Governance
The governance of Summa Defence Plc has been divided between the General Meeting, Board of Directors and CEO in accordance with the Limited Liability Companies Act and the company’s Articles of Association. The CEO is assisted by the Management Team. Shareholders participate in the company governance and monitoring through decisions made at General Meetings. The Board of Directors convenes the Ordinary General Meeting. An Extraordinary General Meeting shall be held if the company auditor or shareholders whose combined shares represent at least one-tenth of all company shares so demand in writing for the purpose of addressing a specific issue. The General Meeting makes decisions in accordance with the Limited Liability Companies Act. In addition, the company’s activities are regulated by the Articles of Association.
Applicable statutes, guidelines and recommendations
Corporate Governance of Summa Defence Plc is subject to the provisions of the Finnish Limited Liability Companies Act, the Auditing Act, and the Accounting Act and other legislation relevant to its operations. The Limited Liability Companies Act defines, for example, the company’s governing bodies, their roles and responsibilities, as well as their relation to each other. The Limited Liability Companies Act is also essential from the point of view of the shareholders’ rights by providing provisions on the rights associated with the shares and on the exercise of the rights, and it also contains the key principles of corporate law applied to corporate governance.
In addition, Summa Defence follows other guidelines and recommendations concerning good corporate governance applicable. While Summa Defence is not a listed company, it substantially follows the Finnish Corporate Governance Code where applicable, and to the extent the recommendations are suitable taking into account the company’s ownership structure and/or the special features of the company or its industry while maintaining a good corporate governance model.
Governing Bodies
The highest governing body is the General Meeting, in which the shareholders exercise their decision-making powers. The board of directors shall see to the administration of the company and the appropriate organisation of its operations, consisting of directors appointed by the General Meeting.
The Group’s operating activities are managed by the President and CEO, appointed by the Board of Directors and who shall see to the daily administration of the company in accordance with the instructions and orders given by the Board of Directors. The President and CEO is supported by the Group Management Team. Each business unit has a management group of its own. The statutory boards of wholly-owned Group companies other than the parent company are only responsible for the statutory minimum duties specified in the relevant legislation.
Consultative Committee
According to the Articles of Association, Summa Defence Plc shall have a Consultative Committee appointed by the General Meeting. The Board of Directors shall consult the Consultative Committee on matters that concern any major changes or expansion of operations or any other material changes to the company’s organisation or business operations, or which are otherwise of great importance to the industry that the company is engaged in, either in Finland or internationally. The Consultative Committee consists of a chairman, a vice-chairman, and a maximum of ten other members.
Composition of the Board of Directors and the election procedure
According to the Articles of Association as currently in force, the Board of Directors of Summa Defence Plc consists of a chairman and a minimum of two and a maximum of seven other members. During the current financial period, the Board has three (3) members. The General Meeting of Shareholders elects the chairman, and the other Board members and decides on their remuneration. The Board members are elected for one year at a time, their terms of office ending at the close of the first Annual General Meeting held subsequent to their election.
Principal duties of the Board of Directors and distribution of duties
The Board of Directors is responsible for the governance of Summa Defence and the appropriate organisation of Summa Defence operations in accordance with applicable legislation, the Articles of Association and any instructions issued by the General Meeting of Shareholders. In addition to its statutory duties, the Board’s principal duty is to make decisions on the Group’s strategic focus and objectives as well as principles of risk management, to monitor and steer the Group’s business operations, to ensure that the Group complies with legal provisions applicable to its operations and conducts business in a commercially sustainable manner, providing added value to its shareholders. The Board also makes decisions on the Group’s key operating principles, approves annually the Group’s financial targets and operational objectives, as well as its financial statement and any interim reports, and decides on material investments of the Group.
The Board of Directors ensures that the company has established the ethical and corporate values applied to its operation as well as the operational principles and monitors compliance with these values and principles. The Board also approves the general setup of the Group’s organizational and operational structure. The duty of the Board of Directors is to promote the best interest of the company and all its shareholders. A directors does not represent the interests of the parties who have proposed his or her election as a director.
The Board of Directors has set up a Nomination and Compensation Committee as well as an Audit Committee to take charge of certain specific tasks of the Board of Directors.
The Nomination and Compensation Committee
The Nomination and Compensation Committee consists of three (3) members, all of whom are non-company and non-executive directors. The members have experience and skills in the areas of knowledge that fall within the scope of the Nomination and Compensation Committee duties as the Charter of the Committee. It prepares the Group’s and the management’s payroll structures as well as any bonus and incentive systems. It also approves key appointments and nominations.
The Audit Committee
The Audit Committee consists of three (3) members, all of whom are non-company and non-executive directors. The members have experience and skills in the areas of knowledge that fall within the scope of the Audit Committee duties as per the Charter of the Audit Committee. Its responsibility is to monitor e.g. implementation of the Group’s internal controls, risk management, financial reporting and it is responsible for supervising the Group’s ethics and compliance (including specifically anti-corruption and anti-bribery related actions) program and activities.
The President and CEO and the Group management
The President and CEO of Summa Defence is responsible for managing the company’s and the Summa Defence Pls business activities and administration, in accordance with the provisions of the Finnish Limited Liability Companies Act, other applicable legislation and any instructions and guidelines issued by the Board of Directors. The President and CEO is assisted by the Group Management Team, which convenes monthly and which consists of Executive Vice Presidents of each business function, Chief Financial Officer, Sales Director, Chief Legal Officer, Chief Human Resources Officer, Chief of Marketing & Communications and Chief Technology Officer. The extended management team also includes the CEOs of the subsidiaries.
In addition, the Group management meets in other combinations as and when necessary for management purposes.
Corporate responsibility is directed by the ESG Steering Group, which is coordinated by the Chief Financial Officer. In addition to the CFO, the members of the group are the heads of HR, legal and QEHS and a communications representative. Summa Defence also has ESG working groups specialising in the environment, compliance, finance, procurement and well-being at work.
Monitoring and controls
The Board of Directors is responsible for ensuring that the monitoring and controls of accounts and funds management has been organized appropriately. The president and CEO is responsible for ensuring that the company’s accounting complies with legislation and that the funds management is reliably organized. Summa Defence Plc management is responsible for ensuring that the Group’s day-to-day operations comply with all applicable legal requirements and Board decisions, and that the Group’s risk management has been organized in an appropriate manner.
The Group’s division into business units increases efficiency and focus of management thereof and facilitates organization of efficient monitoring and control thereof. An operational reporting system has been set up for the Group’s financial monitoring and control. It produces versatile information on the Group’s financial standing and development on a monthly basis. The Group also has clearly defined decision-making authorizations related to investments.
Summa Defence has an independent, outsourced Internal Audit function, which evaluates and contributes to ensuring the efficiency and feasibility of risk management and internal controls, the reliability of financial reporting, accounting and administration and the compliance of the operations. The Internal Auditors comply with the International Standards for the Professional Practice of Internal Auditing. Internal Audit reports on its activities and findings to the Audit Committee and Summa Defence´s management. The Audit Committee confirms the internal audit plans annually.
The company’s external Auditor (elected by the general meeting) reports their observations at least once a year to the Board of Directors, the Audit Committee and the Group’s management. The auditors also submit a statutory auditors’ report to the company’s shareholders. Summa Defence auditor is an approved auditor within the meaning of the Auditing Act.