UPM Annual Report 2022

GOVERNANCE

UPM

BEYOND FOSSILS

BUSINESSES

RESPONSIBILITY

ACCOUNTS FOR 2022

Governance framework The illustration below summarises the basic regulatory framework for our governance.

Messukeskus, Helsinki (an exhibition and convention centre) on 12 April. Detailed instructions for shareholders wishing to participate in the meeting or follow the web cast are available on the corporate website at www.upm.com/agm2023. For the year 2022, the Board of Directors has proposed a dividend of EUR 1.50 per share to be paid in two instalments. 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 2022 when Berndt Brunow, UPM’s Director since 2002, announced that he would not be available for re-election. The Nomination and Governance Committee conducted its annual review of the structure, size, com position, diversity and succession needs of the Board as a whole. This includes whether the Board reflects an appropriate balance of sound judgement and a diverse range of business expertise, skills, experience, independence, availability of service to the Company and other desired qualities. As a result of a careful selection process, the Nomination and Governance Committee proposed nine members be elected to UPM’s Board of Directors for a one-year term. As proposed by the Nomination and Governance Committee, Henrik Ehrnrooth, Emma FitzGerald, Jari Gustafsson, Piia-Noora Kauppi, Marjan Oudeman, Mar tin à Porta, Kim Wahl and Björn Wahlroos were re-elected, whilst Topi Manner was elected as a new director. All directors are non-executive and their term of office will end upon the closure of the AGM 2023. The shareholders were asked to vote for the

UPM Code of Conduct

Finnish Corporate Governance Code

Articles of Association

UPM

Laws, regulations, guidelines and standards

Board and committee charters

Corporate policies, rules, guidelines and instructions

GROWTH IN A CHANGING ENVIRONMENT Our decision-making, management and operations are guided by our values and by the UPM Code of Conduct. Our governance structure supports good management, responsible business operations and compliance at all levels, with clear responsibilities and reporting lines.

holders and their proxy representatives being present at the meeting venue. UPM also offered a proxy authorisation service, whereupon shareholders had the possibility to authorise an independent proxy repre sentative nominated by the Company. This exceptional AGM arrangement was necessary to ensure the health and safety of the shareholders, employees and other stakeholders, as well as to organise the meeting in a predictable way, allowing equal means for shareholders to participate whilst also ensuring compliance with the prevailing restrictions set by the authorities at that time. The shareholders could partic ipate and exercise their shareholder rights at the AGM by voting in advance, as well as submitting counterproposals and asking questions in writing in advance. A total of 2,737 (2,542) shareholders were represent ed at the meeting and they represented 58.1% (54.2%) of the Company’s shares and voting rights at the time of the AGM. The AGM supported all of the proposals and all decisions at the meeting were made in accordance with the proposals by the Board

of Directors, as well as the Board’s Nomina tion and Governance Committee. The shareholders and the public were able to follow the whole meeting, including greetings by the Board Chair and a review by the President and CEO, via a webcast. The recorded speeches were further made available after the AGM on the corporate website at www.upm.com/agm2022. The AGM adopted the Company’s Finan cial Statements and decided to distribute the same dividend of EUR 1.30 per share as for the previous year and released the mem bers of the Board of Directors and the Presi dent and CEO from liability for the financial year 2021. The dividends, totalling EUR 693 million, were paid on 7 April 2022 to the shareholders who were registered on our list of registered shareholders on 31 March 2022. UPM’s Remuneration Report 2021 for governing bodies was presented to and adopted by the AGM. Information on other decisions made at the AGM can be found later on in this section and on the corporate website at www.upm.com/agm2022. The AGM 2023 will be held at the

UPM complies with all recommendations of the Finnish Corporate Governance Code (CG Code), which is issued by the Finnish Securities Market Association. In accordance with the CG Code, we have published our Corporate Gover nance Statement (CG Statement) for the financial year 2022. It is available on the corporate website at www.upm.com/ governance. We can refer to the CG State ment for information on:

• Our governance structure and management system

General Meeting of shareholders Our Annual General Meeting (AGM) 2022 took place in Helsinki on 29 March 2022. The proposals by the Board of Directors and the Nomination and Governance Commit tee to the AGM were published in January and the notice of the AGM was published in February. In order to prevent the spread of COVID-19, the AGM was arranged under the Finnish temporary Legislative Act (375/2021) and held without the share

• The duties and responsibilities of the Board of Directors and its Committees • The duties and responsibilities of our management bodies • Our management and control proce dures related to internal control, risk management, internal audit, insider administration and related party transactions

102

103

UPM ANNUAL REPORT 2022

UPM ANNUAL REPORT 2022