Corporate Governance

We are committed to good corporate governance. Below we highlight the corporate governance activities in relation to corporate responsibility (CR). The full Corporate Governance Statement is available on our web site, www.tieto.com/investors/governance.

The impact of corporate governance spans internal as well as external stakeholders – employees, customers, investors and shareholders to mention just a few. To drive our corporate governance activities efficiently, in addition to complying with local legislation and specific regulations, we strive to implement ethical business practices taking into account the interests of all our stakeholders as well as the environment.

Our governance activities are based on external as well as internal rules and regulations including the Securities Market Act, the Finnish Corporate Governance Code, the Charter of the Board and its Committees, and the Code of Conduct.

 

AGM and the Board of Directors

Tieto’s supreme decision-making body is the Annual General Meeting (AGM). Every shareholder has a right to participate in the AGM and each share in Tieto entitles its holder to one vote. However, no shareholder is allowed to vote at an Annual General Meeting with more than one fifth (1/5) of the votes represented at the meeting.

In the Annual General Meeting 2014, 548 shareholders, representing 46 873 226 shares and votes, participated.

Tieto’s Board of Directors has a term of office of one year. The AGM elects at least six and no more than twelve members, including the Chairman, based on a proposal prepared by the Shareholders' Nomination Board (SNB). In addition, Tieto’s own personnel elect two members and two deputy members to the Board of Directors. This is done by personnel representatives in accordance with the Personnel Representation Cooperation Agreement.

The objectives of personnel representation are, inter alia, to provide opportunities for the personnel to influence and affect the organization, to improve communication and decision-making within the group, to increase mutual trust and confidence between corporate management and the personnel, as well as to increase and develop the feeling of security among our people. Personnel representatives, however, are not entitled to participate in the handling of matters that concern the appointment or dismissal of corporate management, the contractual terms of the management, the terms of employment of staff or matters related to industrial actions.

Board members shall be professionally competent and, as a group, have sufficient knowledge of and competence, inter alia, in the company's field of business and markets. The Board of Directors is also accountable for guiding the organization's strategy on economic, environmental and social topics. At least once a year, the Board assesses and discusses Tieto's CR performance and CR-related issues.

Tieto’s Board is assisted by two permanent committees that prepare matters for which the Board is responsible – the Remuneration Committee and the Audit and Risk Committee, which is responsible, among other things, for reviewing and supervising internal control and risk management issues.

All Board members, including the Chairman of the Board of Directors, are non-executive officers. Seven out of eight members are independent of the company’s significant shareholders. The independence of the members is evaluated at the Board's constitutive meeting. The Board members shall inform the Board if any changes in these circumstances occur, in which case their independence will be re-evaluated.

More detailed background information regarding the Board, such as composition and tasks of the Board of Directors, working experience, past and present positions of trust, and our Remuneration Statement, is presented on the company’s website, www.tieto.com/investors/governance.

Operative Management

Our operative management consists of the President and CEO, the Leadership Team, and the Industry Group, Service Line and Product Development Services (PDS) organzations. The President and CEO is assisted by the Leadership Team, which include the heads of Industry Groups and Service Lines, the head of PDS, the head of New Markets, the CFO and the head of HR.

The Leadership Team members are accountable for the performance and development of their management areas, and supervise the operations of the units belonging to their areas. The Leadership Team also monitors the company’s CR performance and approves the CR goals in cooperation with the Board of Directors.

Risk management and compliance

Risk monitoring and compliance are important parts of good corporate governance. Our internal control framework supports the execution of our strategy while ensuring regulatory compliance.

Our risk management aims at developing and maintaining the company’s risk management framework, and reporting risk exposures consisting of strategic, financial, operational and compliance risks. The risk management framework consists of the risk management organization, related policies, procedures, operating principles, tools, and guidelines.

The Chief Risk Officer has the responsibility to arrange and lead Tieto’s risk management and owns the Risk Management Policy, which applies to the whole group. The Internal Audit assures the efficiency of the framework and risk management in business operations.