Corporate Governance

Updated 10 April 2019

Sievi Capital plc is a private equity investment company that invests in small and medium-sized Finnish companies. Sievi Capital’s share is listed on Nasdaq Helsinki. The corporate governance of Sievi Capital complies with the Company’s Articles of Association, the Finnish Limited Liability Companies Act and other laws and regulations governing the Company. In addition, the Company complies with the Corporate Governance Code of Finnish listed companies issued by the Securities Market Association 1 October 2015. The Corporate Governance Code of Finnish listed companies is available at the Securities Market Association’s website at www.cgfinland.fi/en.

The Corporate Governance Statement of Sievi Capital plc made according to the recommendations of the Corporate Governance Code of Finnish listed companies is published as a separate publication from the Report of the Board of Directors on Sievi Capital’s website and in the Annual Report.

 

GENERAL ANNUAL MEETING

The ultimate decision-making power lies with Sievi Capital’s general meetings of shareholders. The AGM makes decisions on matters addressed to it by the Limited Liability Companies Act and the Company’s Articles of Association. Key matters resolved by the AGM are adoption of the financial statements, discharging the board of directors and the CEO from liability, resolution on the profit shown on the balance sheet and election of the members of the Board of Directors and auditors and their respective remuneration.

The Company’s AGM is held annually by the end of June. An extraordinary general meeting of shareholders shall be held when deemed necessary by the Board of Directors, or when requested in writing by the auditor or by shareholders representing at least one-tenth of all issued and outstanding shares for purposes of dealing with a specific matter. Notice of a general meeting of shareholders shall be delivered to the shareholders no earlier than three (3) months and no later than three (3) weeks prior to the general meeting, and no later than nine (9) days prior to the record date of the general meeting of shareholders. The notice is delivered to the shareholders by a release published at the Company’s website or in a national newspaper designated by the Board of Directors, or by sending the notice by mail to the addresses marked in the Company’s shareholder register.

Sievi Capital plc’s AGM was held 10 April 2019 and it resolved matters designated to the AGM.

 

BOARD OF DIRECTORS

The task of the Board of Directors is to see to the governance of the Company and ensure the appropriate organization of the Company’s operations in accordance with the Finnish Limited Liability Companies Act.

According to Sievi Capital’s Articles of Association, the Board of Directors consists of a minimum of three and a maximum of seven ordinary members. The Board members are elected by shareholders in the Annual General Meeting. The proposal for the composition of the Board of Directors to the Annual General Meeting has in recent years been prepared by a significant shareholder which represents over 50% of company’s shares and votes. As part of the preparation process the COB participates in discussions with largest shareholders in order to take into consideration different views and company situation in the composition of the Board. The Board elects a Chairman from among its members.

 

Tasks of the Board

The Board of Directors annually approves its rules of procedure, which define the Board’s key tasks, operating principles and meeting practices, as well as an annual self-assessment of the Board’s activities.

The key tasks of the Board include:

  • to confirm the strategy and supervise its implementation;
  • to confirm Company values and policies;
  • to confirm annual key business targets and monitor the group’s result development;
  • to decide on making new investments and divestants;
  • to review and approve financial statements and other financial reports;
  • to appoint and dismiss the CEO;
  • to decide on the incentive systems of the management and other personnel of the Company;
  • to monitor the Company’s key business risks, risk management and internal control management systems and confirm the policies and guidance related to them; and
  • to prepare proposals to target company shareholders’ concerning the election of the members of the Board of Directors in target companies.

 

Tasks related to the Board’s financial reporting, internal control and risk management include for example:

  • to monitor the Company’s financing and financial position, and the financial statement reporting process;
  • to monitor the financial reporting process;
  • to monitor significant strategic and operational risks, and the actions of the management of the Company to follow, manage and report the risks;
  • to monitor the transactions of the Company’s management and their related parties and any possible conflicts of interest related to them;
  • to review Corporate Governance Statement
  • to prepare a proposal to the Annual General Meeting for the decision concerning the election of an auditor; and to assess the independence of the auditor.

 

The Board of Directors is responsible for the following tasks which are on the Remunation Committee’s responsibility according to the Corporate Governance Code of Finnish listed companies:

  • to decide on the renumeration and other benefits of the CEO and other management;
  • formulation and implementation of a process to find successors for the CEO and other management; and
  • development and assessment of compensation systems and their approcieteness

 

In the Annual General Meeting held 10 April 2019 the following persons were elected as members of the Board of Directors: Asa-Matti Lyytinen and Klaus Renvall and as new members Kati Kivimäki, Tuomo Lähdesmäki and Taru Narvanmaa.

According to the evaluation of independence of the Corporate Governance Code of Finnish listed companies completed by the Board, all members are independent of the Company and significant shareholders.

The company deems important its Board Members have diverse backgrounds however taking into account the members have the competencies that are essential for company business. The aim is that the Board members have versatile professional backgrounds, experience, know-how and that the Board consists of representatives of both genders so that the diversity of the Board supports company’s business and future in a best possible way.  The object of diversity is to ensure for example a wide scope of views, enhancing open discussion, and enabling support for and challenging of the Company’s management.

 

Committees

Board committees have not been established in Sievi Capital. The Board of Directors is responsible for the fulfillment of the Audit Committee’s tasks. According to the view of the Board of Directors, the functioning of the Board without committees is best suited to the current needs of the Company’s business and in a best possible way promotes the fulfillment of the responsibilities of the Company’s Board according to law and the Corporate Governance Code of Finnish listed companies.

 

Board meetings

In 2018 the Board held 18 meetings. The participation percentage in meetings of the Board members in 2018 was 97%. Asa-Matti Lyytinen participated in 18/18 meetings, Seppo Laine 18/18 meetings, Klaus Renvall 16/18 meetings, Jarkko Takanen 13/13 meetings until a member of the Board and Jorma Takanen 6/6 meetings until a member of the Board.

 

Board members and their shareholdings

Name Personal data Shareholding in Sievi Capital plc and companies belonging to the same group 31 December 2018 (direct ownerships and ownerships through entities controlled by the Board member)
Tuomo Lähdesmäki Chairman of the Board
Member of the Board since 2019
Year of birth: 1957
Education: M.Sc. (Engin.), MBA
Main occupation: Board professionalIndependent of the Company and significant shareholders

0

Kati Kivimäki Member of the Board
Member of the Board since 2019
Year of birth: 1973
Education: BBA, MBA
Main occupation: Managing Director, Shopping Center Mylly

Independent of the Company and significant shareholders

 

0

 

 

Asa-Matti Lyytinen Member of the Board
Member of the Board since 2000
Year of birth: 1950
Education: M.Sc. (Econ.)
Main occupation: Board professionalIndependent of the Company and significant shareholders

0

Taru Narvanmaa Member of the Board
Member of the Board since 2019
Year of birth: 1963
Education: M.Sc. (Econ.)
Main occupation: Board professional

Independent of the Company and significant shareholders

0
Klaus Renvall Member of the Board
Member of the Board since 2017
Year of birth: 1951
Education: M.Sc. (Econ.)
Main occupation: FNZ-Group Ltd, Managing Director, NordicsIndependent of the Company and significant shareholders
0

 

CHIEF EXECUTIVE OFFICER AND OTHER MANAGEMENT

CEO

The Company’s Board of Directors appoints the CEO and decides on the terms of her/his service contract and remuneration. The CEO manages and supervises the company’s business operations according to the Finnish Companies Act and in compliance with the instructions and authorisations issued by the Board.  Päivi Marttila acts as the Company’s CEO.

Other management

The Company’s other management includes the CFO who is responsible for the financial reporting process and supports the CEO in the management of the Company’s business operations.

Information and ownerships of the CEO and other management

Name Duty Personal data Shareholding in Sievi Capital plc and companies belonging to the same group 31 December 2018 (direct ownerships and ownerships through entities controlled by the Executive)
Päivi Marttila
CEO Year of birth: 1961
Education: M.Sc. (Econ.)

0

Markus Peura CFO Year of birth: 1983
Education: M.Sc. (Econ.) , CFA

0

 

RISK MANAGEMENT, INTERNAL CONTROL AND AUDIT

 

Risk Management

Risk management at Sievi Capital is based on a risk management policy approved by the Board of Directors which targets a comprehensive and proactive management of risks. Risk management at an investment target level plays a material role in risk management and is essentially organized by the target companies. However, Sievi Capital assesses the most relevant risks at the target company level and enhances the implementation of risk management in target companies.

The Board of Directors of Sievi Capital confirms the Company’s strategy and business plan in which among other things targets for new investments and exits are defined. The Board makes the investment decisions concerning new private equity investments and oversees the implementation of the investment activities. Due to the Company’s investment strategy and the nature of investments a significant part of Sievi Capital’s most relevant risks are related to the Company’s target companies.

Description of the risks of Sievi Capital can be found in the Annual Report.

 

INTERNAL CONTROL AND AUDIT

Internal control at Sievi Capital is an ongoing process to secure the profitability of the business and it’s continuity. The objective of monitoring is to minimize risks by securing that reporting is reliable and that laws and regulations are being followed.

Considering the structure and scope of the Company’s business, setting up a separate internal audit organisation has so far not been considered appropriate. The Company’s management is responsible for the internal control system. Internal control is an active part of the Company’s management and governance.

The basis of financial monitoring is formed by the controls included in operational processes, which enable fast anomaly detection and reaction. A material part of the financial monitoring is monthly reporting by management. The metrics followed in the monthly reporting have been set so that they support the Company in reaching targets and raise issues that require controlling actions. Due to the nature of the business budgeting in its traditional form is not used. The interpretation and applification of the accounting standards is handled by the financial management.

 

INSIDER MANAGEMENT

Sievi Capital plc adheres applicable EU regulation, especially the Market Abuse Regulation (596/2014, ”MAR”) valid since 3.7.2016, and the insider guidelines of Nasdaq Helsinki Ltd. In addition, Sievi Capital has its own internal Insider Policy.

Sievi Capital has decided not to maintain public insiders or permanent company-specific insider register, but only project-based insider lists. Project specific lists will be established and maintained for each project constituting inside information, based on a the insider guidelines of Nasdaq Helsinki and Company’s own internal guidelines.

Sievi Capital maintains an internal, non-public list on managers and persons closely associated with them. Sievi Capital has determined the members of the Board of Directors, CEO and CFO as managers defined in the Market Abuse Ragulation (MAR).  Each manager and persons associated with them are obliged to disclose all transactions made with financial intruments issued by Sievi Capital. These transactions are published with a regulatory release. The total shareholing in Sievi Capital’s shares of each Manager is annually published as part of the Corporate Governance Statement according to the Corporate Governance Code of Finnish listed companies.

Sievi Capital’s above-mentioned executives, personnel, and any other persons involved in the preparation, compilation and publication of the Company’s financial reports shall not conduct the transactions related to Sievi Capital’s financial instruments within 30 calendar days prior to the company’s financial statements.

 

AUDITOR

The articles of association state that Sievi Capital plc shall have one auditing firm as its statutory auditor. The lead auditor has to be Authorised Public Accountant. The Auditor is elected for a single term, which terminates at the end of the Annual General Meeting following the election.

Company’s current auditor is KPMG Oy Ab, with Antti Kääriäinen, APA, acting as the lead auditor.

In 2018, the audit fees paid to the auditor amounted to 27 000 euros and the fees related to other non-audit related services amounted to 11 000 euros.

 

COMMUNICATION

The aim of the company’s communication is to provide the market with all the essential information needed to determine the share value and to ensure from its part that the company’s management and the market’s understanding of the company’s operations and future is consistent. The communication policy will implement the key communication principles of Sievi Capital, such as timeliness, concurrency, openness, consistency, continuity and transparency.

All information that is required to be disclosed under the disclosure obligation for listed companies is published on the company’s website. The company maintains and updates its’ website so that investors and shareholders have access to the latest information about the company. Sievi Capital has an disclosure policy that incorporates the company’s key communications principles and communication channels.

In accordance with the provisions and instructions of the Securities Markets Act and the FIN-FSA, Financial Supervisory Authority, Sievi Capital plc provides regular information on its financial results by publishing the financial statements and financial statements bulletin, the half year report and business reviews for the first and third quarters. Sievi Capital publishes all information that may have a significant impact on the value of the Company’s financial instrument to Nasdaq Helsinki, the main media and the company’s stakeholders as required by the Transparency Directive and Market Abuse Regulation simultaneously and as soon as possible.

The goal of Sievi Capital’s communication is to support the company’s strategy by increasing interest in the company as an investment and as a developer of the target companies. The main objective of investor communications, investor relations and financial reporting is to support the correct price formation of Sievi Capital’s financial instruments by providing accurate, sufficient and relevant information on the financial situation, operations, operating environment, strategy and objectives of Sievi Capital.

Ⓒ2019 Sievi Capital Oyj