3 - Stora Enso

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CORPORATE GOVERNANCE Corporate Governance Responsibility is one of Stora Enso’s core values, and in governance terms it translates into a strong commitment to sound principles of corporate governance and sustainability. Stora Enso strives to comply with current governance rules and regulations, and to apply best practices in the fi eld of governance. General Governance Issues The duties of the various bodies within Stora Enso Oyj (Stora Enso or the Company) are determined by the laws of Finland and by the Company’s corporate governance policy, which complies with the Finnish Companies Act and Finnish Securities Market Act. The rules and recommendations of the Helsinki, Stockholm and New York stock exchanges are also followed, where applicable. This corporate governance policy is decided by the Board of Directors (Board). The Board and the Chief Executive Offi cer (CEO) are responsible for the management of the Company. Other governance bodies have an assisting and supporting role. Governance Bodies Executive Management Group (EMG) Shareholders’ Meeting Board of Directors CEO Auditing Management Group (MG) Internal Auditing External Auditors Insider Guidelines 30• STORA ENSO COMPANY 2005 Stora Enso prepares annual and interim fi nancial accounts conforming to International Financial Reporting Standards (IFRS). These reports are published in Finnish, Swedish, English and German. In addition, Stora Enso makes an annual reconciliation with US GAAP (Form 20-F). The Company’s head offi ce is in Helsinki, Finland. It also has an international offi ce in London, United Kingdom and head offi ce functions in Stockholm, Sweden. Stora Enso has one or two offi cial auditors, as decided by the shareholders at the Annual General Meeting (AGM). To the maximum extent possible, corporate actions and corporate records are taken and recorded in English. Board Committees Financial and Audit Committee Investment Committee Compensation Committee Operative Committees Sustainability Committee R&D Committee Nomination Committee Disclosure Committee Objectives and Composition of Governance Bodies The decision-making bodies with responsibility for managing the Company are the Board and the CEO. The operations of the Company are co-ordinated through the Executive Management Group (EMG), Management Group (MG) and various committees. Day-to-day operational responsibility rests with the divisional managements and their operation teams supported by various staff and service functions. Board of Directors Stora Enso is managed by the Board under international corporate governance principles. According to the Company’s articles of association, the Board comprises 6–11 ordinary members appointed by the shareholders at the AGM for a one-year term. It is the policy of the Company that the Board shall have of a majority of independent directors. To be considered “independent”, the Board must resolve that a director has no material relationship with the Company other than as a director. Currently, the Board has ten ordinary members: nine non-executive members who are independent and not affi liated with Stora Enso and one executive member (CEO). All directors are required to deal at arm’s length with the Company and its subsidiaries and to disclose circumstanc-
es that might be perceived as a confl ict of interest. The shareholders at the AGM decide the remuneration of the Board members (including the remuneration of the members of the Board Committees). As a policy, remuneration is paid to nonexecutive members only. The Board supervises the operation and management of Stora Enso and decides on signifi cant matters relating to strategy, investments, organisation and fi nance. The Board is responsible for overseeing management and for the proper organisation of Company operations. It is likewise responsible for overseeing the proper supervision of accounting and control of fi nancial matters. The Board has defi ned a working order, the principles of which are pub- Board Remuneration Vice Board EUR Chairman Chairman Member 2005 135 000 85 000 60 000 2004 135 000 85 000 60 000 2003 135 000 85 000 60 000 lished in the annual report and on the Company’s website. The Board elects a Chairman and a Vice Chairman from among the nonexecutive Board members and appoints the CEO and heads of divisions and staff functions. The Board approves the main organisational structure of the Company. The Board reviews and determines the compensation of the CEO. The Board evaluates its performance annually. The Board also reviews the corporate governance policy annually and amends it when required. The Board’s work is supported through its committees – the Financial and Audit Committee and the Compensation Committee. Each committee’s chairman and members are appointed by the Board annually. The Board meets at least fi ve times a year. The non-executive Board members meet regularly without executive members in connection with the Board meetings. In 2005 The Board of Directors had eleven members until the AGM on 22 March 2005 and subsequently ten members. The Board convened seven times. On average directors attended 90 % of the meetings. Board Interests as of 31 December 2005 A shares R shares Claes Dahlbäck, Chairman 2 541 19 529 Ilkka Niemi, Vice Chairman - - Gunnar Brock - 4 000 Lee A. Chaden - *3 500 Harald Einsmann - *4 800 Jukka Härmälä, CEO - 8 932 Birgitta Kantola - 1 500 Jan Sjöqvist 508 1 943 Matti Vuoria - 9 000 Marcus Wallenberg * ADRs representing R shares 2 541 4 715 Working Order of the Board of Directors The working order describes the working practices of the Board of Directors. A summary of key contents is presented below. Board Meetings Matters to be handled at Board • Approval of Group’s investment • Regularly, at least fi ve times a year, Meetings policy according to a schedule decided in • Matters specifi ed by the Finnish Com- • Approval of major investments advance panies Act • Other matters • Special Board Meetings shall, if • Approval of Business Strategy • Report of the CEO on the Group’s requested by a Board member or the • Matters concerning organisation and operations CEO, be held within 14 days of the personnel • Reports of the Compensation date of request • Decisions concerning the basic Committee and Financial and • Agenda and material shall be deliv- top management organisation Audit Committee by the chairered to Board members one week • Decisions concerning the compomen of the respective commit- before the meeting Information • The Board shall receive information sition of the EMG • Remuneration of the CEO • Appointment and dismissal of the tees. The Nomination Committee’s recommendations and proposals shall be reported to the monthly concerning fi nancial per- CEO and heads of divisions and Board by the Chairman of the formance, the market situation and signifi cant events within the other senior offi cers in the EMG • Appointment of Board Commit- Board. • Approval and regular review of Company’s and the Group’s operations • Board members shall be informed about all signifi cant events immediately tees (including chairmen) • Economic and fi nancial matters • Review of annual budget • Approval of loans and guarantees • Investment matters Corporate Governance and the charters of the Board Committees • Annual self-assessment of Board work and performance • Other matters submitted by a member of the Board or the CEO STORA ENSO COMPANY 2005• 31
Page 2 and 3: Stora Enso’s Annual Report 2005 c
Page 4 and 5: STORA ENSO IN BRIEF Stora Enso in b
Page 6 and 7: DIVISIONS IN BRIEF Publication Pape
Page 8 and 9: STRATEGY LETTER TO SHAREHOLDERS Dea
Page 10 and 11: STRATEGY Improving profi tability -
Page 12 and 13: STRATEGY Strategy in action in 2005
Page 14 and 15: PUBLICATION PAPER Improved asset ma
Page 16 and 17: PUBLICATION PAPER BUSINESS AREAS |
Page 18 and 19: FINE PAPER Cost-effi cient producti
Page 20 and 21: FINE PAPER BUSINESS AREAS More than
Page 22 and 23: PACKAGING BOARDS Getting closer to
Page 24 and 25: PACKAGING BOARDS BUSINESS AREAS Cor
Page 26 and 27: FOREST PRODUCTS Enhancing efficienc
Page 28 and 29: FOREST PRODUCTS BUSINESS AREAS Wood
Page 30 and 31: HUMAN RESOURCES People performance
Page 34 and 35: CORPORATE GOVERNANCE Chief Executiv
Page 36 and 37: CORPORATE GOVERNANCE Remuneration C
Page 38 and 39: BOARD OF DIRECTORS Board of Directo
Page 40 and 41: EXECUTIVE MANAGEMENT GROUP Executiv
Page 42 and 43: MANAGEMENT GROUP Management Group M
Page 44 and 45: SHARES AND SHAREHOLDERS Shares and
Page 46 and 47: SHARES AND SHAREHOLDERS Incentive p
Page 48 and 49: FINANCIAL SUMMARY Consolidated Inco
Page 50 and 51: FINANCIAL SUMMARY Consolidated Cash
Page 52 and 53: FINANCIAL SUMMARY Key Figures 1997
Page 54 and 55: ORGANISATION CHART Stora Enso’s o
Page 56 and 57: North America North America is the
Page 58: Colorado Stora Enso Oyj P.O. Box 30

3 - Stora Enso

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