The basic responsibility of the directors in discharging their duties as members of the Board is to always act in good faith and with due care and exercise their business judgement on an informed basis in what they reasonably believe to be in the best interests of the company and its shareholders.
The Board of Directors has approved the company’s Code of Conduct and prepared a written charter for its work including the Board’s main duties and operating principles. UPM's Board is responsible for the supervision and control of the entire UPM Group and for ensuring that the company's administration and its operations as well as control of its accounts and finances are duly in place.
The Board of Directors determines the company's dividend policy and makes a proposal to the Annual General Meeting for the distribution of profits and payment of dividend. The other main duties of the Board of Directors are to
There is no minimum attendance requirement for the directors’ attendance in the meeting as the general assumption is that directors attend all meetings unless there is a valid reason for the non-attendance. In 2015, the Board held 8 meetings. The directors’ average attendance at the meetings was 96.4% (99.0%).
The Board of Directors evaluates the independence of its members annually and, in addition to this, on a continuous basis with the assistance of the Nomination and Governance Committee. A Board member is obliged to provide sufficient information for the evaluation of his/her independence. The directors’ independence is assessed against the independence criteria of the Finnish Corporate Governance Code.
According to the evaluation carried out by the Board, all Board members are independent of the company’s significant shareholders as none of the company shareholders holds more than 10 percent of the company shares or votes attached to them. The Board also assessed that all non-executive directors are independent of the company including Berndt Brunow and Wendy E. Lane who according to the overall evaluation carried out by the Board continue to be independent of the company although they have been non-executive directors for more than 10 consecutive years. As the President and CEO of the company, Jussi Pesonen is not independent of the company.
The Board of Directors reviews its performance and working methods annually. The evaluation is usually conducted as a self-assessment and its results are reviewed and discussed at the Board meeting in December. Directors evaluate the Board’s performance of its afore mentioned duties and responsibilities, Board composition and structure, Board culture, effectiveness of Board meetings, and individual director contribution. During the past three years, the directors have also assessed the performance of the Chairman of the Board. Identified areas of improvement are considered when planning the Board’s work and the Nomination and Governance Committee takes the results in consideration when it is preparing its proposal for the composition of the Board to the Annual General Meeting.
To ensure that the Board members are sufficiently informed of the company’s operations, business environment and financial position, the Board meetings regularly include President and CEO’s business review on topical items and the Chief Financial Officer’s review on financial results. The company’s statutory auditor visits the Board meetings semi-annually to report audit findings. In addition, the Committee Chairmen report on items discussed in the committee meetings held prior to the Board meetings.
A new member of the Board is provided with post-election induction on the company’s business operations in the meetings with senior executives of the company as presented below. Induction is provided to the extent the new Board member her-/himself deems appropriate.
In addition, business area heads present their own business area including earnings logics, performance and strategy. The new director is also provided with copies of all corporate governance related charters and policies, Articles of Association, Finnish Corporate Governance Code and other documents related to Board work, as well as general information on the company. Continuing education is arranged upon request to all directors.