UPM Annual Report 2023

GOVERNANCE

UPM

BEYOND FOSSILS

BUSINESSES

RESPONSIBILITY

ACCOUNTS FOR 2023

of shares and votes represented in the AGM 2023 60% shareholders represented in the AGM 2023 3,476

experience and perspectives, as well as knowledge of UPM and other relevant industries so that the Board can effectively carry out its responsibilities, in particu lar those pertaining to strategy and risk management. With regard to other factors 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 114–115 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, which is available at www. upm.com/governance. More information on diversity in UPM’s Board, related objec tives and the results obtained is available in our CG Statement 2023. 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 cri teria 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 candi dates for Director is one of the key factors in the preparation of the Nomination and Governance Committee’s annual propos al 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 commitments at every meeting to ensure that members are compliant with the independence criteria. The Committee also assesses how such changes may affect the Board members’ availability for Board-related work and re ports to the Board on the outcome of such assessments. In particular, the Committee assesses Board members’ positions in other publicly listed companies to ensure that these members adhere to best practice with regard to overboarding. According to the Nomination and Governance Committee’s assessment, all directors are independent of both the Company and the significant shareholders. High attendance rates at the Board and Committee meetings prove the Board members’ commitment and availa bility for Board-related work. The attend ance rates at meetings by each member are shown in the table on the following page. According to the evaluation carried out by the Board with the assistance of the Nomination 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. All directors are non-executive and the Board has also concluded that all directors, including Piia-Noora Kauppi and Kim Wahl,

who have been non-executive directors of the Company for ten or more consecutive years, are independent of the Company. Based on the Board’s overall evaluation of the independence of these directors, their long-standing service does not compromise

their independence and no other factors or circumstances have been identified that could affect their independence. Board-related work in 2023 The Board convened according to its original meeting schedule and held nine meetings in 2023. The Board made visits to Paso de los Toros, Uruguay, and Leuna, Germany, sites of the Company’s two strategic projects. There is no minimum meeting attend ance requirement for Board members. In stead, Board members are expected to attend all meetings unless they have a valid reason for not attending. The average attendance of Board members was 100% (100%) at Board meetings and 100% (89.0%) at Committee meetings. The personal attendance rate of each Board member is presented in the table on page 109. In connection with its meetings,

Board diversity – age

Board diversity – nationality

46–50, 33% 51–55, 22% 56–60, 11% >61, 33%

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

British, 11% Swiss, 11%

RELEVANT PROFESSIONAL EXPERIENCE

Financial expertise

Board diversity – gender 44% 56%

Board diversity – education

Board diversity – tenure

Relevant industry knowledge

MBA, 4 LL.M, 2 M.Sc. (Politics/Econ.), 2 M.Sc. (Econ.), 2 Ph.D. (Chem./Physics), 1 M.Sc. (Eng.), 1 BA (Business Econ.), 1

1–4 years, 56% 5–9 years, 22% >10 years, 22%

International experience

Risk management experience

Governance and leadership experience

Experience in the planning and implementation of company strategies

ATTENDANCE AT BOARD AND COMMITTEE MEETINGS IN 2023

ATTENDANCE / NO. OF BOARD MEETINGS

ATTENDANCE/NO. OF COMMITTEE MEETINGS

AVERAGE ATTENDANCE %

BOARD COMPOSITION, 31 DECEMBER 2023

ATTENDANCE %

ATTENDANCE %

DIRECTOR

DIRECTOR SINCE

NO. OF TERMS

AGE (AT THE END OF 2023)

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

Henrik Ehrnrooth , Board and NGC Chair as of 12 April (Deputy Chair and NGC member until 12 April) Kim Wahl , Deputy Chair as of 12 April and AC Chair Pia Aaltonen-Forsell , Board and AC member as of 12 April

9/9

100

5/5

100

100

DIRECTOR 1)

Henrik Ehrnrooth , Chair Kim Wahl , Deputy Chair Pia Aaltonen-Forsell

2015 2012 2023 2020 2021 2013 2022 2018 2020

9

54 63 49 56 65 48 49 65 53

Independent Independent Independent Independent Independent Independent Independent Independent Independent

9/9 8/8 9/9

100 100 100

5/5 4/4 5/5

100 100 100

100 100 100

12

1 4 3 2 6 4

Emma FitzGerald , RC member

Emma FitzGerald 2) Jari Gustafsson Piia-Noora Kauppi

Jari Gustafsson , NGC member as of 12 April (AC member until 12 April)

9/9

100

5/5

100

100

Piia-Noora Kauppi , NGC member

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

100 100 100 100 100

5/5 5/5 5/5 5/5 1/1

100 100 100 100 100

100 100 100 100 100

11

Topi Manner , RC member

Topi Manner

Marjan Oudeman , AC member

Marjan Oudeman

Martin à Porta , RC Chair

Martin à Porta

Björn Wahlroos, Board and NGC Chair until 12 April

1) Björn Wahlroos' term ended at the AGM 2023 due to his announcement that he would not be available for re-election 2) Not available for re-election at the AGM 2024

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

106

107

UPM ANNUAL REPORT 2023

UPM ANNUAL REPORT 2023