Page 20 - Dittmar Quarterly Q1 2019

QUARTERLY Q/1 – 2019
Implementation of SHRD II in Finland 1. Director
remuneration
New provisions governing decision-making on The remuneration policy and report will need to be director remuneration and related reporting will be publicly disclosed no later than three weeks before included in the Companies Act and the Securities they are submitted to the shareholders’ meeting for Markets Act. The provisions are meant to promote approval. If the remuneration policy is not approved, transparency by providing a new means of the company may continue to pay remuneration to expression of shareholder voice on executive its directors in accordance with its existing practices remuneration, and hence to improve corporate or approved existing policy, whichever is applicable. governance efficiency. However, in this case, the company must submit a
revised policy for approval at the following Listed companies will need to establish a shareholders’ meeting.
remuneration policy as regards the members of the board of directors, managing director and the supervisory board (if applicable). The policy will need to be submitted to an advisory vote by the shareholders’ meeting at the time of every material change and in any case at least every four years. A temporary derogation from the remuneration policy will be possible if necessary to serve the long-term interests and sustainability of the company.
Listed companies will also need to draw up a remuneration report that provides a comprehensive overview of realised remuneration. The report will need to describe all benefits awarded or due to individual directors during the previous financial year and must be submitted to an advisory vote by the shareholders’ meeting.
We believe that the
new rules will promote transparency as intended and may lead to increased consideration of shareholders’ interests. Increased expenses
will admittedly be the
flip side of the new, heavier compliance requirements.