Nokia’s corporate governance practices are subject to Finnish laws and regulations, Nokia’s Articles of Association, the 2010 Finnish Corporate Governance Code, and other mandatory corporate governance rules of the stock exchanges where Nokia shares are listed, i.e. Helsinki and the New York Stock Exchange.
The Finnish Corporate Governance Code is available at www.cgfinland.fi. The corporate governance rules that are mandatory for foreign private issuers under section 303A of the New York Stock Exchange Listed Company Manual are available at http://nysemanual.nyse.com/lcm/
Deviation from the corporate governance standards
Under the Finnish Corporate Governance Code, companies must disclose if they deviate from an individual recommendation of the Code and provide an explanation for doing so.
In 2014, Nokia was not in full compliance with recommendation 39 of the Finnish Corporate Governance Code, as Nokia’s Restricted Share Plans did not include performance criteria but were time-based only, with a restriction period of at least three years from the grant. Restricted shares are granted only for exceptional retention and recruitment purposes aimed to ensure Nokia is able to retain and recruit talent vital to its future success. In the Restricted Share Plan 2014, the number of the shares to be granted was reduced significantly and they are no longer granted regularly. Under the Restricted Share Plan 2015, restricted shares will vest in three equal tranches over three years, on the first, second and third anniversary of the award, but similar to the 2014 plan, are only used on a highly limited basis and only in exceptional retention and recruitment circumstances.
Under the New York Stock Exchange’s (“NYSE”) corporate governance listing standards, listed foreign private issuers, like Nokia, must disclose any significant ways in which their corporate governance practices differ from those followed by US domestic companies under the NYSE listing standards. There are no significant differences in the corporate governance practices applied by Nokia as compared to those applied by US companies under the New York Stock Exchange corporate governance standards, with the exception that Nokia complies with the requirements of Finnish law with respect to the approval of equity compensation plans. Under Finnish law, stock option plans require shareholder approval at the time of their launch. All other plans that include the delivery of company stock in the form of newly-issued shares or treasury shares require shareholder approval at the time of the delivery of the shares, unless the shareholder approval has been granted through an authorization to the Board, a maximum of five years earlier. The NYSE corporate governance standards require that the equity compensation plans be approved by a company’s shareholders. Nokia aims to minimize the necessity for, or consequences of, conflicts between the laws of Finland and applicable non-domestic requirements.