Nordic Morning Group Plc is a Finnish public limited company that is 100 percent owned by Valtion kehitysyhtiö Vake Oy. Its corporate governance system complies with the laws of Finland, government resolutions on state ownership policy, Nordic Morning Group’s Articles of Association and, where applicable, the Corporate Governance Code 2015 for Finnish listed companies.

The Nordic Morning Group comprises the parent company, Nordic Morning Group Plc, and its subsidiaries.

The Corporate Governance Statement is issued separately from the Board of Directors’ report on operations. The Corporate Governance Statement is approved by the company’s Board of Directors.

Governing bodies

Responsibility for the Nordic Morning Group’s governance and operations rests with Nordic Morning Group Plc’s governing bodies, which consist of the General Meeting of Shareholders, the Board of Directors, and the CEO. The General Management Team consist of Group Executives; the CEO, the CFO, the CHRO, the CSO and each Business Area Head (Nordic Morning, Edita Prima and Edita Publishing) in accordance with the policies defined by the Board of Directors. The GMT directs, guides, develops and supervises the operations of the Group´s Business Areas. The management of the subsidiaries is under the control of the Heads responsible for each business areas. The GMT directs and implements the Group’s Action Plan 2020-2022 that covers strategic business development, financial administration, talent development, communications strategies and information management.

General Meeting of Shareholders

Nordic Morning Group Plc’s supreme decision-making body is the General Meeting of Shareholders. The General Meeting makes decisions on the matters specified in the Limited Liability Companies Act and the Articles of Association. The General Meeting decides on the acceptance of the financial statements and consolidated financial statements, the distribution of dividends, discharging the members of the Board of Directors and the CEO from liability, the number of members on the Board of Directors, and the compensation payable to the members of the Board of Directors and the auditor. The General Meeting elects the Chairman, Vice-Chairman and members of the Board of Directors and the company’s auditor.

The General Meeting is convened at least once a year. The Annual General Meeting is held before the end of May. The Board of Directors is responsible for convening the General Meeting in accordance with the Articles of Association and the Limited Liability Companies Act.

Board of Directors

The Board of Directors is responsible for the company’s strategic development as well as supervising and guiding the company’s business operations and management. Pursuant to the Limited Liability Companies Act, the duties of the Board of Directors include representing the company and ensuring that the company’s management, assets and business operations are appropriately organized and supervised.

The Board of Directors has rules of procedure that are reviewed annually. The Board of Directors meets according to a pre-agreed annual plan and meeting schedule.

The Board’s key functions are:

• ensuring that the company is appropriately managed and that its operations are appropriately organized
• ensuring that accounting, financial management and risk management are appropriately organized
• the strategic development and steering of business operations and operating segments
• approving the Group’s values and significant operating policies
• approving the annual operating plan and budget
• approving the consolidated financial statements, parent company financial statements and the annual report
• processing interim reports
• appointing and dismissing the CEO
• approving the organizational structure and the structure of the compensation system
• setting annual performance targets for the company and its management and monitoring the achievement of targets
• convening the General Meeting
• establishing committees and deciding on their members and rules of procedure
• deciding on significant investments, divestments and restructuring measures
• deciding on significant property transactions and financing measures
• self-evaluation
• assessing the independence of the members of the Board of Directors

The Board of Directors has approved the most significant operating guidelines and policies pertaining to the entire Group, the purpose of which is to ensure that the Group’s business is carried out appropriately.

To support the development of its activities, the Board of Directors evaluates its activities annually. The Board also assesses the independence of its members from the company and its shareholders annually.

The Annual General Meeting elects four to eight members to the Board of Directors for a term of one year. The General Meeting also elects the Chairman and Vice-Chairman of the Board of Directors. The members of the Board of Directors must be suitable for their task and the election of Board members complies with the Finnish Government Resolution regarding the equal representation of the sexes. The term of the members of the Board of Directors expires at the end of the Annual General Meeting that first follows their election.

In 2019, the Board of the Directors consisted of Per Sjödell (Chairman), Jukka Ruuska (Deputy Chairman), and members Pekka Hurtola, Ingrid Jonasson Blank, Anne Korkiakoski and Mervi Airaksinen. In 2019 the Board of Directors convened 11 times. The average attendance rate was 98 percent.

Board of Directors	Born	Nationality	Education	Occupation	Member since	Attendance at Board meetings	Attendance at Audit and Structure Committee meetings
Mr. Per Sjödell, Chairman	1972	Swedish	MBA	Founder and Chairman of Red City PR SARL	2016	11/11	7/7
Mr. Jukka Ruuska, Deputy Chairman	1961	Finnish	LLM, MBA	CEO of the Asiakastieto Group Plc	2016	11/11	6/7
Mr. Pekka Hurtola (from March 21, 2018)	1959	Finnish	LLM	Senior Financial Counselor, Ownership Steering Department, Finnish Prime Minister's Office	2018	11/11	7/7
Ms. Ingrid Jonasson Blank	1962	Swedish	BSc (Econ)		2017	10/11	-
Ms. Anne Korkiakoski	1964	Finnish	MSc (Econ)	Professional Board Member	2018	11/11	-
Ms. Mervi Airaksinen (from March 18, 2019)	1980	Finnish	MSc (Econ)	Managing Director of IBM Finland Oy	2019	8/8	-
Ms. Anni Ronkainen (until March 18, 2019)	1966	Finnish	MSc (Econ)	EVP, Chief Digital Officer at Kesko	2015	3/3	-

The Board of Directors assesses that all of its members are independent of the company. All members except Pekka Hurtola are independent of the company’s sole shareholder, Valtion kehitysyhtiö Vake Oy. The members of the Board of Directors did not own any shares or share-based rights in the parent company or other Group companies.

Board committees

The Board committees assist the Board by preparing the business to be handled by the Board. In 2019, the Board had one permanent committee, the Audit and Structure Committee.

Audit and Structure Committee

The members of the Audit and Structure Committee are appointed by the Board of Directors. In accordance with its rules of procedure, the Committee assists the Board by monitoring the financial situation and performing supervisory tasks, directing reporting practices and internal audit functions, supervising risk management and overseeing auditing. In addition, the Audit and Structure Committee monitors the development of the Group’s structure and key business areas. The Committee also prepares matters relating to executive appointments, the terms and conditions of corporate executives’ contracts, their salaries, compensation systems and principles of compensation.

In 2019, the Audit and Structure Committee consisted of three members: Per Sjödell (Chairman), Jukka Ruuska and Pekka Hurtola. The Committee met seven times with an attendance rate of 95 percent.

CEO

The Board of Directors appoints the CEO, who is responsible for managing and developing the Group’s operations in accordance with the provisions and guidelines laid down in the Limited Liability Companies Act and the Articles of Association and as issued by the Board. The CEO is responsible for ensuring the legality of the accounting and the reliable organization of asset management. The CEO prepares the matters discussed in Board meetings and reports to the Board on his duties.

Since January 12, 2017, the CEO of Nordic Morning Group Plc has been Anne Årneby.

General Management Team consisting of Group executives

The General Management Team consists of the CEO, the CFO, the CHRO, the CSO and each Business Area Head (Nordic Morning, Edita Prima and Edita Publishing).

The executives report to the CEO and their duties include assisting the CEO in the preparation of strategy, business plans and other significant matters. The executives monitor the development of the Group’s business and performance and takes any measures needed to rectify poor performance. The executives are responsible for risk management and reporting in their respective areas of responsibility. The General Management team meet once a month.

General Management Team	Position and responsibility area	Born	Education
Ms. Anne Årneby	CEO of Nordic Mornin Group	1963	MBA
Ms. Kristiina Kujala	CFO, Nordic Morning Group	1974	MSc (Econ)
Ms. Katarina von Troil	CHRO, Nordic Mornin Group	1963	MSc
Mr. Teemu Takala	CSO, Nordic Morning Group	1974	MBA
Mr. Heikki Autio	Managing Director, Edita Prima and Managing Director, Edita Publishing	1965	MSc (Eng)
Mr. Jukka Sundquist	Managing Director, Nordic Morning Finland	1978	BBA
Ms. Märit Sareyko	Managing Director, Nordic Morning Sweden	1967	MSc (Eng)

Internal auditing

The purpose of internal control and risk management is to ensure that the company’s operations are efficient and profitable, that the supply of information is reliable, and that regulations and policies are observed. Internal auditors are responsible for helping the Board and the CEO to assess the appropriateness and effectiveness of the Group’s processes and systems, the efficiency and adequacy of internal control, and the accuracy and adequacy of the accounting and reporting. In the Nordic Morning Group, internal auditing goals are decided upon annually by the Board by means of, for example, risk assessments. Practical implementation is entrusted to an independent external firm of authorized public accountants.

The internal audit reports to the Board of Directors or the Audit and Structure Committee. Internal audit assessments are distributed to Nordic Morning Group Plc’s Board of Directors, Audit and Structure Committee, auditors and CEO. The CEO, together with other executives, is responsible for ensuring that any actions required on account of observations made by internal auditors are duly initiated in accordance with the Board of Directors’ instructions.

Taking into consideration the size of the company and its level of internal control in 2019, no separate assignment concerning internal auditing was made during the year.

Auditing

The authorized public accountant firm elected by the Annual General Meeting to audit the parent company, Nordic Morning Group Plc, audits the entire Group with regard to accounting, financial statements, and administration each financial year. In addition to the audit report issued in connection with the company’s financial statements, the auditors also regularly report on their findings to the board and the board’s Audit and Structure Committee.

Nordic Morning Group Plc’s Auditor is KPMG Oy, with Kati Nikunen, APA, acting as the auditor in charge in 2019. The total fees paid to the auditor for auditing and other services amounted to EUR 109 000.

Risk management

The Board of Directors is responsible for the appropriate organization of risk management. Risk management is the part of the Board of Directors’ annual clock.

Risk management is an inseparable part of strategic planning and operational goal setting. Risk management is based on an organization-wide approach to identifying, assessing, managing, and monitoring material risks. The CEO and other executives ensure that risk management is a continuous, integral part of the Group’s day-to-day management and operations. The CEO, CFO, CHRO, CSO and CIO together with the Business Area Heads identify and monitor risks, develop and coordinate risk management activities, and update the Group’s risk profile. This is a well-defined part in Nordic Morning Group´s Action Plan.

The executives report to the Board on risks by business area. Unless there is a need for ad-hoc reporting, the CEO reports to the Board on risk management annually in conjunction with budgeting. The Board of Directors deals with the most significant risks and evaluates the efficiency of risk management at least once a year. The external audit monitors risk management as part of the regular auditing program.

Internal control

The Board of Directors, assisted by the Audit and Structure Committee, is responsible for the organization of internal control. The CEO manages the implementation of control and reports on it regularly to the Board.

Internal control is an integral part of the company’s governance and its management system. The internal control of operations is based on supervision and control systems built into the management system. The action plan and the regular reporting based on the action plan are, in addition to monthly financial reports, key practices that support management and internal control. Internal control is not a separate process. As part of the company’s functions, it covers all of the company’s operating principles, guidelines and systems. The monitoring of policies and instructions is carried out by centralized support functions such as financial management, human resource management and information management, as well as by the external and internal audit.

The objective of internal control aimed at reliable financial reporting is to ensure that the reporting is reliable and complies with generally accepted principles, applicable legislation and regulations governing the preparation of financial statements. The company uses centralized financial and cash management. Financial reporting is based on financial processes, in which dangerous combinations of duties are avoided, and on internal policies such as approval authorizations, the investment policy, the financing policy and the currency policy. The achievement of financial targets and balance sheet management are monitored through monthly Group-wide reports. A semi-annual review is drawn up together with the interim financial statements for the first half-year.

Corporate responsibility

Nordic Morning Group releases annual corporate responsibility reports as part of annual reports. The report is prepared according to the GRI (Global Reporting Initiative) guidelines. The corporate responsibility program is based on the triple bottom line: people, profit and planet. The program is firmly integrated within Nordic Morning Group’s business strategy. The ultimate goal of Nordic Morning Group’s Board of Directors, the Board Committees and other executives is to operate our business in a responsible way.

CR aspects are re-evaluated annually. Nordic Morning Group aim to be pioneer in developing communications, developing good leadership, attracting and retaining employees and in enhancing environmental responsibility. Goals are set annually and followed regularly.

Compensation

Compensation of board members

The Annual General Meeting decides on the compensation of Board members annually. Members of the Board and its committees are remunerated financially. Members of the Board are not entitled to incentive systems based on shares or share derivatives.

Compensation of the CEO and corporate executives

In 2019 the compensation of the Group CEO, Group executives and Business Area management teams consists of a fixed monthly salary and standard benefits. Parts of the corporate executives are also eligible for a performance-based incentive program. Based on set Group performance targets no pay-outs related to the incentive program were carried out in 2019.

Nordic Morning Group does not use incentive systems based on shares or share derivatives.

Furthermore, the business areas can apply incentive systems based on sales. These systems do not overlap with the Group’s performance-based incentive system.

The Board of Directors of Nordic Morning Group decides the terms and conditions of the contracts as well as the compensation of the CEO and the Group executives. The Board also decides on the principles of compensation for other key positions.

Upon termination of their contracts, the CEO and other members of the Group executives will be entitled to the salary paid for the period of notice as well as benefits. The period of notice for the CEO when terminating the employment is six months for both parties. The period of notice for terminating the employment of other members of the Group executives is six months when notice is served by the employer and two to three months when notice is served by the corporate executive in question. Upon termination of employment by the employer, the CEO will be entitled to compensation equivalent to six months’ salary in addition to the salary paid for the period of notice, and other members of the Group executives will be entitled to compensation equivalent to three to six months’ salary in addition to the salary paid for the period of notice. Upon resignation, the corporate executive in question will only be entitled to the salary paid for the period of notice as well as benefits.

The CEO’s retirement age is 65.

Compensation in 2019 / salaries and fees	EUR 1,000
Mr. Per Sjödell, Chairman	70
Mr. Jukka Ruuska, Deputy Chairman	37
Ms. Mervi Airaksinen (from March 18, 2019)	22
Mr. Pekka Hurtola	32
Ms. Ingrid Jonasson Blank	32
Ms. Anne Korkiakoski	32
Ms. Anni Ronkainen (until March 18, 2019)	7
Ms. Anne Årneby CEO of Nordic Morning Group	253
Other management team members	1124

Related party transactions

The related party transactions of the members of the Group’s Board of Directors and the Managing Directors of Group companies are surveyed annually. In the event of business transactions with related parties, Nordic Morning Group ensures that any potential conflicts of interest are appropriately taken into consideration in decision-making. In the event that business transactions with related parties are material from the company’s perspective and they deviate from the ordinary course of business or ordinary market terms, Nordic Morning Group will provide an explanation of the decision-making procedure concerning the related party transaction in the company’s Corporate Governance Statement.

The groups related parties also include the parent company, subsidiaries and associated companies. Sales of goods and services conducted with a related party are based on market prices. Related party transactions are reported in the notes to the parent company’s financial statements.