Board Committees and Internal Audit

Board Committees

The Board has established three permanent committees, an audit committee, a remuneration committee and a risk committee. The Board of Directors has confirmed rules of procedure for these committees in accordance with the Finnish Corporate Governance Code 2015. The minimum number of members is three in all the committees. The Board has confirmed written charters for the committees. The committees report on their work regularly to the Board but they do not have decision-making powers independent from the Board.

Audit Committee

The audit committee is established to ensure the proper functioning of corporate governance, in particular, to ensure the overseeing of the accounting and financial reporting, Company’s internal control systems and work of external auditors.

In addition, the Committee assists the Board in other duties related to the Committee’s work as specified by the Board.

The purpose of the Committee is to assist the Board by preparing the committee-dedicated matters for the Board.

The members of the Committee must be sufficiently qualified to perform the responsibilities of the Committee and at least one member shall have expertise specifically in accounting, bookkeeping or auditing. Further, the members of the Committee shall be independent of the Company and at least one of the members shall be independent of significant shareholders.

The audit committee consists of Pieter van Groos (chairman), Juhani Vanhala and Erik Ferm. All members of the audit committee are independent of significant shareholders, Erik Ferm is independent of the Company. The Committee convened twice in 2016.

The Committee shall:

  1. monitor the financial status on the company;
  2. monitor the reporting process of financial statements and interim reports; and assess the draft financial statements and interim reports;
  3. assess the efficiency of the company’s internal controls, internal auditing and risk management system;
  4. monitor the statutory audit and review all material reports from the auditor;
  5. assess the independence of the auditors, in particular with regard to their ancillary services;
  6. prepare for the Board the proposals to the annual general meeting regarding the election of the auditor(s) and their remunerations;
  7. review the auditors' and internal auditors' plans and reports;
  8. review the company's corporate governance statement;
  9. prepare for the Board the group’s risk management policies;
  10. prepare for the Board any decisions on significant changes in the accounting principles or in the valuations of the group's assets;
  11. assess the group's compliance with laws and regulations; and
  12. maintain contact with the auditors.

The Committee may also discuss other matters and duties appointed to it by the Board.

Remuneration Committee

The remuneration committee is established to ensure the proper functioning of corporate governance, in particular, to ensure the efficient preparation of matters pertaining to the remuneration of the members of the Board, the CEO and other executives of the company as well as the remuneration schemes of the personnel.

In addition, the Committee assists the Board in other duties related to the Committee’s work as specified by the Board.

The purpose of the Committee is to assist the Board by preparing the committee-dedicated matters for the Board.

The members of the Committee must be sufficiently qualified to perform the responsibilities of the Committee. The majority of the members of the Committee shall be independent of the company.

The remuneration committee consists of Juhani Vanhala (chairman), Pieter van Groos and Lea Liigus. All members of the remuneration committee are independent of the significant shareholders but not independent of the Company. The Committee did not convene during 2016.

The Committee prepares the following matters for the Board, and where the matter calls for a decision, the Committee prepares decision proposals to the Board or to the general meeting, as applicable:

  1. compensations, pensions, benefits and other material terms of the contract of the members of the Board, the CEO and the management team;
  2. incentive and retention plans of the Board, the CEO and the management team;
  3. the CEO's and the other executives' performance reviews;
  4. assessment and development of the HR policy and leadership;
  5. equity-based incentive plans;
  6. the principles of the company's compensation policies;
  7. the management's participation in the boards' of directors of the group companies and of external companies; and
  8. major organisational changes.

In addition, the Committee shall answer questions related to the remuneration statement at the general meeting.

The Committee may also discuss other matters and duties appointed to it by the Board.

Risk Committee

The risk committee is established to ensure that risks are identified, monitored and can be managed.

In addition, the Committee assists the Board in other duties related to the Committee’s work as specified by the Board.

The purpose of the Committee is to assist the Board by preparing the committee-dedicated matters for the Board.

The members of the Committee must be sufficiently qualified to perform the responsibilities of the Committee.

The risk committee consists of Erik Ferm (chairman), Clemens Krause and Lilita Gribonika. All members of the risk committee are independent of significant shareholders and Erik Ferm is independent of the Company. The Committee convened 3 times during 2016.

The Committee shall work with Ferratum team members to establish and maintain a framework to

  • identify new and existing material risks pertaining to Ferratum and its business;
  • regularly classify, monitor, calibrate probability and severity of risks: and
  • where needed, suggest actions to mitigate risks.

The Committee may also discuss other matters and duties appointed to it by the Board.

Internal Audit

Ferratum's internal audit function is the responsibility of Ferratum's audit committee, which is responsible for developing, implementing and overseeing internal audit policies and procedures. The audit committee reports on its findings to the board of directors.