UPM Annual Report 2022

GOVERNANCE

UPM

BEYOND FOSSILS

BUSINESSES

RESPONSIBILITY

ACCOUNTS FOR 2022

of shares and votes represented in the AGM 2022 58% shareholders represented in the AGM 2022 2,737

Board of Directors on a single slate, as this has been, unlike in many other countries, a market practice in Finland. The Nomi nation and Governance Committee also believes that this practice helps to ensure that the Board works effectively as a whole, whilst comprising of sufficiently diverse members with varied experience and versatile areas of expertise that mutually complement each other. The composition of the Board is present ed in the table below. The new director, Topi Manner (born 1974), is a Finnish citizen and holds a Master’s degree in Economics and Business Administration from the University of Turku. Manner has been the President and CEO of Finnair Plc since 2019. Previously, he was a member of Nordea Group’s Executive Management and their Head of Personal Banking 2016–2018. He also held various oth er executive roles at Nordea from 2006–2016. He is a Board member for Elisa Corporation and Service Sector Employers PALTA and Chair of the Audit Committee for IATA (the International Air Transport Association). Board, as a whole, to have a broad range of skills, experience and perspectives, as well as knowledge of UPM and other relevant industries, so that the Board can effectively accomplish its responsibilities, in partic ular those pertaining to strategy and risk management. With regards to other factors Board diversity The overall aim of diversity is for the

relevant to Board diversity, it is the Board’s objective to include an appropriate number of directors of different nationalities, ages, genders and lengths of service, as presented in the pie charts on the right. Information on the professional backgrounds of the Board of Directors and their other signif icant commitments is available on pages 112–113 of this report. The Board’s diversity principles are included in the Board and Committee Char ters and, more specifically, in the Board’s Diversity Policy, available at www.upm. com/governance. More information on UPM Board diversity, its related objectives and the results obtained is available in our CG Statement 2022. Director independence With the assistance of the Board’s Nomina tion and Governance Committee, the Board of Directors evaluates the independence of its members both annually and on a continuous basis. Director independence is assessed based on the independence criteria of the Finnish CG Code. The majority of the members on the Board of Directors must be independent of the Company and at least two of these independent members must be independent of any significant shareholders. The independence evaluation of director candidates is one of the key factors in the preparation of the Nomination and Gover nance Committee’s annual proposal for the composition of the Board. The Committee

assesses the independence of members of the Board of Directors on a continuous basis. It also reviews a report on any changes in professional engagements and other com mitments at every meeting to ensure that members are compliant with the indepen

dence criteria. The Committee also assesses how such changes may affect the Board members’ availability for Board-related work and reports to the Board on the outcome of such assessments. In particular, the Commit tee assesses the Board members’ positions

in other publicly listed companies to ensure that the members adhere to best practice with regards to overboarding. According to the Nomination and Governance Commit tee’s assessment, all directors are indepen dent of both the Company and the significant shareholders. High attendance rates at the Board and Committee meetings prove the Board members’ commitment and availabil ity for Board-related work. The attendance rates at the meetings by each member are in the table on the previous page. According to the evaluation carried out by the Board with the assistance of the Nomina tion and Governance Committee, all Board members are independent of the Company’s significant shareholders, as the Company has no controlling shareholder and none of the Company’s shareholders have announced a holding of 10% or more of the Company’s shares or votes attached thereto.

Board diversity – nationality

Board diversity – age

45–49, 22% 50–54, 22% 55–59,11% 60–64, 33% 65–, 11%

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

British, 11% Swiss, 11%

RELEVANT PROFESSIONAL EXPERIENCE

Financial expertise

Board diversity – tenure

Board diversity – education

Relevant industry knowledge

Board diversity – gender 33% 67%

MBA, 3 LL.M, 2 Ph.D. (Econ.), 1 Ph.D., (Chem./Physics), 1 M.Sc. (Politics), 1 M.Sc. (Eng.), 1 M.Sc. (Econ.), 2 BA (Business Econ.), 1

1–3 years, 44% 4–8 years, 22% 9–12 years, 22% > 12 years, 11%

International experience

Risk management experience

Governance and leadership experience

Experience in the planning and implementation of company strategies

ATTENDANCE AT BOARD AND COMMITTEE MEETINGS 2022

ATTENDANCE / NO. OF BOARD MEETINGS

ATTENDANCE/NO. OF COMMITTEE MEETINGS

AVERAGE ATTENDANCE %

BOARD COMPOSITION, 31 DECEMBER 2022

ATTENDANCE %

ATTENDANCE %

DIRECTOR

DIRECTOR SINCE

NO. OF TERMS

AGE (AT THE END OF 2022)

INDEPENDENCE OF THE COMPANY

NON-EXECUTIVE / EXECUTIVE DIRECTOR Non-executive director Non-executive director Non-executive director Non-executive director Non-executive director Non-executive director Non-executive director Non-executive director Non-executive director

Björn Wahlroos , Board and NGC Chair

14/14

100

5/5

100

100

DIRECTOR 1)

Henrik Ehrnrooth , Deputy Chair and NGC member as of 29 March (RC Chair until 29 March) Emma FitzGerald , RC member (AC member until 29 March)

14/14

100

5/5

100

100

Björn Wahlroos (Chair) 2)

2008 2015 2020 2021 2013 2022 2018 2020 2012

15

70 53 55 64 47 48 64 52 62

Independent Independent Independent Independent Independent Independent Independent Independent Independent

Henrik Ehrnrooth (Deputy Chair)

8 3 2 1 5 3

14/14 14/14 14/14 12/12 14/14 14/14 14/14

100 100 100 100 100 100 100

5/5 5/6 5/5 3/3 6/6 4/4 6/6

100

100

Emma FitzGerald Jari Gustafsson Piia-Noora Kauppi

Jari Gustafsson , AC member

83

95

Piia-Noora Kauppi , NGC member

100 100 100 100 100

100 100 100 100 100

10

Topi Manner , Board and RC member as of 29 March

Topi Manner

Marjan Oudeman , AC member

Marjan Oudeman

Martin à Porta , RC Chair as of 29 March, RC member

Martin à Porta

Kim Wahl , AC Chair

Kim Wahl

11

Berndt Brunow , Deputy Chair and NGC member until 29 March

2/2

100

1/1

100

100

1) Berndt Brunow's term ended at the AGM 2022 due to his announcement that he would not be available for re-election 2) Not available for re-election at the AGM 2023

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

104

105

UPM ANNUAL REPORT 2022

UPM ANNUAL REPORT 2022