Nokia 2007 Annual Report Download - page 112

At December 31, 2007, Mr. Kallasvuo, the President and Chief Executive Officer, was the only Board
member who had a service contract with Nokia. For a discussion of the service contract of
Mr. Kallasvuo, see “— Service Contracts” below.
Committees of the Board of Directors
The Audit Committee consists of a minimum of three members of the Board who meet all applicable
independence, financial literacy and other requirements of Finnish law and the rules of the stock
exchanges where Nokia shares are listed, including the Helsinki Stock Exchange and the New York
Stock Exchange. Since May 3, 2007, the Committee has consisted of the following four members of
the Board: Georg Ehrnrooth (Chair), Lalita D. Gupte, Keijo Suila and Vesa Vainio.
The Audit Committee is established by the Board primarily for the purpose of overseeing the
accounting and financial reporting processes of the company and audits of the financial statements of
the company. The Committee is responsible for assisting the Board’s oversight of (1) the quality and
integrity of the company’s financial statements and related disclosure, (2) the external auditor’s
qualifications and independence, (3) the performance of the external auditor subject to the require
ments of Finnish law, (4) the performance of the company’s internal controls and risk management
and assurance function, (5) the performance of the internal audit function, and (6) the company’s
compliance with legal and regulatory requirements. The Committee also maintains procedures for the
receipt, retention and treatment of complaints received by the company regarding accounting,
internal controls, or auditing matters and for the confidential, anonymous submission by employees
of the company of concerns regarding accounting or auditing matters.
Under Finnish law, our external auditor is elected by our shareholders by a simple majority vote at
the Annual General Meeting for one fiscal year at a time. The Committee makes a proposal to the
shareholders in respect of the appointment of the external auditor based upon its evaluation of the
qualifications and independence of the auditor to be proposed for election or reelection. Also under
Finnish law, the fees of the external auditor are approved by our shareholders by a simple majority
vote at the Annual General Meeting. The Committee makes a proposal to the shareholders in respect
of the fees of the external auditor, and approves the external auditor’s annual audit fees under the
guidance given by the shareholders at the Annual General Meeting.
The Committee meets at least four times a year based upon a schedule established at the first
meeting following the appointment of the Committee. The Committee meets separately with the
representatives of Nokia’s management, head of the internal audit function, and the external auditor
in connection with each regularly scheduled meeting. The head of the internal audit function has at
all times direct access to the Audit Committee, without involvement of management. The Audit
Committee convened seven times in 2007. One of the meetings was held through technical
equipment.
The Personnel Committee consists of a minimum of three members of the Board who meet all
applicable independence requirements of Finnish law and the rules of the stock exchanges where
Nokia shares are listed, including the Helsinki Stock Exchange and the New York Stock Exchange. Since
May 3, 2007, the Personnel Committee has consisted of the following members of the Board: Per
Karlsson (Chair), Daniel R. Hesse (until December 2007), Henning Kagermann and Marjorie Scardino.
The primary purpose of the Personnel Committee is to oversee the personnel policies and practices of
the company. It assists the Board in discharging its responsibilities relating to all compensation,
including equity compensation, of the company’s executives and the terms of employment of the
same. The Committee has overall responsibility for evaluating, resolving and making recommenda
tions to the Board regarding (1) compensation of the company’s top executives and their employment
conditions, (2) all equitybased plans, (3) incentive compensation plans, policies and programs of the
company affecting executives and (4) other significant incentive plans. The Committee is responsible
for overseeing compensation philosophy and principles and ensuring the above compensation
programs are performancebased, properly motivate management, support overall corporate
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