Board’s Committees

Kesko has the Board's Audit Committee and Remuneration Committee, both of which are composed of three (3) Board members. At the close of the Annual General meeting, the Board elects from among its members the Committee Chairmen, Deputy Chairmen and members. In the election of committee members, the independence and competence requirements for the committee in question are to be taken into account.

The Committees regularly assess their operations and working methods and carry out a related self-assessment once a year. The Board has confirmed written charters for the Committees, which contain the main duties and operating principles of the Committees.

The Committees have no independent decision-making power. Instead, the Board makes decisions on matters based on the Committees' preparatory work. The Committee Chairman reports on the Committee's work at the Board meeting following the Committee's meeting. Minutes of the Committee meetings are submitted for the information of the Board members.

Kesko's Board of Directors has not established any other committees in addition to the Audit and Remuneration Committees.

Audit Committee

The Board elected in its organisational meeting, held after the Annual General Meeting on 12 April 2021, the following Board members as the Audit Committee members:

  • Jannica Fagerholm (Chairman)
  • Timo Ritakallio (Deputy Chairman)
  • Piia Karhu

 
All members of the Audit Committee are independent of the Company and of the Company's significant shareholder. In the election of the Audit Committee members, the competence requirements for Audit Committee members have been taken into account.

In accordance with its charter, the Audit Committee:

  • monitors Kesko Group's (Kesko) financial position and funding
  • monitors and assesses Kesko’s financial reporting system, including the process for financial statements reporting
  • monitors and assesses the effectiveness of Kesko's internal control, internal audit and risk management systems
  • approves the operating instructions for the Company’s internal audit and annually assesses the need for changes, approves the annual audit plan, budget and resources and related material changes, and reviews reports submitted to the Committee
  • monitors the statutory auditing of the Company and the Group
  • discusses matters that emerge in connection with auditing and in relation to the Committee’s duties with the Company’s Auditor when necessary and otherwise handles contacts with the Auditor
  • reviews the Auditor’s Report and possible audit minutes and reports presented by the Auditor to the Committee
  • monitors and evaluates the independence of the Company’s Auditor and, in particular, the non-audit services provided to Kesko by the Auditor and its network audit companies
  • prepares the appointment of the Company’s statutory Auditor and recommends an Auditor
  • monitors and assesses how agreements and other legal acts between the Company and its related parties meet the requirements of ordinary course of business and arm’s-length terms
  • prepares a recommendation to the Board of Directors regarding the review of interim reports, the half year financial report, and the financial statements
  • reviews the Company’s Corporate Governance Statement and non-financial report
  • prepares and reviews other tasks given by the Board to the Committee

 
Operation in 2020

In 2020, the Audit Committee held six meetings. The members' attendance rate at the Committee meetings was 100%. At the Committee meetings, the Group's Chief Financial Officer, Group Controller, the director in charge of internal audit and risk management, and Group General Counsel regularly reported on their areas of responsibility to the Committee. The Committee also receives reports on Kesko Group's funding, taxation, information management, risk management, compliance operations, and insurance policies. The Auditor is present at the Committee meetings and presents their audit plan and report to the Audit Committee.

During the year, the Committee reviewed the reports on the Group's financial situation, including the financial statements release, the half year financial report and interim reports and updated forecasts, and made a recommendation to the Board on the review of the reports and the financial statements release. The Committee reviewed the reports of the Group's external and internal audits and risk management, the report on related party transactions, and the Corporate Governance Statement. The Audit Committee also reviewed the results of goodwill impairment testing.

In 2019, the Audit Committee arranged for the tendering of Kesko's statutory auditing, and gave the Board a recommendation for the proposal for the election of Auditor, based on which the Board submitted a proposal for the election of Auditor to the 2020 Annual General Meeting. The Audit Committee monitored the implementation of the audit plan for internal audit, additional services obtained from firms of auditors and the preparation of the new K Compliance operating model, and reviewed risks related to the Covid-19 pandemic, the change in the consolidation method of Kesko Senukai and Kesko's data balance sheet statement as well as reviews on cyber security, treasury, compliance, and taxation. The Committee also monitored and assessed the Auditor's independence and the non-auditing services provided by the Auditor to the Group. The Audit Committee also approved the audit plan, personnel resources and budget for the Group's internal audit for 2021.

The Audit Committee assessed its operations as part of the Board's self-assessment. Topics that emerged in the assessment included the Committee's significant role in monitoring the Group's risk management and the familiarity of the Committee members with their duties.

 

Remuneration Committee

The Board elected in its organisational meeting, held after the Annual General Meeting on 12 April 2021, the following Board members as the Remuneration Committee members:

  • Esa Kiiskinen (Ch.)
  • Peter Fagernäs (Deputy Ch.)
  • Timo Ritakallio

 
All members of the Remuneration Committee are independent of the Company's significant shareholder and its majority is also independent of the Company. In the election of the Remuneration Committee members, the competence requirements for Remuneration Committee members have been taken into account.

In accordance with its charter, the Remuneration Committee:

  • prepares the Company’s Remuneration Policy and Remuneration Report for Governing Bodies
  • presents the remuneration policy and report at the General Meeting and responds to questions related thereto
  • monitors the implementation of the remuneration policy presented to the General Meeting and ensures that the remuneration of the Company’s governing bodies in conducted under the remuneration policy presented to the General Meeting
  • conducts preparatory work for the remuneration and other financial benefits for the Company’s President and CEO and Deputy to the President and CEO and for their service contracts
  • conducts preparatory work for the remuneration and other financial benefits for Group Management Board members responsible for lines of business; decisions on the remuneration and financial benefits for Group Management Board members other than those responsible for lines of business are made by the President and CEO within the limits set by the Chairman of the Remuneration Committee
  • conducts preparatory work pertaining to the appointment of a President and CEO, Deputy to the President and CEO, and Group Management Board members responsible for lines of business, and to identifying their potential successors
  • conducts preparatory and development work on matters pertaining to remuneration schemes, including
    • evaluating the remuneration for the President and CEO, Deputy to the President and CEO and other management, and ensuring the appropriateness of the Company’s remuneration schemes
    • preparing potential share or share-based compensation schemes
    • preparing the distribution and terms and conditions of shares or options under any share or share-based compensation schemes the General Meeting may have decided on
    • preparing the principles for the performance and result criteria of the remuneration schemes, and monitoring their implementation and evaluating their impact on Kesko's long-term financial success.
  • prepares and reviews other tasks given by the Board to the Committee.

 
Operation in 2020

In 2020, the Remuneration Committee held four meetings. The members' attendance rate at the Committee meetings was 100%. The Committee prepared, among other things, proposals to the Board for Kesko's Remuneration Policy for Governing Bodies, Kesko's 2020-2023 share plans, the performance criteria, target levels and target group for share awards, the principles of Group performance bonuses for 2021, as well as for the performance bonuses to be paid for 2019 to the President and CEO and Group Management Board members responsible for lines of business. The Committee monitored and assessed the implementation of the reform of the management's total remuneration. In addition, the Committee reviewed, among other things, Kesko's Remuneration Statement and prepared the Company's Remuneration Policy for Governing Bodies. The Remuneration Committee assessed its operations as part of the Board's selfassessment. Topics that emerged in the assessment included the Committee's familiarity with its duties.

To top