Board of Directors

The Annual General Meeting held on 13 April 2023 elected, in accordance with the proposal of the Shareholders’ Nomination Board, Mikael Silvennoinen as Chair, Essimari Kairisto as Deputy Chair, and Ralf Christian, Luisa Delgado, Jonas Gustavsson, Marita Niemelä, Teppo Paavola, Maija Strandberg, Johan Söderström and Vesa-Pekka Takala as members to the Board of Directors. Until the Annual General Meeting 2023, the Board of Directors comprised the following members: Veli-Matti Reinikkala as Chair, Anja McAlister as Deputy Chair, and Ralf Christian, Luisa Delgado, Essimari Kairisto, Teppo Paavola, Philipp Rösler, Annette Stube, and Kimmo Viertola (non-independent of the company’s significant shareholder, the State of Finland) as members.

The Chair, the Deputy Chair and the members of the Board of Directors are all independent of the company and of the company’s significant shareholders, with the exception of Maija Strandberg, who is non-independent of the company’s significant shareholder (the State of Finland). Four of the Board members are female and six are male.

The Board of Directors convened a total of 16 times in 2023, and the attendance rate of the meetings was 89%.

During 2023, the main focus of the board work was on the group’s new strategy and its implementation plans, overall transformation of business operations and organisations, development of risk framework including various short- and long-term risk scenario reviews and a Group Risk Appetite statement, as well as matters on climate change, the directive on corporate sustainability reporting (CSRD) and regulatory environment. Especially during the beginning of the year, the Board was closely monitoring the effects of the European energy crisis caused by Russia’s attack on Ukraine which eventually resulted in the de facto loss of control of the company’s Russian operations. To this end, the Board of Directors established a temporary Russia Committee in April 2023. The members of the committee are Mikael Silvennoinen (Chair), Essimari Kairisto, Ralf Christian and Maija Strandberg. The committee convened a total of 8 times in 2023 and the attendance rate of the meetings was 97%. The Board of Directors established a new permanent board committee for technology and investment-related matters in April 2023. The duty of the Technology and Investment Committee is to evaluate and make recommendations to the board, inter alia, on technologies related to the production of clean energy, electricity and gas, investment proposals and the achievement of sustainability targets.

To further enhance the efficiency of its work, the Board, as part of its work, also conducted the annual self-assessment, including assessment of the committee work.

The Chair of the Board of Directors decides on the agenda for the Board meetings based on the proposal by the President and CEO and /or the secretary to the Board of Directors. The members of the Board of Directors have the right to suggest specific items and have them included on the agenda. More than a half of the members must be present at the meeting to constitute a quorum. The decisions of the Board of Directors shall be made by a simple majority. The work of the Board of Directors is based on a written charter.

The President and CEO, the Chief Financial Officer, and the General Counsel, as secretary to the Board of Directors, all attend the Board meetings on a regular basis. The other Fortum Leadership Team members and senior executives attend meetings as appropriate.

The main duties of the Board of Directors include:

Strategy

• Strategic development and steering of the Group’s business
• Confirming operating principles and group policies, including the Code of Conduct, sustainability policy and risk policy, and overseeing their implementation
• Defining the Group’s values and overseeing their manifestation in the Group’s culture

Supervision and oversight

• Ensuring that the administration and operations of the company are properly organised
• Ensuring that the accounting, financial administration and  risk management of the company are properly organised

Financial and sustainability related matters

• Confirming the business plan on an annual basis
• Setting and following up the performance targets, including financial and
  sustainability related targets, for the Group and its management
• Reviewing and approving interim reports, consolidated financial statements, parent company financial statements and operating and financial review, and the sustainability reporting
• Defining the financial targets, including the dividend policy
• Defining the Group’s investment authorities and deciding on investments,
  divestments and business arrangements in line with the Group’s decision
  authorities

Decisions having effect on the corporate organisation

• Appointing and dismissing as well as deciding on the remuneration of the President and CEO
• Confirming the Group’s organisational structure at the top management level and appointing and dismissing the members of the Fortum Leadership Team and deciding on their remuneration
• Appointing the Chair and Deputy Chair as well as the other members of the company’s Advisory Council

Other

• Convening the Annual General Meeting and the Extraordinary General Meeting, when necessary
• Deciding on charitable contributions

As part of its duties, the Board of Directors also conducts an annual self-assessment in order to further develop its work. In accordance with the Finnish Corporate Governance Code, the Board of Directors also annually evaluates independence of each of its members.

The Board of Directors convenes according to an agreed schedule to discuss specific themes and issues in accordance with its charter. In general, the Chair of the Board of Directors decides on the agenda for the Board meetings based on the proposal by the President and CEO and/or the secretary to the Board of Directors. The members of the Board of Directors have the right to suggest additional items on the agenda. More than a half of the members must be present at the meeting to constitute a quorum. The decisions of the Board of Directors shall be made by a simple majority.

Board meetings in 2023

The Board of Directors convened a total of 16 times in 2023, and the attendance rate of the meetings was 89%. Detailed information about the attendance rate is available in Fortum Governance 2023.

During 2023, the main focus of the board work was on the group’s new strategy and its implementation plans, overall transformation of business operations and organisations, development of risk framework including various short- and long-term risk scenario reviews and a Group Risk Appetite statement, as well as matters on climate change, the directive on corporate sustainability reporting (CSRD) and regulatory environment. Especially during the beginning of the year, the Board was closely monitoring the effects of the European energy crisis caused by Russia’s attack on Ukraine which eventually resulted in the de facto loss of control of the company’s Russian operations. To this end, the Board of Directors established a temporary Russia Committee in April 2023. The members of the committee are Mikael Silvennoinen (Chair), Essimari Kairisto, Ralf Christian and Maija Strandberg. The committee convened a total of 8 times in 2023 and the attendance rate of the meetings was 97%.

The Board of Directors established a new permanent board committee for technology and investment-related matters in April 2023. The duty of the Technology and Investment Committee is to evaluate and make recommendations to the board, inter alia, on technologies related to the production of clean energy, electricity and gas, investment proposals and the achievement of sustainability targets.