Nokia 2005 Annual Report Download - page 102

out annual ranges and/or individual limits for capital expenditures, investments and divestitures
and financial commitments not to be exceeded without Board approval.
The Board has the responsibility for appointing and discharging the Chief Executive Officer and the
President and the other members of the Group Executive Board. Subject to the requirements of
Finnish law, the independent directors of the Board will confirm the compensation and the
employment conditions of the Chief Executive Officer and the President upon the recommendation
of the Personnel Committee. The compensation and employment conditions of the other members
of the Group Executive Board are approved by the Personnel Committee.
The basic responsibility of the members of the Board is to act in good faith and with due care so
as to exercise their business judgment on an informed basis in what they reasonably and honestly
believe to be the best interests of the company and its shareholders. In discharging that obligation,
the directors must inform themselves of all relevant information reasonably available to them.
Pursuant to the articles of association, Nokia Corporation has a Board of Directors composed of a
minimum of seven and a maximum of ten members. The members of the Board are elected for a
term of one year at each Annual General Meeting, which convenes each March, April or May. Since
the Annual General Meeting held on April 7, 2005, the Board has consisted of ten members. Nokia’s
CEO, Jorma Ollila, also serves as the Chairman of the Board. The other members of the Board are
all non-executive and independent as defined under Finnish rules and regulations. In
January 2006, the Board determined that eight members of the Board are independent, as defined
in the New York Stock Exchange’s corporate governance listing standards, as amended in
November 2004. In addition to the Chairman, Bengt Holmstr¨ om was determined to be
non-independent due to a family relationship with an executive officer of a Nokia supplier of
whose consolidated gross revenues Nokia accounts for an amount that exceeds the limit provided
in the NYSE listing standards, but that is less than 10%. The Board convened thirteen times during
2005, five of the meetings were held by using technical equipment and the average ratio of
attendance at the meetings was 98%. The non-executive directors meet without executive
directors twice a year, or more often as they deem appropriate. Such sessions are presided over by
the Vice Chairman of the Board or, in his absence, the most senior non-executive member of the
Board. In addition, the independent directors meet separately at least once annually. The Board
and each committee also has the power to hire independent legal, financial or other advisors as it
deems necessary.
The Board elects a Chairman and a Vice Chairman from among its members for one term at a
time. On April 7, 2005 the Board resolved that Jorma Ollila should continue to act as Chairman and
that Paul J. Collins should continue to act as Vice Chairman. The Board also appoints the members
and the chairmen for its committees from among its non-executive, independent members for one
term at a time.
Under Finnish law, if the roles of the Chairman and the Chief Executive Officer are combined, the
company must have a President. The responsibilities of the President are defined in the Finnish
Companies Act and other relevant legislation along with any additional guidance and instructions
given from time to time by the Board and the Chief Executive Officer. The responsibilities of the
Chief Executive Officer are determined by the Board.
The Board conducts annual performance self-evaluations, which also include evaluations of the
committees’ work, the results of which are discussed by the Board. The Corporate Governance
Guidelines concerning the directors’ responsibilities, the composition and selection of the Board,
Board committees and certain other matters relating to corporate governance are available on our
website, www.nokia.com.
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