate rise on net interest expenses has been estimated through a sensitivity analysis in which interest rates are assumed to rise in 2015 in parallel by one percentage point (1%) compared with market interest rates at the end of the reporting period while other factors (including liabilities) remain unchanged. The estimated interest expenses of the Group would then rise by EUR 0.7 million in 2015 (before taxes). The Group's exposure to a rise in market interest rates is reduced because the Group's money market investments, which at 31 December 2014 totalled EUR 79.0 (2013: 27.0) million, are invested in short-term interest-bearing instruments.
Cash flow hedge accounting under IAS 39 is applied to the loans hedged with interest rate derivatives. At 31 December 2014 a fair value valuation of EUR -0.1 (2013: -0.2) million (before taxes) for interest rate derivatives was recognised in the equity. The nominal values of these interest rate derivatives totalled EUR 15.2 (2013: 18.8) million. In 2014 EUR -0.1 (2013: -0.1) million due to interest rate derivatives was recognised in net interest expenses.
Counterparty risk is realised when a counterparty to the Group does not fulfil its contractual obligations, resulting in non-payment of funds to the Group. The maximum credit risk exposure at 31 December 2014 is the total of financial assets less carrying amounts of derivatives in financial liabilities, which totals EUR 446.6 (2013: 386.5) million. The main risks relate to trade receivables as well as cash and cash equivalents and money market investments.
The Group Treasury Policy defines the requirements for the creditworthiness of the financial institutions acting as counterparties to Group companies. Limits have been set for counterparties on the basis of creditworthiness and solidity, and they are regularly monitored and updated. Money market investments are made mainly in interest-bearing instruments with duration up to six months that are tradable in secondary markets.
The Group Customer Credit Policy defines the basis for classifying customers and setting limits for them, and the ways through which the credit risk is managed. Payment performance and the financial situation of customers are monitored, and effective collection is regularly undertaken. Credit risk can be reduced by requiring advance payment, a letter of credit or a bank guarantee as a payment term, or by using credit insurance. In the pharmaceutical industry trade receivables are typically generated by distributors representing different geographical areas. In certain countries, products are also sold directly to local hospitals. The most significant individual customer groups are Novartis, a marketing partner in pharmaceutical sales, and Oriola and Phoenix, pharmaceuticals distributors, and sales to them exceed 10% of the Group's net sales. They are customers of the Pharmaceuticals business. The trade receivables are not considered to involve significant risk. Credit losses for the period recognised through profit and loss were EUR 0.2 (2013: 0.4) million.
The Group seeks to maintain a good liquidity in all conditions. In addition to cash flows from operating activities and cash and cash equivalents and other money market investments, the liquidity is ensured by EUR 100 million of committed undrawn bilateral credit limits that will mature in 2017. In addition to this, the Group has undrawn bank overdraft limits and a EUR 100 million unconfirmed commercial paper programme from which no commercial papers had been issued on the reporting date.
The Group's interest-bearing liabilities at 31 December 2014 were EUR 234.5 (2013: 257.8) million. The average maturity for interest-bearing liabilities excluding finance lease liabilities is three years and nine months. At 31 December 2014 the Group's cash and cash equivalents and money market investments, which decrease liquidity risk, totalled EUR 258.5 (2013: 214.7) million. To ensure the Group's liquidity, surplus cash is invested mainly in short-term euro-denominated interest-bearing instruments with good creditworthiness that are tradable in secondary markets. An investment-specific limit is determined for each investment.
Forecast cash flows of financial liabilities and interest payments are presented in the table in Note 24.3 of the Financial Statements 2014.
The financial objectives of the Group include a capital structure related goal to maintain the equity ratio, i.e. equity in proportion to total assets, at a level of at least 50%. This equity ratio is not the Company's opinion of an optimal capital structure, but rather part of an aggregate consideration of the Company's growth and profitability targets and dividend policy.
The terms of loans from financial institutions of the Company include covenants that specify that if the covenants are breached, the lender optionally has the right to demand early repayment of the loan. The tables presented in Note 24.4. of the Financial Statements 2014 show the levels of financial covenants specified in the terms of the loans and the corresponding values at 31 December 2014.
For financial steering and reporting, the Group has a reporting system intended to provide the management sufficient and timely information to plan and manage the operations. Orion has Group-wide guidelines and supporting policies for financial steering and harmonising practices. The guidelines and the Company's extensive enterprise resource planning system ensure uniformity in processes. The Group's finance department handles financing, Group accounting and tax affairs centrally. In addition, finance personnel in subsidiaries, and the centralised Controller function ensure uniform practices in every country and business area.
Orion's efficient and uniform processes are based on the integrated enterprise resource planning system. For steering of operations, monthly financial reports are produced presenting actual results achieved, a comparison of actual results with targets, and a forecast of future development. Orion also uses numerous indicators in target setting and follow-up in various functions to aid supervision and steering of operations in accordance with the objectives set.
The Audit Committee of the Board of Directors evaluates the effectiveness of the Company's internal control and is responsible for evaluating the effectiveness of the internal reporting process. The external audit of the Group companies is carried out in accordance with the applicable laws and the Articles of Association.
The objective of the statutory audit is to verify that the financial statements and the report of the Board of Directors give a fair and adequate presentation of the results of the operations and the financial position of the Group. The audit also includes auditing of the Company's accounting and administration. The designated auditor of the parent company's auditor co-ordinates the audit of the subsidiaries of the Group in co-operation with the President and CEO and the Internal Audit of the Group.
For the purpose of the supervision and steering of operations, the Group has an internal audit function which functions administratively subordinate to the President and CEO of the parent company and reports in its work to the Audit Committee. The central task of the internal audit is to examine and evaluate the effectiveness and credibility of the internal control and risk management of the companies and units belonging to the Group.
The Orion Group follows the insider guidelines issued by NASDAQ OMX Helsinki Oy, on which the Group's own Guidelines for Insiders are based. The Group's permanent insiders comprise the insiders with the duty to declare their holdings in Orion's public insider register and other persons defined by the Company as permanent company-specific insiders in accordance with the Company's own insider register. The insiders with the duty to declare comprise the members of the Board of Directors of Orion Corporation, the President and CEO, the designated auditor, and the members of the Executive Management Board. The permanent company-specific insiders are persons that the Company has decided are permanent company-specific insiders.
The Company maintains its insider register in the SIRE system of Euroclear Finland Ltd.
Up-to-date information on the holdings of the Company's insiders with the duty to declare is available in the public Insider Register of the Company, at www.orion.fi/insider-register.
Orion Corporation shall have one auditor, which shall be an Authorised Public Accountants Organisation. The term of the auditor shall be the financial period. The duties of the auditor shall terminate at the close of the Annual General Meeting of the Shareholders following the election.
For the financial year 2014, the auditor of Orion Corporation is PricewaterhouseCoopers Oy, Authorised Public Accountant Firm, the designated auditor being Janne Rajalahti, Authorised Public Accountant.
The fees to the auditors are paid against invoicing accepted by Orion Corporation.
In 2014 and 2013, the auditors were remunerated for their services as follows:
| EUR | 2014 | 2013 |
|---|---|---|
| Auditing | 247 020 | 242 015 |
| Assignments in accordance with the Auditing Act | 35 992 | 30 234 |
| Advice on taxation | 82 337 | 22 271 |
| Other services | 29 005 | 29 782 |
| Total | 394 354 | 324 302 |
| A shares | Change from 1 Jan 2014 A |
B shares | Change from 1 Jan 2014 B |
A and B total |
% of total shares |
% of total votes |
|
|---|---|---|---|---|---|---|---|
| Hannu Syrjänen | 10 000 | 0 | 11 710 | 1 375 | 21 710 | 0.02 % | 0.02 % |
| Jukka Ylppö | 1 247 136 | 0 | 296 440 | 922 | 1 543 576 | 1.09 % | 2.78 % |
| Sirpa Jalkanen | 0 | 0 | 5 602 | 687 | 5 602 | 0.00 % | 0.00 % |
| Eero Karvonen | 546 200 | 0 | 25 865 | 687 | 572 065 | 0.40 % | 1.20 % |
| Timo Maasilta | 21 928 | 0 | 2 456 | 687 | 24 384 | 0.02 % | 0.05 % |
| Mikael Silvennoinen | 0 | 0 | 687 | 687 | 687 | 0.00 % | 0.00 % |
| Heikki Westerlund | 0 | 0 | 4 265 | 687 | 4 265 | 0.00 % | 0.00 % |
| Board of Directors total | 1 825 264 | 0 | 347 025 | 5 732 | 2 172 289 | 1.54 % | 4.05 % |
The figures include the shares held by organisations and foundations controlled by the person.
| A shares | Change from 1 Jan 2014 A |
B shares | Change from 1 Jan 2014 B |
A and B total |
% of total shares |
% of total votes |
|
|---|---|---|---|---|---|---|---|
| Timo Lappalainen | 0 | 0 | 52 519 | 15 269 | 52 519 | 0.04 % | 0.01 % |
| Satu Ahomäki | 0 | 0 | 14 461 | - 4 365 | 14 461 | 0.01 % | 0.00 % |
| Markku Huhta-Koivisto | 0 | 0 | 13 985 | - 2 365 | 13 985 | 0.01 % | 0.00 % |
| Olli Huotari | 0 | 0 | 28 706 | 5 983 | 28 706 | 0.02 % | 0.00 % |
| Liisa Hurme | 0 | 0 | 19 382 | - 943 | 19 382 | 0.01 % | 0.00 % |
| Jari Karlson | 0 | 0 | 27 251 | 5 983 | 27 251 | 0.02 % | 0.00 % |
| Virve Laitinen | 0 | 0 | 9 393 | - 190 | 9 393 | 0.01 % | 0.00 % |
| Reijo Salonen | 0 | 0 | 28 082 | - 6 618 | 28 082 | 0.02 % | 0.00 % |
| Executive Management Board total |
0 | 0 | 193 779 | 12 754 | 193 779 | 0.14 % | 0.02 % |
The figures include the shares held by organisations and foundations controlled by the person. The employee representative in the Executive Management Board is not included in the public insiders of the Company.
B. Sc. (Economics), Master of Laws b. 1951
2001– 2010 President and CEO and Chairman of the Executive Management Group of Sanoma Corporation
1999–2001 Member of the Executive Management Group of SanomaWSOY
1989–2001 President and CEO, Vice President, and Executive Vice President and Deputy CEO of Rautakirja Corporation.
Previously Mr. Syrjänen served as Vice President at the TS Group, Vice President at Wihuri Oy, and Managing Director of Finnish Lawyers' Publishing Oy
Chairman of the Board of Directors: Orion Corporation 2010– , VR Group Ltd 2011–, EDSA s.a.r.l. 2012–, Lehtipiste Ltd. 2014–
Member of the Board of Directors: Orion Corporation 2007–, Realia Group Oy 2011–, The Finnish Fair Corporation 2012–, John Nurminen Foundation 2012–
Chairman of the Board of Directors: Federation of the Finnish Media Industry 2002–2006, Ilmarinen Mutual Pension Insurance Company 2004–2011, Management Institute of Finland MIF Oy 2012–2014, Chairman of the Executive Board of the Finnish section of International Chamber of Commerce 2010–2011
Member of the Board of Directors: Employers Confederation of Service Industries 1999–2001, East Office of Finnish Industries 2008–2010, Confederation of Finnish Industries EK 2005–2006, Sanoma Corporation 2001–2010
Vice Chairman
M. Sc. (Eng.), M. Sc. (Economics) b. 1955
Jukka Ylppö has done a long career in the product development organisation of ABB Corporation since 1981:
1999– Senior Advisor in the development of control systems for industrial
electric drives
1996–1998 Head of the development of a control system for a new thyristor
supply unit
1993–1995 Development of new controls for direct-current drives 1991–1992 Automation system development engineer, Västerås, Sweden
1988–1990 Sales engineer of ship automation systems 1986–1987 Project manager of the development of analyzers for paper making
processes 1984–1985 Head of the development of control systems for directcurrent drives
1982–1983 Product development engineer / power electronics
Vice Chairman of the Board of Directors: Orion Corporation 2012–
Member of the Board of Directors: Orion Corporation 2007–
Vice Chairman of the Board of Directors: Orion Corporation 2007 – 24 March 2010
2010–2013 Vice Dean, University of Turku
2008–2013 Director of a Centre of Excellence of the Finnish Academy
2006– Research professor, National Institute for Health and Welfare, THL 2001– Professor of Immunology, University of Turku
2000–2005 Director of a Centre of Excellence of the Finnish Academy
1996–2006 Academy professor
1996– Director, Receptor Programme, University of Turku
1986–1996 Researcher, University of Turku, Academy of Finland, THL
1983–1986 Researcher, Stanford University, USA
Member of the Board of Directors: Orion Corporation 2009–, Emil Aaltonen Foundation 2000–, Tampere University of Technology 2010–
Member of the committee of medical experts of Sigrid Juselius Foundation 2001–
Member of scientific committee of Cancer Institute 2002–
Chairman of Finnish Academy of Science and Letters 2010–2012
Sirpa Jalkanen has published about 250 scientific articles on mechanisms of inflammatory diseases and spreading of cancer. Several related patents granted and pending.
b. 1948
1986– EVK-Capital Oy, Owner and Managing Director 1980–1986 Rintekno Oy, Process Engineer, Division Manager and Technology Manager for biochemical and pharmaceutical process engineering 1975–1980 VTT Technical Research Centre of Finland, Biotechnical laboratory, researcher 1974–1975 Helsinki University of Technology, Senior Assistant in industrial microbiology
Member of the Board of Directors: Orion Corporation 2004–
Member of the Board of Directors: Orion Corporation 1997–2002, Rocla Oyj 2006–2009
Member of the Supervisory Board: Orion Corporation 1988–1997, Instrumentarium Corporation 1996–1999
b. 1954
1993– Managing Director, Maa- ja vesitekniikan tuki ry 1984– Managing Director, Tukinvest Oy 1982–1984 Engineer, Vesi-Pekka Oy 1980–1982 Project Engineer, Vesi-Pekka Oy, Libya
Chairman of the Board of Directors: Maa- ja vesitekniikan tuki ry 1998–, Tuen Kiinteistöt Oy 1985–, Ympäristöviestintä YVT Oy 2001–
Member of the Board of Directors: Orion Corporation 2012–, Tukinvest Oy 1996–
Vice Chairman of Amer Cultural Foundation 2010–
Member of the Board of Directors: Amer Sports Corporation 1986– 2008, Amer Cultural Foundation 1986–2009, Ompus Inc. 1984– 1994
Chairman of the Nomination Committee: Orion Corporation 2004– 2011
Member of the Nomination Committee: Oriola-KD Corporation 2006–2007, 2010–2011
Member of the Supervisory Board: Orion Corporation 1991–2002, Amer Group 1985–1986
M. Sc. (Economics)
b. 1956
2013– Executive Chairman, IMS Talent Oy 1997–2013 President and CEO, Chairman of the Executive Committee, Pohjola Bank Plc 1997 Member of the Executive Board, Head of Capital markets, Pohjola Bank Plc 1994–1997 Head of Investment banking and International affairs, Pohjola Bank Plc 1989–1992 Head of private equity, Pohjola Bank Plc 1988–1989 Group treasurer, Wärtsilä Corporation 1986–1988 Finance manager, Wärtsilä Corporation
1983–1985 Dealer, Wärtsilä Corporation
Member of the Board of Directors: Konecranes Plc 2008–, Orion Corporation 2014–, Hartwall Capital Ltd. 2014–, Metsäliitto Cooperative 2015–
Chairman of the Board of Directors: Pohjola Insurance Ltd 2005– 2012, Pohjola Asset Management Ltd 2005–2012, Helsinki OP Retail Bank Plc 1997–2005
Member of the Board of Directors: Pohjola Group Oyj 2000–2001, Unico Banking Group 1997–2013
b. 1966
2013– CapMan Plc, CEO 2010–2013 CapMan Plc, Chairman 2005–2010 CapMan Plc, CEO 2002–2005 Head of CapMan Buyout team 1994–2002 CapMan, Investment Manager, Investment Director 1990–1994 Finnish Fund for Research and Development SITRA, Investment Analyst, Project Manager 1988–1989 Foresport Oy, Managing Director, entrepreneur
Member of the Board of Directors: Orion Corporation 2010–, Walki Oy 2011–
Member or Chairman of the Board of Directors: Aldata Solution Oyj 1997–2001, AtBusiness Communications Oyj 1997–2003, Finnish Venture Capital Association 2007–2011, Lumene Ltd 2006–2013, Medianorth Group Oy 1999–2004, Nexor Superstore 1995–1998, Satama Interactive 1997–2000
· President and CEO of Orion Corporation, Chairman of the Executive Management Board, as of 1 January 2008
2008– President and CEO, Orion Corporation 2005–2007 Senior Vice President, Proprietary Products and Animal Health 2003–2005 Executive Vice President, Orion Pharma
1999–2003 Senior Vice President, Business Development
1994–1999 Leiras Oy, Vice President, International Marketing and Business Development
1989–1993 Finvest Ltd., Vice President, Business Development and General Manager of Finvest's German unit 1987–1988 Arthur Andersen & Co. (Chicago, USA), Consultant
Chairman of the Board of Directors: Chemical Industry Federation of Finland 2015–
Member of the Board: Confederation of Finnish Industries, EK 2015–, Kemira Oyj 2014–, Chemical Industry Federation of Finland 2008–, Finnish Foundation for Cardiovascular Research 2010–
Member of the Supervisory Board: The Finnish Fair Corporation 2009–
In addition, Timo Lappalainen is a member of the Council of the Helsinki Region Chamber of Commerce.
Vice Chairman of the Board of Directors: Chemical Industry Federation of Finland 2013–2014
Member of the Board of Directors: Vaisala Oyj 2011–2014, ICC Finland 2014
· Senior Vice President, Proprietary Products, as of 1 January 2014
2014– Senior Vice President, Proprietary Products 2006–2013 Senior Vice President, Specialty Products and Fermion 2004–2006 Senior Vice President, Supply Chain, Orion Pharma 2004–2005 President, Fermion Oy
2002–2004 Senior Vice President, Supply Chain, Orion Pharma 2000–2002 Program Director, business processes and information systems, Orion Pharma
1998–2000 Vice President, International Sales, Orion Pharma 1996–1998 Director and Vice President, Materials Management, Orion Pharma
1991–1996 Director, Materials Management, Orion-Farmos Pharmaceuticals
1990–1991 Director and Vice President, Materials Management, Farmos Oy, Pharmaceutical Division
1987–1990 Materials Manager, Farmos Oy
1984–1987 Plant Manager, Farmos Oy
1982–1983 Production Planning Manager, Farmos Oy
1981–1982 Oy Santasalo-Sohlberg Ab, Development Engineer
Member of the Board: Pharmaservice Oy 2011–2014
Member of the Chemical Industry Pool Committee of the National Emergency Supply Organisation, NESO 2006–2007, Member of Health Cluster of the National Emergency Supply Organisation, NESO 2007–2014
· Senior Vice President, Global Sales, as of 1 October 2010
2010– Senior Vice President, Global Sales 2008–2010 Senior Vice President, Animal Health 2006–2007 Head of Business Development 2005 Business Development Director 2000–2004 Project Manager and Program Leader of Hormonal and Urological therapies 1992–1999 Several duties in pharmaceutical R&D
Before joining Orion, Satu Ahomäki worked in accounting in different companies.
2006– Senior Vice President, Corporate Functions 2002– Secretary to the Board of Directors 2005–2006 Vice President, Human Resources, Orion Pharma, and Corporate Vice President, HR development of the Orion Group 2002–2006 General Counsel of the Orion Group 1996–2002 Legal Counsel in Corporate Administration
1992–1995 Law firm Asianajotoimisto Jouko Penttilä Oy, Legal Counsel
In 1995–1996, Olli Huotari completed the degree of Master of Laws in International Commercial Law at the University of Kent at Canterbury, UK.
· Senior Vice President, Specialty Products, and Chairman of the Board of Fermion Oy as of 1 January 2014
2014– Senior Vice President, Specialty Products, and Chairman of the Board of Fermion Oy 2008–2013 Senior Vice President, Proprietary Products 2005–2007 Head of Urology and Oncology business
2004–2005 Program Leader of pharmaceutical development
projects for Hormonal and Urological therapies 2002–2004 Portfolio Manager
2001–2002 Project Manager
1999–2001 Researcher and Project Manager, Hormonal therapies
1995–1999 Pharmacia & Upjohn, Researcher, Diagnostics Unit (Sweden) and Researcher, Development projects at ELIAS GmbH (Germany) and Institute Pasteur (France)
Member of the Board: Pharmaservice Oy 2014–, Finnish Bioindustries FIB 2010–
Member of the Economic & Social Policy Committee of the European Federation of Pharmaceutical Industries and Associations (EFPIA) 2010–, Member of the Healthcare Sector Committee of the National Emergency Supply Organisation (NESO) 2014–
Liisa Hurme completed her doctoral thesis on biochemistry at the University of Helsinki, Faculty of Science, in 1996.
b. 1961
2010– Chief Financial Officer (CFO), Senior Vice President, Animal Health
2002– Chief Financial Officer (CFO) 2001–2002 Orion Pharma, Vice President, Finance
1999–2001 Kuusakoski Group Oy, Vice President, Finance 1990–1999 Genencor International Inc, Controller, Director of Planning for the Europe and Asia region and Director of Finance in Europe
1988–1989 Cultor Oy, Financial controller for the Biochem division
Member of the Board: Elo Mutual Pension Insurance Company 2010–, Finnish Foundation of Veterinary Research 2011–, Polttimo Oy 2012–
· Senior Vice President, Supply Chain, as of 1 January 2012
2012– Senior Vice President, Supply Chain 2007–2011 Director, Business Planning and Control 2001–2006 Manager, Industrialisation and Contract Manufacturing, Supply Chain
1997–2000 Development Engineer, Supply Chain
Until 31 December 2014, the employee representative in the Executive Management Board was Liisa Remes, Research Assistant. As of 1 January 2015, the employees are represented by Marko Torppala, Compression Machine Operator. The employee representative is not a member of the Executive Management Board.
· Senior Vice President, Pharmaceutical Research and Development, and Chief Medical Officer, as of 1 November 2006
2006– Senior Vice President, Pharmaceutical Research and Development, and Chief Medical Officer
2004–2006 Pfizer, Vice President, Neurology, Psychiatry and Ophthalmology and Worldwide Therapeutic Area Head Neurosciences (USA) 2002–2004 GlaxoSmithKline, Vice President, Clinical Development and Medical Affairs, Neurosciences 2001–2002 GlaxoSmithKline, Vice President, Clinical Development, Neurology and GI 1999–2001 GlaxoWellcome, Director, Medical Strategy and Communications in the Neurosciences Therapy Group 1998–1999 GlaxoWellcome, Principal Medical Strategy Head in Neurology and Psychiatry 1997–1998 GlaxoWellcome, Senior Medical Strategy Head, Neurology (USA) 1995–1997 GlaxoWellcome, Country Medical Director (Finland)
Member of the Board of Directors: The Finnish Medical Foundation 2011–, Finnish Foundation for Research on Viral Diseases 2009–
Member: European Brain Council Industry Board 2006–
Member of the Board: European Federation of Pharmaceutical Industries and Associations (EFPIA), Research Directors Group 2007–2012, European Brain Council 2006–2010
Member: University of Turku, External Advisory Board 2010–2013
Reijo Salonen received both his MD degree and PhD (in Neuroimmunology) from the University of Turku in 1983. He is Specialist in Neurology and has been Docent in Neuroimmunology at Turku since 1989. He received the Finnish honorary title of Professor in 2009.
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