SHAREHOLDERS’ NOMINATION BOARD – REPORT OF THE OPERATIONS ON FEBRUARY 5, 2024
The Annual General Meeting of Teleste Corporation resolved in 2020 to establish a Shareholders’ Nomination Board for Teleste, the responsibility of which is annually to prepare proposals on the election and remuneration of the members of the Board of Directors to the Annual General Meeting and for ensuring that the Board of Directors and its members have sufficient competence and experience to meet the needs of Teleste. At that meeting the Annual General Meeting also resolved to approve the charter for the Nomination Board.
The Nomination Board consists of three (3) members having been nominated by Teleste’s three largest shareholders, calculated on the basis of the votes conferred by all the shares in Teleste on August 30 preceding the next Annual General Meeting. The Nomination Board’s term of office shall continue until a new Nomination Board is elected.
Teleste’s three largest shareholders that on August 30, 2023 were registered in the shareholders register held by Euroclear Finland Oy are: Tianta Oy, Mandatum Henkivakuutusosakeyhtiö and Keskinäinen Eläkevakuutusyhtiö Ilmarinen.
At the time of the publication of this evaluation, the composition of Nomination Board is the following:
- Timo Luukkainen, nominated by Tianta Oy
- Patrick Lapveteläinen, nominated by Mandatum Henkivakuutusosakeyhtiö
- Esko Torsti, nominated by Keskinäinen Eläkevakuutusyhtiö Ilmarinen
Timo Luukkainen has acted as chairman of the Nomination Board.
The Nomination Board has reviewed the size of Teleste’s Board of Directors, its composition and diversity as well as the competence areas that it deems to benefit the company most. The Nomination Board also reviewed the remuneration of the members of the Board of Directors. In addition, the Nomination Board familiarized itself with and discussed about the results of the self-evaluation conducted by the Board of Directors.
The Nomination Board gave its proposals on 5 February 2024 to the Board of Directors for the Composition and Remuneration of the Board of Directors of Teleste Corporation, which were published as a stock exchange release.
Charter of the shareholders’ nomination board of Teleste corporation
1 Purpose of the Nomination Board
The Shareholders’ Nomination Board of Teleste Corporation (hereinafter the “Company”) is a body
comprised of the Company’s shareholders responsible for annually preparing proposals on the
election and remuneration of the members of the Board of Directors to the Annual General Meeting
and for ensuring that the Board of Directors and its members have sufficient competence and
experience to meet the needs of the Company.
In its activities, the Shareholders’ Nomination Board shall comply with applicable legislation and the
Finnish Corporate Governance Code.
The charter of the Shareholders’ Nomination Board regulates the appointment and composition of
the Nomination Board and defines its tasks and responsibilities.
2 Appointment of the members and the composition of the Nomination Board
The Nomination Board shall consist of three (3) members representing the Company’s three largest
shareholders, calculated on the basis of the votes conferred by all the shares in the Company on 30
August preceding the next Annual General Meeting. The Nomination Board’s term of office shall
continue until a new Nomination Board is selected.
In addition, the Chairman of the Company’s Board of Directors may be heard as an expert at
Nomination Board’s meetings. However, he/she shall not take part in the decision-making.
The Company’s three largest shareholders on 30 August are determined on the basis of the
Company’s shareholders’ register maintained by Euroclear Finland Ltd. The Chairman of the Board of
Directors shall, on the basis of the shareholdings as of 30 August, request the three largest
shareholders to nominate one member each to the Nomination Board. If two of these shareholders
have the same number of shares and votes and a member nominated by both shareholders cannot
be appointed, the matter will be settled by drawing lots. In the event that a shareholder who has an
obligation under the Finnish Securities Markets Act to make notifications about certain changes in
ownership (flagging obligation) makes a written request to such effect to the Chairman of the Board
of Directors no later than on 29 August in the year preceding the Annual General Meeting, the
holdings of such a shareholder in several companies, funds or registers shall be combined when
calculating the percentage of votes. If a shareholder does not wish to exercise his/her or its right to
appoint a member, the right shall pass to the next-largest shareholder that would not otherwise be
entitled to appoint a member.
The Chairman of the Board of Directors shall convene the first meeting of the Nomination Board
which shall elect a chairman from among its members. The Nomination Board’s chairman shall be
responsible for convening subsequent meetings.
A member nominated by a shareholder must resign from the Nomination Board if the shareholder in
question transfers over a half of his/her or its shareholdings and as a result of the transfer no longer
is among the ten largest shareholders of the Company. The Nomination Board is required to offer
the positions to be filled to those shareholders of the Company (in the order of shareholdings,
calculated based on the voting rights carried by all the shares in the Company) who have not
nominated a member to the Nomination Board. If a member of the Nomination Board resigns during
the term of office, the shareholder in question may nominate a new member to the Nomination
Board.
3 Tasks of the Nomination Board
The tasks of the Nomination Board include:
a) preparing and presenting a proposal on the number of members of the Board of Directors to the
Annual General Meeting;
b) preparing and presenting a proposal on the members of the Board of Directors to the Annual General Meeting and advising the Company’s Board of Directors on the composition of the audit committee;
c) preparing and presenting a proposal on the remuneration of the members of the Board of
Directors to the Annual General Meeting;
d) finding candidates to succeed the members of the Board of Directors.
4 Tasks of the chairman
The chairman of the Nomination Board shall direct the work of the Nomination Board in such a way
that it effectively accomplishes its objectives and takes into account the expectations of the
shareholders and the interests of the Company.
The chairman of the Nomination Board:
a) convenes and chairs the meetings of the Nomination Board;
b) oversees that the meetings scheduled for the Nomination Board are carried out in accordance
with the agreed schedule; and
c) convenes extraordinary meetings where necessary, and, in any event, within fourteen days of a
request presented by a member of the Nomination Board.
5 Decision-making
The Nomination Board shall have a quorum when more than half of its members are present. The
Nomination Board is not entitled to make decisions unless all members have been given an
opportunity to take part in the handling of the matter and to attend the meeting.
The Nomination Board shall make its decisions unanimously. In the absence of unanimity, the
Nomination Board shall notify the Company’s Board of Directors that it will not make a proposal to
the General Meeting.
Minutes shall be drafted of all the Nomination Board’s decisions. The minutes shall be dated,
numbered and kept in a reliable manner. The minutes shall be signed by the chairman and at least
one member of the Nomination Board.
5.1 Preparing a proposal
The Nomination Board prepares a proposal on the composition of the Board of Directors to the
Company’s Annual General Meeting. However, all shareholders may also make their own proposals
directly to the Annual General Meeting in accordance with the Finnish Companies Act.
The Nomination Board shall evaluate the activities of the Board of Directors and take due account of
the results of this evaluation in its work. The Nomination Board may also use an external consultant
to find suitable candidates.
5.2 Competence of the members of the Board of Directors
The Board of Directors of the Company shall have sufficient expertise, competence and experience
in matters pertaining to the Company’s field of business and business activities.
The Board of Directors shall have competence and qualifications, in particular, in:
a) matters relating to the Company’s field of business and business activities;
b) group and financial administration;
c) strategy and mergers and acquisitions;
e) internal control and risk management; and
f) corporate governance.
Further, the Nomination Board shall take into account the independence requirements laid down in
the Finnish Corporate Governance Code, as well as the stock exchange rules applicable to the
Company.
5.3 Proposals to the Annual General Meeting
The Nomination Board shall present and justify their proposals to the Annual General Meeting. The
Nomination Board shall submit its proposals to the Company’s Board of Directors annually no later
than 28 February prior to the next Annual General Meeting. The proposals of the Nomination Board
shall be included in the notice to the General Meeting.
The Nomination Board evaluates its work and activities annually and it is also required to give an
account of the work performed.
The aforementioned information is published in Finnish and English on the Company’s website and
in the Company’s annual report.
6 Confidentiality
The members of the Nomination Board and the shareholders they represent shall keep confidential
the information pertaining to the proposals to be presented to the General Meeting until the
Nomination Board has made its final decisions and the Company has published the proposals.
The chairman of the Nomination Board may, at his/her discretion, decide whether the Company
should enter into a non-disclosure agreement with the shareholders with regard to activities of the
members of the Nomination Board appointed by them in the Nomination Board.
7 Amendments to the charter and authorization
The Nomination Board shall review the contents of this charter annually and propose possible
changes to the Annual General Meeting for adoption.
The Nomination Board is authorized to make updates and changes of technical nature to this charter
where necessary.
The charter is drafted both in Finnish and English. In potential conflict, the Finnish language version
shall prevail.
Update 2023