Corporate Governance

 

The governance of Elektrobit Corporation (hereinafter "Company") is determined by the Company's Articles of Association, the laws of Finland (such as the Finnish Companies Act and Securities Market Act) and the Company's Corporate Governance Code. The Company follows with some exceptions the Finnish Corporate Governance Code 2010 prepared by the Finnish Securities Market Association ("Finnish Governance Code"). The Governance Code may be viewed, inter alia, at the Finnish Securities Market Association website at www.cgfinland.fi.

The Company has departed from an individual recommendation of the Finnish Governance Code. The departure concerns the gender composition of the Board (Recommendation 9) as explained in further detail below. According to the Finnish Governance Code, one element of a diverse composition of the board is to have both genders represented on the board. The Company has departed from this recommendation, as the Annual General Meeting held on April 11, 2013 did not elect both genders to the Board of Directors. The proposal adopted by the Annual General Meeting regarding the composition of the Board was made by shareholders who represented approximately 49.9% of the shares of the Company. Such shareholders were informed about the content of Recommendation 9 by the Board of Directors of the Company. According to the information received, the shareholders who made the proposal, on the one hand, wanted to emphasize the continuity of the Board composition due to foreseen focus areas in the Board work and did not, on the other hand, in view of the size and nature of the Company's operations, consider it appropriate to increase the number of the Board members from the previous five members. The management of the Company and the composition of the Board are thereby based on strong ownership steering and, thus, the main shareholders have a significant representation in the Company's Board. The Company does not have a nomination committee.

This Corporate Governance Statement has been made according to recommendation 54 and the applicable legislation. This Statement is made separately from the Report by the Board. The Board's Audit and Finance Committee and the Company's auditor have reviewed this Statement.

The statutory governing bodies of the Company are the Shareholders' meeting, Board of Directors, Chief Executive Officer and the Auditor. Other group management and the below described business segments' management support the statutory governing bodies of the Company. The Company's domicile is Oulu.

The operative business of Elektrobit Group takes place in business segments (sub-groups) formed branch-by-branch. The external reporting of the Group is also based on these business segments which are the Automotive Business Segment and the Wireless Business Segment. The Presidents of the sub-group's parent companies report the segment business to the Board of Directors of each sub-group's parent company ("Segment Board"). Segment Boards comprise the Company's CEO as the Chairman, and one or more Board members of the Company and possibly also one or more external expert members. Segment Board members are elected based on preparation of the Company's Board. Operative business decisions are made in each Business Segment. The Company's Corporate Governance Code and this Corporate Governance Statement are publicly available at the Company's website at www.elektrobit.com.