UPM Annual Report 2021

GOVERNANCE

UPM

BEYOND FOSSILS

STRATEGY

BUSINESSES

RESPONSIBILITY

ACCOUNTS FOR 2021

significant commitments is available on pages 112–113 of this report. The Board’s diversity principles are included in the Board and Committee Charters and, more specifically, in the Board’s Diversity Policy which is available at www.upm.com/governance. More information on UPMBoard diversity, related objectives and the results obtained is available in our CG Statement 2021.

so that the Board can effectively accom plish its responsibilities, in particular those pertaining to strategy and riskmanagement. With regard to other factors relevant to Board diversity, it is the Board’s objective to include an appropriate number of directors of differ ent nationalities, ages, genders and lengths of service, as presented in the pie charts below. Information on the professional backgrounds of the Board of Directors and their other

The new director, Jari Gustafsson (born 1958), is a Finnish citizen and holds a Master’s degree in Political Science from the University of Helsinki. Gustafsson has been the Ambassador of Finland to Greece and Albania since 2020. Previously, he has worked as the Permanent Secretary of the Ministry of Economic Affairs and Employ ment, Finland, as the Ambassador of Fin land to the People’s Republic of China and Mongolia and as the Ambassador of Finland to Japan. He has also been a Board Member at the European Bank for Reconstruction and Development (EBRD) UK and the Deputy Director General at the Ministry for Foreign Affairs of Finland in the Depart ment for External Economic Relations. Board diversity The overall aimof diversity is for the Board, as a whole, to have a broad range of skills, experience and perspectives, as well as knowledge of UPMand relevant industries,

Board of Directors • Sets the Company’s strategic objectives • Reviews and approves financial and other plans relevant to the achievement of these objectives • Reviews the management team’s performance in terms of meeting these objectives The Board’s other primary responsibilities relate to the integrity of the Company’s financial reporting, the effectiveness of internal control and risk management sys tems, and the appointment, remuneration and succession planning of the Company’s senior management. Board composition The composition of the Board changed in 2021 whenAri Puheloinen, UPM’s Director since 2014, and Veli-Matti Reinikkala, UPM’s Director since 2007, announced that they would not be available for re-election. The Nomination andGovernance Committee con ducted its annual reviewof the structure, size, composition, diversity and succession needs of the Board as a whole, including whether the Board reflects an appropriate balance of sound judgement and a diverse range of busi ness expertise, skills, experience, indepen dence, availability of service to the Company and other desired qualities. As a result of a careful selection process, theNomination and Governance Committee decided to propose ninemembers be elected toUPM’s Board of Directors for a one-year term.

Percentage of represented shares and voting rights in the AGM %

Number of shareholders present or represented in the AGM

60

3000

2500

56

2000

52

1500

48

1000

44

500

Board diversity – age

Board diversity – nationality

40

0

2021

2020

2021

2020

Finnish, 56% Dutch, 11% Norwegian, 11%

60–69, 44% 40–49, 11% 70–, 11% 50–59, 33%

As proposed by the Nomination and Governance Committee, Berndt Brunow, Henrik Ehrnrooth, Emma FitzGerald, Pi ia-Noora Kauppi, Marjan Oudeman, Martin à Porta, KimWahl and Björn Wahlroos were re-elected, whilst Jari Gustafsson was elected as a new director to the Board. All directors are non-executive and their term of office will end upon the closure of the AGM 2022. The shareholders were asked to vote on a single slate for the Board of Direc tors, as this has been, unlike in many other countries, a market practice in Finland. The Nomination and Governance Committee also believes that this practice helps to ensure that the Board works effectively as a whole, whilst comprising sufficiently di verse members with varied experience and versatile areas of expertise that mutually complement each other. The composition of the Board is presented in the table below.

RELEVANT PROFESSIONAL EXPERIENCE

British, 11% Swiss, 11%

Financial expertise

Relevant industry knowledge

Board diversity – gender 33% 67%

Board diversity – education

Board diversity – tenure

International experience

MBA, 3 LL.M, 2 Ph.D. (Econ.), 1 Ph.D., MA (Chem./Physics), 1

< 5 years, 44% 5–10 years, 33% > 10 years, 22%

Risk management experience

B.Sc. (Econ.), 1 M.Sc. (Econ.), 1 M.Sc. (Eng.), 1

Governance and leadership experience

M.Sc. (Political Sc.), 1 BA (Business Econ.), 1

Experience in the planning and implementation of company strategies

ATTENDANCE AT BOARD AND COMMITTEE MEETINGS 2021

BOARD COMPOSITION, 31 DECEMBER 2021

ATTENDANCE / NO. OF BOARD MEETINGS

ATTENDANCE/NO. OF COMMITTEE MEETINGS

AVERAGE ATTENDANCE %

ATTENDANCE %

ATTENDANCE %

DIRECTOR SINCE

NO. OF TERMS

AGE (AT THE END OF 2021)

INDEPENDENCE OF THE COMPANY

NON-EXECUTIVE / EXECUTIVE DIRECTOR

DIRECTOR

DIRECTOR 1)

Björn Wahlroos , Board and NGC Chair

9/9 9/9 8/9

100 100

6/6 6/6 6/6

100 100 100

100 100

Björn Wahlroos (Chair)

2008 2002 2015 2020 2021 2013 2018 2020 2012

14 20

69 71 52 54 63 46 63 51 61

Independent Independent Independent Independent Independent Independent Independent Independent Independent

NED NED NED NED NED NED NED NED NED

Berndt Brunow , Deputy Chair and NGC member Henrik Ehrnrooth , RC member, RC Chair as of 30 March Emma FitzGerald , AC member until 30 March and as of 27 April, RC member as of 30 March Jari Gustafsson , Board and AC member as of 30 March Piia-Noora Kauppi , AC Chair until and NGC member as of 30 March

Berndt Brunow (Deputy Chair 2)

89

94

Henrik Ehrnrooth Emma FitzGerald Jari Gustafsson Piia-Noora Kauppi Marjan Oudeman

7 2 1 9 4 2

9/9

100

9/9

100

100

8/8

100

4/4

100

100

9/9

100

6/6

100

100

Martin à Porta

Marjan Oudeman , AC member Martin à Porta , RC member

9/9 9/9 1/1 1/1 9/9

100 100 100 100 100

5/5 6/6 1/1 1/1 5/5

100 100 100 100 100

100 100 100 100 100

Kim Wahl

10

Ari Puheloinen , Board and NGC member until 30 March Veli-Matti Reinikkala , Board and RC Chair until 30 March Kim Wahl , AC member, AC Chair as of 30 March

1) At the AGM 2021 Ari Puheloinen and Veli-Matti Reinikkala's terms ended due to their announcement that they were not available for re-election. 2) Not available for re-election at the AGM 2022.

NGC – Nomination and Governance Committee, RC – Remuneration Committee, AC – Audit Committee

104

105

UPM ANNUAL REPORT 2021

UPM ANNUAL REPORT 2021