Management and governance

SOK:n hallintoneuvosto 2016

Matti Pikkarainen (s. 1953)
Oulu

  • teologian tohtori
  • puheenjohtaja 2013-
  • Osuuskauppa Arinan hallintoneuvoston puheenjohtaja
  • hallintoneuvoston jäsen 2004–
  • erovuorossa 2019

Maija-Liisa Lindqvist (s. 1951)
Lahti

  • talousneuvos
  • ensimmäinen varapuheenjohtaja 2013-
  • Osuuskauppa Hämeenmaan hallintoneuvoston puheenjohtaja
  • hallintoneuvoston jäsen 1997–
  • erovuorossa 2017

Antti Määttä (s. 1966)
Muurame

  • kauppat. maist.
  • toinen varapuheenjohtaja 2015–
  • Osuuskauppa Keskimaan toimitusjohtaja
  • hallintoneuvoston jäsen 2013-
  • erovuorossa 2019

SOK's Supervisory Board 2016

Matti Pikkarainen (born 1953)

Oulu

D. Th.

chairperson 2013–

chairperson of the Supervisory Board of the Osuuskauppa Arina cooperative

member of the Supervisory Board 2004–

outgoing in 2019

Maija-Liisa Lindqvist (born 1951)

Lahti

talousneuvos [Finnish honorary title]

first vice chairperson 2013–

chairperson of the Supervisory Board of the Osuuskauppa Hämeenmaa cooperative 

member of the Supervisory Board 1997–

outgoing in 2017

Antti Määttä (born 1966)

Muurame

M.Sc. (Business Administration)

second vice chairman 2015–

managing director of the Osuuskauppa Keskimaa cooperative

member of the Supervisory Board 2013–

outgoing in 2019

Jorma Bergholm (born 1954)

Helsinki

Managing Director

Helsingin Työväenyhdistys ry

chairman of the Supervisory Board of the Helsingin Osuuskauppa Elanto cooperative

member of the Supervisory Board 2005–

outgoing in 2017

Pentti Hämäläinen (born 1954)

Hamina

lawyer

chairman of the Supervisory Board of the Kymen Seudun Osuuskauppa cooperative

member of the Supervisory Board 2008–

outgoing in 2018

Henrik Karvonen (born 1972)

Kuusamo

managing director of the Koillismaan Osuuskauppa cooperative

member of the Supervisory Board 2014–

outgoing in 2018

Kimmo Koivisto (born 1956)

Salo

farmer

chairman of the Supervisory Board of the Suur-Seudun Osuuskauppa SSO cooperative

member of the Supervisory Board 2003–2004, 2007–

outgoing in 2019

Matti Timonen (born 1967)

Mikkeli

Managing director, building manager

chairman of the Supervisory Board of the Osuuskauppa Suur-Savo cooperative

member of the Supervisory Board 2014–

outgoing in 2018

Matti Manner (born 1953)

Naantali

Lawyer, law counsellor

chairman of the Executive Board of the Turun Osuuskauppa cooperative

member of the Supervisory Board 2016–

outgoing in 2019

Mika Marttila (born 1970)

Rauma

M.Sc. (B.A.)

managing director of the Osuuskauppa Keula cooperative

member of the Supervisory Board 2011–

outgoing in 2017

Anne Mäkelä (born 1965)

Kokkola

lawyer, LL.M. with court training

chairman of the Supervisory Board of the Osuuskauppa KPO cooperative

member of the Supervisory Board 2015–

outgoing in 2017

Ilkka Ojala (born 1949)

Tampere

M.Sc. (Eng.), M.Sc. (Admin.)

Managing Director

Chairman of the Supervisory Board of the Pirkanmaan Osuuskauppa cooperative

member of the Supervisory Board 2011–

outgoing in 2017

Hannu Pelkonen (born 1967)

Sotkamo

managing director of the Osuuskauppa Maakunta cooperative

member of the Supervisory Board 2015–

outgoing in 2018

Ilkka Pirskanen (born 1962)

Joensuu

Managing Director

chairman of the Supervisory Board of the Pohjois-Karjalan Osuuskauppa cooperative

member of the Supervisory Board 2015–

outgoing in 2019

Pekka Ritvanen (born 1955)

Kuopio

M. Sc. (Eng)

Managing Director

member of the Board of Directors of the Osuuskauppa Peeässä cooperative

member of the Supervisory Board 2014–

outgoing in 2017

Timo Santavuo (born 1960)

Pori

lawyer, LL.M. with court training

chairman of the Supervisory Board of the Satakunnan Osuuskauppa cooperative

member of the Supervisory Board 2000–

outgoing in 2018

Mervi Sillanpää-Jaatinen (born 1957)

Lappeenranta

B.Sc. (Econ.)

managing director of the Etelä-Karjalan Osuuskauppa cooperative

member of the Supervisory Board 2014–

outgoing in 2018

Matti Timonen (born 1956)

Nurmes

farmer

chairman of the Supervisory Board of the Jukolan Osuuskauppa cooperative

member of the Supervisory Board 2011–

outgoing in 2017

Elina Varamäki (born 1971)

Seinäjoki

Vice principal, docent

chairman of the Supervisory Board of the Etelä-Pohjanmaan Osuuskauppa cooperative

member of the Supervisory Board 2016–

outgoing in 2019

Kristian Westerholm (born 1969)

Inkoo

M.Sc. (Agr.)

Chairman of the Supervisory Board of the Varuboden-Osla Handelslag cooperative

member of the Supervisory Board 2016–

outgoing in 2019

 

Personnel representatives

Ulla Kivilaakso (born 1970)
Helsinki

business college graduate, diploma in marketing and
communications management (MJD)

Marketing manager

SOK Travel industry chain management
member of the Supervisory Board 2011–
outgoing in 2018

Iiris Merimaa (born 1962)

Helsinki

Administrative assistant

SOK Administrative Services and Risk Management

member of the Supervisory Board 2009–

outgoing in 2018

 

SOK's Executive Board 2016

1. Taavi Heikkilä

(born 1962), CEO, M.Sc. (B.A.)

Member of SOK's Executive Board 2007–2011, 2014–

With S Group 1987–

Chairman of SOK's Executive Board

2. Matti Niemi

(born 1955), Managing Director, M.Sc. (B.A.)

Helsingin Osuuskauppa Elanto cooperative

Member of SOK's Executive Board 2007–

With S Group 1982–

Vice chairman of SOK's Executive Board

3. Heikki Hämäläinen

(born 1966), Managing Director, M.Sc. (B.A.)

Osuuskauppa Suur-Savo cooperative

Member of SOK's Executive Board 2014–

With S Group 1990–

4. Tapio Kankaanpää

(born 1962), Managing Director, M.Sc. (B.A.)

Osuuskauppa PeeÄssä cooperative

Member of SOK's Executive Board 2012–

With S Group 1987–

5. Hannu Krook

(born 1965), Managing Director, M.Sc. (B.A.)

Varuboden-Osla Handelslag cooperative

Member of SOK's Executive Board 2016–

With S Group 2013–

6. Timo Mäki-Ullakko

(born 1963), Managing Director, M.Sc. (B.A.)

Pirkanmaan Osuuskauppa cooperative

Member of SOK's Executive Board 2013–

With S Group 1987–

7. Jouko Vehmas

(born 1956), Managing Director, M.Sc. (Econ.)

Kymin Seudun Osuuskauppa cooperative

Member of SOK's Executive Board 2001–2003, 2014–

With S Group 1980–

 

SOK Corporation's Corporate Management Team 2016

1. Taavi Heikkilä

(born 1962), CEO, M.Sc. (B.A.)

Member of SOK's Executive Board 2007–2011, 2014–

With S Group 1987–

2. Jari Annala

(born 1964), Executive Vice President, CFO, M.Sc. (B.A.)

Finances and administration

With S Group 1989–

 3. Arttu Laine

(born 1970), Executive Vice President Business operation groups, procurement and logistics
M.Sc. (B.A.),

groups, procurement and logistics
M.Sc. (B.A.)

With S Group 1995–

4. Seppo Kuitunen

(s. 1961) General Counsel, LL.M.

Legal affairs

With S Group 2005–

5. Susa Nikula

(born 1970), Executive Vice President, M.A. (Ed.)

Personnel

With S Group 1995–

6. Jorma Vehviläinen

(born 1967), Executive Vice President,

SOK Liiketoiminta Oy, M.Sc. (B.A.)

With S Group 1991–

7. Veli-Pekka Ääri

(born 1968), Executive Vice President

Customer Relations, Communications, Marketing and Digital Services, M.Sc.

With S Group 2011–

 

SOK Corporation's Corporate Governance and Management System

Applicable Rules

SOK is a Finnish cooperative, whose decision-making and governance are subject to the provisions of the Cooperatives Act, other regulations concerning the operations of the business areas, and SOK's Statutes. The operations of the subsidiaries are regulated by the Limited Liability Companies Act, among others, and in addition, SOK Corporation's operations are governed by the operating principles, operating policies and investment and approval guidelines confirmed by SOK's Executive Board, as well as the rules of procedure confirmed for different bodies.

In June 2015, the Securities Market Association approved a Corporate Governance Code for listed companies (available at http://cgfinland.fi/), which became effective on 1 January 2016. In accordance with a statement released by the Finland Chamber of Commerce in 2006, other nationally significant institutions should also adhere to the Code to the extent possible considering their special characteristics. SOK adheres to the Corporate Governance Code to the extent that it is a cooperative form of business and that the Code is relevant considering its special characteristics. 

Cooperative Meeting

The Cooperative Meeting is SOK's highest decision-making body. Each member cooperative enterprise of SOK is eligible to send a maximum of five representatives to the Cooperative Meeting, all of whom have the right to address the meeting, but only one of whom has the right to vote on behalf of the cooperative enterprise. The execution of ownership rights and the voting rights are based on ownership shares and the Cooperative's Statutes.

The task of the Annual Cooperative Meeting is to attend to the matters set out in the Statutes, such as the adoption of the financial statements, disposal of surplus shown in the balance sheet, granting release from liability to the members of the Supervisory Board and Executive Board, and the election and remuneration of the Supervisory Board and the auditors. In addition, the Cooperative Meeting attends to other matters listed on the agenda. An Extraordinary Cooperative Meeting can be convened when necessary.

Supervisory Board

The Cooperatives Act does not require the setting up of a Supervisory Board, but a Supervisory Board has been set out in SOK's Statutes as part of SOK Corporation's administrative model. The role of the Supervisory Board is to represent the extensive grass-roots membership and to act as a forum on which the Cooperative's joint position on major strategic issues is defined. Its duty is to determine overall policies and to safeguard the members' interests. The Supervisory Board confirms the strategy of S Group and SOK Corporation and the key objectives of SOK Corporation on the Executive Board's proposal and monitors the implementation thereof. Matters concerning the actual operational management are handled by SOK's Executive Board and line management.

The Supervisory Board oversees that the administration of the cooperative society and SOK Corporation complies with the law, the Statutes, and the decisions of the Cooperative Meeting and the Supervisory Board, and that such administration is in the cooperative society's best interests. The Supervisory Board approves and dismisses members of the cooperative society and appoints and dismisses the Chief Executive Officer and other members of the Executive Board, and also decides on the remuneration of Executive Board members other than those who are employed by the cooperative society.

Furthermore, the Supervisory Board decides on the principles of cooperation for S Group's operations and long-term plans.

The Supervisory Board has ratified rules of procedure for itself.

The chairman of the Supervisory Board and the two vice-chairmen comprise the Committee of Presiding Officers, which assists the Supervisory Board in carrying out its duties. The Chief Executive Officer attends the meetings of the Committee of Presiding Officers. In addition, the Committee of Presiding Officers decides on, among other things, on the emoluments of the CEO in accordance with guidelines provided by the Supervisory Board.

The members of the Committee of Presiding Officers are:

Chairman Matti Pikkarainen (born 1953), Cathedral Dean, D. Th.

1st vice-chairperson Maija-Liisa Lindqvist (born 1951), talousneuvos [Finnish honorary title], business college graduate

2nd vice-chairman, managing director Antti Määttä (born 1966), M. Sc. (Econ.)

The Supervisory Board has established four permanent committees: the Nomination Committee, Compensation Committee, Audit Committee, and Cooperative Committee, all of which have their own rules of procedure.

The Supervisory Board has 14–27 members, of whom 12–25 are elected by the Cooperative Meeting based on the proposals by the cooperatives. A person elected to the Supervisory Board must be a Finnish citizen and member of a cooperative. A person may not be elected as a member of the Supervisory Board if they turn 68 before the beginning of the term of office. In addition to the members elected by the Cooperative Meeting, the personnel of the cooperative society can nominate two members and designated deputies for them from among themselves to the Supervisory Board in accordance with the Act on Personnel Representation in the Administration of Undertakings.

The Supervisory Board had 20 members and two personnel representatives in 2016. In 2016, the Supervisory Board convened five times. The attendance rate of the Supervisory Board members in the meetings was 96.

The special compensation for the chairman of the Supervisory Board was EUR 4,000 per month, and the vice-chairmen were each paid a compensation of EUR 2,000 per month in 2016. The meeting compensation for the chairmen and members of the Supervisory Board in 2016 was EUR 460 for each meeting and per day spent carrying out a specific assignment.

Executive Board

Election and Composition of the Executive Board

According to SOK's Statutes, the Executive Board is composed of the Cooperative's CEO, acting as chairman, and of a minimum of three and a maximum of eight other members. The Supervisory Board elects the members of the Executive Board for a term of one calendar year on the basis of the Nomination Committee's proposal. According to the rules, a person being elected must be a Finnish citizen and under 68 years of age at the beginning of the term of office. The goal is to ensure sufficient rotation, but, on the other hand, continuity is considered important in the work of the Executive Board.

In 2016, SOK's Executive Board had seven members, six of whom were managing directors of cooperative enterprises. In accordance with the cooperative's rules, SOK's Chief Executive Officer Taavi Heikkilä was the Chairman of the Executive Board. In its meeting on 24 November 2016, SOK's Supervisory Board elected the following members to the Executive Board for 2017:

Chairman Taavi Heikkilä (born 1962), CEO, M.Sc. (Econ.)

Heikki Hämäläinen (born 1966), managing director, M.Sc. (B.A.)

Tapio Kankaanpää (born 1962), managing director, M.Sc. (B.A.)

Hannu Krook (born 1965), managing director, M.Sc. (B.A.)

Timo Mäki-Ullakko (born 1963), managing director, M.Sc. (B.A.)

Vice-Chairman Matti Niemi (born 1955), managing director, M.Sc. (B.A.)

Olli Vormisto (born 1967), managing director, M.Sc. (B.A.)

Duties of the Executive Board

The Executive Board represents the cooperative society and attends to its administration and the due arrangement of its operations within the framework of SOK Corporation and in compliance with the applicable legislation and rules. The duty of the Executive Board is to prepare strategic decisions for presentation to the Supervisory Board, as well as to decide on competition strategies and the operating plans of both SOK and its subsidiaries.

In addition, the Executive Board, upon a proposal from the CEO, decides on setting up SOK's Corporate Management Team and on appointing its members and their compensation, with the exception of the CEO. The Executive Board appoints a Nomination Working Group, which prepares a proposal on the composition of the Boards of Directors and Business Area Boards of SOK's subsidiaries for decision by the Executive Board. Rules of procedure have been confirmed for the Executive Board.

SOK's Executive Board has not deemed it necessary to establish the committees mentioned in the Corporate Governance Code to prepare the matters to be discussed by the Executive Board. Corresponding committees have been established by the Supervisory Board.

Meetings of the Executive Board

The Executive Board convenes as required and upon the chairman's invitation, and forms a quorum when more than half of the members are present, including the chairman or vice chairman of the Executive Board. The Executive Board regularly evaluates its work and procedures by carrying out a self-assessment once a year.

The Executive Board convened 11 times during 2016, and the members' attendance rate was 99 per cent. The members of the Executive Board were paid a total of EUR 115,200 in remuneration in 2016. As the chairman of the Executive Board, the CEO of SOK does not receive separate remuneration for their work in the Executive Board. The chairman and vice chairmen of the Supervisory Board are also entitled to attend the meetings of the Executive Board.

CEO

Contrary to the recommendation of the Corporate Governance Code for listed companies, the Chief Executive Officer employed by the cooperative society is the chairman of SOK's Executive Board. Because the CEO is the chairman of the Executive Board, the Supervisory Board appoints the CEO. The duty of the CEO is to manage the operations of the Executive Board and the cooperative society in accordance with legislation, SOK's Statutes, and the decisions and rules of the governing bodies.

CEO Taavi Heikkilä (born 1962) was chairman of SOK's Executive Board and CEO, as referred to in the Cooperatives Act. In 2016, SOK's CEO was paid salary, including fringe benefits, and bonuses in the total amount of EUR 839,416. SOK's CEO had a corporate residence as a fringe benefit, and its taxation value is included in the aforementioned remuneration amount. The CEO is covered by a defined contribution-based supplementary pension and the retirement age is 63 years.

 

SOK's Corporate Management Team

The duties of SOK's Corporate Management Team include assisting the CEO in the management of SOK Corporation and S Group. The Corporate Management Team coordinates and prepares, among other things, the central proposals made to the Executive Board. Such proposals include business strategies, target levels, operating plans and budgets, as well as major investment projects and disposals of S Group and SOK Corporation. In addition, the Corporate Management Team discusses operational matters concerning all of SOK Corporation's areas of responsibility. The retirement age of the members of SOK's Corporate Management Team is 60–63 years, determined in accordance with personal executive contracts.

At the end of the year, the Corporate Management Team had six members, and it convened 20 times in 2016. In 2016, the Corporate Management Team was paid a total of EUR 1,887,682 in salaries and bonuses. This amount also includes fringe benefits.

 

Subsidiaries

Primarily, the chairman of the Board of Directors of a subsidiary is a member of the Corporate Management Team, employed by SOK and responsible for the line of business in question. The CEO was the chairman of SOK Liiketoiminta Oy's Board of Directors. SOK's Executive Board nominates the members of the subsidiaries' Boards of Directors for the subsidiaries' Annual General Meetings to decide on. The members of the Boards of Directors of subsidiaries are primarily elected from amongst S Group's employees.

The subsidiary's Board elects the company's managing director, but the election is subject to approval by SOK's Executive Board. The managing directors of subsidiaries do not, as a rule, have seats on the Board of Directors of the company in question. The operations of the subsidiaries are regulated by, among others, the Corporation-wide principles and operating policies decided by SOK's Executive Board.

 

Chain Management

SOK's chain management units are responsible for developing the business area / chains and the value chain and preparing matters to be decided on by SOK's Executive Board. Key responsibilities include the preparation of the competition strategy, chain business idea and annual operating plan. The business chain management units are managed by chain directors, who are included in the responsibility area of Executive Vice Presidents at the Corporate Management Team level. Chain management units are provided inspiration and assistance by business support teams. The teams consist of 4–6 representatives of regional cooperatives' managing directors and representatives of SOK's chain management. An Executive Vice President of SOK serves as the chairperson of the business support teams.

SOK's support and service functions also have their own support teams, which provide assistance and inspiration to the management of the SOK function responsible for providing and developing the support function in question. The support teams include managing directors of regional cooperatives and directors of the responsibility area in question, and a member of SOK's Corporate Management Team responsible for the support function in question chairs the teams. 

The business support teams and service operations support teams are not decision-making bodies by nature, and are part of SOK's management system reform confirmed in 2014. A member of the SOK Corporate Management Team responsible for the business or support functions in question is in charge of selecting the support team members, and the SOK Executive Board is informed of the selection. The management model streamlines the authority and responsibilities of the chains and the service business.

 

Management Bonus Scheme

SOK Corporation's entire personnel in Finland are covered by a bonus scheme. SOK's Executive Board decides on the bonus scheme for the management (the Corporate Management Team), and the Supervisory Board's Committee of Presiding Officers decides on the bonus scheme for the CEO. The bonus scheme for the senior management is based on both short-term and long-term objectives. The maximum level of the Corporate Management Team's short and long-term bonuses corresponds, at a maximum, to three months' monthly salary per year.

The Supervisory Board has set up a permanent Compensation Committee whose task is to assess and develop the compensation systems and principles for S Group's senior management and to issue recommendations on compensation to SOK's decision-making bodies.

 

Audit

The Annual Cooperative Meeting elects an auditor to audit the financial statements and consolidated financial statements as well as the accounting records and administration of the cooperative society. The auditor must be Authorised Public Accountants referred to in the Auditing Act.

The Annual Cooperative Meeting elected KPMG Oy Ab, Authorised Public Accountants, as SOK's auditor for 2016, with Jukka Rajala, APA, as the principal auditor.

In 2016, the auditing fees paid by the SOK Corporation companies in Finland, the Baltic countries and Russia for auditing operations amounted to EUR 478,793, and other fees not related to auditing amounted to EUR 110,664.

 

Internal Control, Internal Audit, and Risk Management

SOK's Executive Board is responsible for duly organising the cooperative's operations and management and for the legality and reliability of the accounting records, financial management, and routine management. In addition, the Chief Executive Officer, SOK's unit directors, and the Boards of Directors of the subsidiaries and their managing directors carry out the management and control of business activities in day-to-day operations within their own areas of responsibility. In November 2016, SOK's Executive Board approved the operating policy for SOK Corporation's internal control and the Compliance policy.

The Corporation's internal audit is carried out by the internal control functions of SOK and its subsidiaries. SOK's Executive Board reviews the annual plan for SOK's internal audit every year. The internal audit function regularly reports on the findings of the internal audit to the CEO, Executive Board, and the Supervisory Board's Audit Committee.

SOK's Executive Board has confirmed a risk management policy for identifying and analysing risks across the Corporation and for defining and determining risk management measures as part of operational planning. The key risks in the Corporation's operations and strategic objectives are identified on the basis of the analyses and discussed and decided on by the Executive Board annually. The management of SOK Corporation's subsidiaries and units reviews and defines each unit's major risks and the defined risk management measures and is responsible for implementing risk management measures.

Precautions have been taken for property, loss-of-profits and liability damage risks of operations through measures, such as contingency plans and insurance. SOK Corporation's risk management expert organisation directs and develops risk management in S Group and provides support for risk management. SOK's internal audit function assesses the sufficiency and functioning of the risk management processes.

 

Financial Reporting

SOK Corporation publishes its financial statements in February and its interim report for six months in August. Furthermore, the development of S Group's retail sales is covered in quarterly reports. SOK Corporation's Annual Report is published at the Annual Cooperative Meeting in April.

 

Communications

Up-to-date information concerning SOK Corporation and S Group, including bulletins, are available on the Group's website at www.s-kanava.fi. SOK's Communications and Community Relations unit is in charge of producing and updating the information.

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