Page 21 - Dittmar Quarterly Q1 2019

Related party 2transactions
Say-on-pay is not a complete novelty in Finland. The Companies Act will be supplemented by new Under the CG Code, listed companies have been rules that regulate decision-making in publicly listed required to publicly disclose a remuneration companies. The proposed changes will affect the statement that describes how directors, the decision-making of the board of directors, managing managing director and other executives are director, supervisory board and the shareholders’ remunerated. However, the idea that the company’s meeting of publicly listed companies. Similar remuneration system in its entirety would be put to a provisions have been formulated in earlier corporate shareholder vote is a new one. For now, only the practice and the CG Code.
chosen level of director remuneration has been on
the agenda of shareholder meetings. Amendments Under the new rules, an interested director or
to the CG Code have been planned to ensure shareholder of a publicly listed company shall be compliance with the new statutory reporting disqualified from participating in decision-making requirements. regarding a transaction which is concluded either
outside the company’s ordinary course of business We believe that the new rules will promote or on other than normal market terms. A valid transparency as intended and may lead to increased decision on an interested transaction must be
consideration of shareholders’ interests. Increased approved by a qualified majority of disinterested expenses will admittedly be the flip side of the new, directors or shareholders.
heavier compliance requirements.
As a notable exception to the above, an interested shareholder will be able to participate in decision- making of the general meeting as forth under the Companies Act. This includes decision-making regarding, for example, share and option issuances as well as distribution of dividends.
The definition of a related party with respect to a publicly listed company will be the same as in international accounting standards (IAS 24). Generally, a related party means a contracting party in which the director has a financial, intrafamilial or other interest.
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