Board of directors’ rules of procedure

1. General

The company’s Board of Directors acts in accordance with Lindex Group’s Articles of Association and the legislation in force. The operations of the Board of Directors are regulated especially by the Limited Liability Companies Act (624/2006), the Securities Markets Act (495/1989) and the stipulations, instructions and recommendations given by the authorities and the Helsinki Stock Exchange.

2. Composition and election of the Board of Directors

Under the company’s Articles of Association, the company’s Board has a minimum of five and a maximum of nine members. The term of office of Board members begins from the Annual General Meeting in which they are elected and ends at the conclusion of the subsequent Annual General Meeting.

A person elected as a member must have the competence required by the position and the possibility to devote a sufficient amount of time to attending to the duties. The majority of the Board members must be independent of the company, and at least two of these members must also be independent of the major shareholders of the company within the definition of independence given in the Finnish Corporate Governance Code approved by Securities Market Association.

Candidates proposed as members of the Board of Directors shall be included in the notice of the General Meeting if the candidate is supported by shareholders representing no less than 10% of the votes conferred by the company’s shares and the candidates have consented to the appointment.

Candidates proposed as members of the Board for the first time must be present at the General Meeting in which their appointment is decided upon, unless there is a weighty reason for their absence.

3. Duties of the Board of Directors

Under the Limited Liability Companies Act, the Board of Directors shall see to the administration of the company and the appropriate organisation of its operations. The Board is also responsible for the appropriate arrangement of the control of the company’s accounts and finances.

It is the Board’s duty to promote the interests of the company and all of its shareholders. The members of the Board shall not represent any parties in the company that proposed their membership.

In order to carry out its duties, the Board shall:

  • convene the General Meetings of Shareholders
  • direct and oversee the company’s operative management
  • appoint and discharge the company’s CEO
  • approve the CEO’s service contract and other benefits
  • approve the salaries and other benefits of the members of the Group Management Team
  • approve the company’s risk management principles
  • endorse the company’s long-term strategic and financial objectives
  • approve the budget, and
  • decide on significant individual investments and corporate and property acquisitions

The Board of Directors complies with the guidelines for insiders issued by Nasdaq Helsinki Ltd, the Finland Chamber of Commerce and the Confederation of Finnish Industries and is committed to acting in accordance with these and the company’s own insider guidelines. In addition, each member of the Board has an obligation of confidentiality with respect to any information he or she receives about the company or any other matter in his or her capacity as a Board member.

4. Duties of the Chair of the Board of Directors

The Board of Directors shall elect from amongst its number a chair and vice chair for one year at a time.

The Chair of the Board shall

  • convene meetings of the Board of Directors
  • approve the agenda of Board meetings drawn up by the CEO
  • ensure that minutes are taken for each Board meeting
  • liaise with both the CEO and Board members between meetings as necessary
  • ensure that the Board’s work is carried out in accordance with the provisions of these rules of procedure

5. Decision-making procedure of the Board of Directors

The Board of Directors shall constitute a quorum when more than half of the members are present. Decisions are made by majority vote. In the event of a tie, the chair shall have the casting vote. However, if there is a tie in the election of the chair, the election shall be decided by drawing lots.

According to the Limited Liability Companies Act, a member of the Board of Directors is disqualified from participating in the consideration of a matter pertaining to a contract between the member and the company. A member shall likewise not participate in the consideration of a matter pertaining to a contract between the company and a third party, if the member is to derive an essential benefit in the matter and that benefit may be contrary to the interests of the company. A Board member should always consider disqualifying himself or herself in a situation where a conflict of interest could objectively be considered to be exist, but always bearing in mind a member’s duty to take a position on company matters and to ensure that the company’s interests are served.

6. Meetings of the Board of Directors

The Board shall convene according to a previously agreed schedule, normally between 8 and 11 times a year, and holds extraordinary meetings, which may also be by telephone, when necessary. Board meetings are also held as necessary in connection with visits to the company’s various business locations, both in Finland and abroad. At least one Board strategy meeting shall be held each year to, among other things, confirm the company’s long-term strategic objectives.

The notice of the Board meeting and the key meeting materials shall be sent to Board members one week before the meeting. Minutes of the Board meetings shall be taken and signed by the chair of the Board, the person chosen at the meeting to scrutinise them and the person acting as the secretary of the meeting.

Members of the company’s operative management who participate regularly in Board meetings are the CEO, the CFO and, acting as the secretary of the meeting, the Chief Legal Officer, none of whom is a member of the Board. Two personnel representatives who are not members of the Board also participate in meetings of the Board. One of these representatives is elected by Lindex Group plc Council and the other by the association representing Lindex Group plc’a senior salaried employees.

The Board shall report the number of Board meetings held during the financial year and the average attendance of members at Board meetings, expressed as a percentage.

7. Evaluation of the Board’s performance

The Board shall conduct an annual evaluation of its performance. The purpose of the evaluation of the Board’s performance is to examine how the work of the Board has been carried out over the year and to serve as a basis for evaluating the Board’s methods and practices, its composition and the election of any new members.

8. Board Committees

The Board has appointed an Audit Committee and a Remuneration Committee from among its members, whose rules of procedure are approved by the Board. The Board remains responsible for the duties assigned to the committees, and the decisions within the competence of the committees are taken collectively by the Board. The Audit and Remuneration Committees report to the Board annually.

9. Remuneration of the members of the Board

The remuneration of the members of the Board is prepared by the Shareholders’ Nomination Board. The remuneration of the members of the Board is decided at the General Meeting.

The remuneration of the Board of Directors is described in the annually published remuneration statement (link opens in the same tab).