DIVERSITY POLICY OF KESKO CORPORATION’S BOARD OF DIRECTORS

Diversity is an essential component of Kesko’s success, the achievement of Kesko’s strategic objectives and good governance at Kesko. This diversity policy describes the objectives in the achievement of diversity in the operations and composition of Kesko Corporation’s Board of Directors.

Board size and election of its members

According to the Company’s Articles of Association, the term of office of a Board member is three (3) years, starting at the close of the General Meeting electing the member and expiring at the close of the third (3rd) Annual General Meeting after the election. According to the Articles of Association, Kesko's Board of Directors is composed of a minimum of five (5) and a maximum of eight (8) members. A sufficient number of Board members promotes the diversity of Board composition, as the areas of expertise and competence of the Board members are mutually complementary and the Board’s independence requirements are satisfied.

The Board members are elected by majority votes at the General Meeting based on shareholders’ proposals. The Board elects the Chair and the Deputy Chair from among its members for the whole term of office of the Board. In the preparation of a proposal for the Board composition, Kesko applies the practice in which significant shareholders prepare the proposals concerning the Board of Directors, including the proposal for the number of Board members, their fees and, as necessary, for the Board members to the General Meeting.

Planning the Board composition

The composition of Kesko’s Board of Directors shall support Kesko’s current and future business operations. The Board members are appointed on their merits. One of the essential features in the Board composition is that the Board members’ educational backgrounds, experience, professional competences and age and gender distribution support Kesko’s business objectives and enable efficient Board work from Kesko’s point of view. The Board members shall also be able to devote a sufficient amount of time to Board work.

Kesko aims to achieve a balanced gender distribution in the composition of its Board of Directors. The composition of the Board shall reflect experience in both national and international business operations. The educational background of the Board members shall represent multiple disciplines and diversity. In addition, Kesko’s Board shall include members with strong experience in the trading sector and in-depth knowledge of the retailer business. The achievement of objectives is monitored annually and reported in the corporate governance statement.

(Approved in Kesko Corporation’s Board of Directors meeting on 25.10.2016).

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