Multitude : Corporate Governance Statement 2023 Report

CORPORATE GOVERNANCE STATEMENT

2023

Multitude SE - Corporate Governance Statement 2023

Organisation of the General Meeting

According to the Company's Articles of Association, the General Meeting shall be held in the Company's domicile in Helsinki, Finland or in Frankfurt am Main, State of Hessen, Germany, as resolved by the Board of Directors of the Company. In the Annual General Meeting of 2023 it was resolved to amend the Company's Articles of Association so that the Board of Directors may also resolve that the General Meeting shall be held without a meeting venue so that the shareholders shall exercise their power of decision in full and in real time during the meeting by means of telecommunication and other technical means (remote meeting).

To be able to participate in the General Meeting, a shareholder must be registered on the record date of the General Meeting in Multitude's shareholder register maintained by Euroclear Finland Oy. Shareholders must register for a General Meeting in advance within the time prescribed in the notice. A shareholder may participate in a General Meeting personally or through a duly authorised proxy. The proxy must present a power-of-attorney form for such authorisation. Upon registration for a General Meeting, the shareholder must report to the Company any powers of attorney issued. The shareholder and proxy may have an assistant present at the meeting.

A holder of nominee-registered shares has the right to participate in the General Meeting by virtue of shares, which he/she holds on the record date of the General Meeting and would be entitled to have registered in the shareholders' register of the Company held by Euroclear Finland Oy. The right to participate in the General Meeting requires, in addition, that the shareholder on the basis of such shares has been registered into the temporary shareholders' register held by Euroclear Finland Oy at the latest by the date and time prescribed in the notice to the General Meeting. A notification by a holder of nominee-registered shares for inclusion in the Company's temporary shareholders' register is perceived as prior notice of participation in the General Meeting.

Attendance of the Board of Directors, Managing Director and Auditor at the General Meeting

The Chairman of the Board of Directors and a sufficient number of members of the Board and its committees as well as the CEO shall attend the General Meeting unless there are well-founded reasons for absence. In addition, the auditor shall be present at the Annual General Meeting, unless there are well-founded reasons for absence.

Attendance of a prospective Director at a General Meeting

A person proposed for the first time as Director shall participate in the General Meeting that resolves on his or her election unless there are well-founded reasons for absence.

Shareholders' agreements

A shareholders' agreement is an agreement among the shareholders of a company on the compa-ny's governance and management. A shareholders' agreement can be made when a company is established or during the time of its operation. A shareholders' agreement is binding between the parties thereto. A shareholders' agreement does not bind the company itself unless the company is included in the agreement. In general, the Board of Directors approves a shareholders' agree-ment on behalf of the Company.

Multitude is not a party to a shareholders' agreement regarding Multitude. Multitude is not aware of any shareholders' agreements between Multitude's shareholders.

Board

The Board of Directors principally administers the Company and resolves on the organisation of its operations. The Board of Directors is responsible for the appropriate organisation of the control of the Company's accounts and finances and acts in accordance with the Company's best interest. The Board of Directors is elected by the General Meeting. A member of the Board of Directors may be removed from office at any time by a resolution passed by the General Meeting.

Under Finnish law, it is not necessary for a European company or for a company of a certain size to include employee representatives on the Board of Directors and there are currently no employee representatives on the Board of Directors.

Pursuant to the Articles of Association of the Company, the Board of Directors comprises no fewer than three (3) and no more than nine (9) members. The term of each member of the Board of Direc-tors shall expire at the conclusion of the next Annual General Meeting after the election. Therefore, the entire Board of Directors is elected at each Annual General Meeting.

Pursuant to the Articles of Association of the Company, the Board of Directors elects the Chairman and the deputy Chairman of the Board of Directors from amongst its members.

The Board of Directors has a quorum to adopt resolutions if more than half of its members are present. As the Board of Directors had in the end of the year 2023 six (6) members, this quorum was four (4). A resolution is adopted if it is supported by more than one half of the members present at a meeting. In the event of a tie, the Chairman can cast the deciding vote.

The Board of Directors is responsible for the Company's management and for the due organisation of the Company's operations in accordance with the relevant legislation and the Company's Articles of Association. The Board of Directors controls and monitors the Company's operational management, appoints and dismisses the CEO and approves the major decisions affecting the Company's strategy, capital expenditures, organisation, remuneration and bonus systems covering the management and finances.

Charter of the Board

As part of the Company's corporate governance, Multitude's Board of Directors has approved a charter defining the Board's status, duties and the meeting procedures. The Board's rules of pro-cedure complement the stipulations of the Finnish Companies Act and the Articles of Association of the Company.

The Board represents all of the shareholders of Multitude and strives to advance their interests and those of the Company. The Board is responsible for the administration of the Company and for arranging the operations of the Company in an adequate manner. The Board shall ensure that the controls regarding the Company's accounting and managing of funds and other assets, and other risk management are adequately arranged.

The Board's duties and tasks include, in particular:

1. to ensure that the Company is managed according to sound business principles and that the reporting, controls and risk management are adequate;

2.

to attend to such administrative matters that have not been entrusted to the CEO;

• 3. to appoint and dismiss the CEO and the deputy CEO, if any, and to determine their compensa-tions and other material terms of their contracts;

• 4. after consultation with the CEO to appoint and dismiss the executive officers of the Company and to determine their compensations;

• 5. to establish the organisational structure at the Group's executive level;

• 6. to approve the Company's strategy and to oversee its implementation;

• 7. to approve the Group's annual business plan and budget and to oversee the performance of the same;

• 8. to establish and regularly evaluate the principles in respect of the Group's personnel policies including those related to compensation, and in particular approve structures and target settings for the Company's short and long-term incentive structures;

• 9. to approve the Group's investment guidelines;

• 10. to resolve upon establishing subsidiary companies and upon material changes affecting the same, and upon disposal of property or other material fixed assets, to the corresponding extent that investments in such fixed assets would be resolved upon by the Board, as well as upon mortgaging of property as security for payment of loan, and to resolve upon granting of security for the fulfilment of obligations of third parties or those of the subsidiary companies;

• 11. to propose to the General Meeting the matters that shall be resolved upon by the Shareholders;

• 12. to resolve upon proposing to the General Meeting making of a resolution, or granting the Board the authorisation to make a resolution, on buy-back and disposal of the Company's own shares, emission of new shares, convertible bonds, share options and other similar instruments;

• 13. to resolve upon charitable donations that are not insignificant and other matters of non-operational nature;

• 14. to ensure that the Company's financial statements (including consolidated financial state-ments) and the annual report are prepared in accordance with law, and to make a proposal to the General Meeting on the use of distributable profits of the Company;

• 15. to approve the charter of the Board and to establish the committees of the Board and their compositions and charters;

• 16. to monitor and evaluate the financial reporting process, audit, the effectiveness of internal control and audit and risk management systems, as well as the independence of the auditors and in particular the provision of non-audit services; and

• 17. to assume to attend any matter that does not according to law belong to the General Meeting.

Meetings of the Board

The Board meets as often as appropriate fulfilment of its obligations requires. Multitude's Board of Directors had 15 meetings in 2023. The members of the Board of Directors attended the meetings as follows:

Performance evaluation of the Board

On an annual basis, the Board of Directors assesses its activities and work practices. The Board specifies the criteria to be used in the assessment, which is carried out as an internal self-evaluation.

Composition of the Board

The General Meeting elects the members of the Board of Directors. The Board of Directors of Multitude prepares a list of proposed members of the Board of Directors for consideration by the General Meeting. The candidates proposed by the Board of Directors are reported upon in the meeting notice and on the Company's website.

In accordance with the proposal of the Board of Directors, the Annual General Meeting held on 27 April 2023 reelected Goutam N. Challagalla, Michael A. Cusumano, Jorma Jokela, Kristiina Lep-pänen and Lea Liigus as ordinary members. The Annual General Meeting also elected Ari Tiuk-kanen as new ordinary member. The Board of Directors elected Ari Tiukkanen as the Chairman. In the end of the year 2023, the Board of Directors consisted of the following persons:

Ari Tiukkanen, Chairman, born in 1961, has been the Chairman of the Board of Directors since 2023. Ari joined the Company in 2015 and prior to his current position, he was the Deputy Chief Exec-utive Officer. He studied industrial engineering at Jyväskylä University of Applied Sciences and graduated as BSc (engineering) 1986. His management experience includes serving as a head of Building & Industry business at Metsä Wood from 2012 to 2015, as CEO of Icare Finland / Revenio Group from 2008 to 2012, as commercial director of Paloheimo Group from 2006 to 2008, as head of Building Products business line at Finnforest from 1999 to 2006, as various management posi-tions at Halton Group from 1992 to 1999.

Goutam N. Challagalla, born in 1964, joined the Board of Directors in April 2019. He has studied Economics and Mathematics at Osmania University, Hyderabad, India. He is a Professor of Strat-egy and Marketing at IMD, Lausanne, Switzerland. Prior to IMD, he spent 20 years as a professor at Georgia Tech in Atlanta, USA. He also worked as Principal at The Monitor Group, a strategy consulting company in Boston. At IMD, he is Faculty Director of the Digital Marketing Strategy pro-gram and several custom programs for B2B and B2C clients. His teaching, consulting, and research focuses on strategy with an emphasis on digital transformation, business-to-business commercial management, value-based pricing, sales management, distribution channels, and customer and service excellence. His research has been published in top marketing and management journals such as Journal of Marketing, Journal of Marketing Research, Management Science, Strategic Man-agement Journal, and the Journal of Applied Psychology. He is a recipient of the Maynard Award, which is given to the best paper in the Journal of Marketing (2015). His PhD is from the University of Texas, Austin, USA.

Michael A. Cusumano, born in 1954, has been a member of the Board of Directors since April 2019. He is the SMR Distinguished Professor of Management and Deputy Dean at the MIT Sloan School at the Massachusetts Institute of Technology. He specialises in strategy, product development, and entrepreneurship in computer software as well as automobiles and consumer electronics. During 2016-17, he was on leave as Special Vice President and Dean of Entrepreneurship and Innovation at Tokyo University of Science. He is also a director of Orix Corporation, based in Japan. He has served as editor-in-chief and chairman of the MIT Sloan Management Review and in 2009, he was named one of the most influential people in technology and IT by Silicon.com. He has consulted and lectured for approximately 100 companies and has published 14 books and more than 120 articles. He holds a PhD from Harvard University and completed a postdoctoral fellowship in Pro-duction and Operations Management at the Harvard Business School.

Jorma Jokela, born in 1979, is the CEO and the founder of the Company and has been a mem-ber of the Board of Directors since 2005. He studied accounting at the Commercial College of Kuopio and the Helsinki Business College and holds also an eMBA from IMD in Switzerland. He is the founder of Jokela Capital Oy in Helsinki where he headed the company as CEO from 1998 to 2000. He subsequently sold the Jokela Capital business in 2004. In 2005, he founded the Multi-tude Group and has been its CEO since then. Jorma Jokela is currently a member of the Board of JT Capital Limited, Jokela Capital OÜ and Jokela Capital Oy.

Kristiina Leppänen, born in 1969, has been a member of the Board of Directors since 2022. She has been working in senior financial and leadership positions for over 25 years and has an exten-sive CFO background in global industrial companies. Since April 2023, she is Group CFO of The Infinigate Group, the value-add distributor of cybersecurity, secure network, and secure cloud headquartered in Zug, Switzerland. For the past 3 years was Kristiina Group CFO of Enics, a lead-ing global service provider in electronics manufacturing, where she was responsible for Finance and Controlling, Treasury, Risk Management, IT, Legal Affairs, and Corporate Development. Prior to joining Enics, she spent over four years in charge of Finance and Investor Relations as Cavotec CFO in Switzerland, and almost 5 years as Group CFO of GS Hydro Group in Finland. She holds an MBA in International Finance from the Helsinki School of Economics.

Lea Liigus, born in 1972, is the Head of Legal and Compliance of the Group. She has been a mem-ber of the Board of Directors since 2006. She studied law at the University of Tartu in Estonia and completed Master of Laws (LL.M.) Programme in Contract and Commercial Law at the University of Helsinki in Finland. Before she joined Multitude in 2006, she worked as a lecturer for Commer-cial Law and EU law at the Estonian Business School in Tallinn and as an attorney-at-law special-ised in commercial, financial law and EU law at Sorainen Law Offices in Estonia.

Principles concerning the diversity of the Board

The composition of the Board of Directors should reflect the Company's operations and the mar-kets in which it operates. Sufficient diversity at the Board of Directors level is relevant in ensuring the efficient and optimal work and performance of the Board of Directors.

The Company's Board of Directors has reviewed and confirmed the principles for Board diversity.

Important diversity factors for Multitude are the mutually complementary expertise of the mem-bers, their education and experience in different professional areas, leadership experience, and personal capabilities, as well as experience in an international operating environment, different cultures, and age and gender breakdown.

The Board of Directors shall take account of proposing members from both genders, aligning with the Company's goal of having 38% of its Directors be women by 2025.

In 2023, the composition of the Company's Board of Directors was balanced with regard to the diversity principles. At the end of 2023, 33% of the Board of Directors comprised women.

Independence of Directors

According to the Finnish Corporate Governance Code, the majority of the Directors shall be inde-pendent of the Company. In addition, at least two of the Directors representing this majority shall be independent of significant shareholders of the Company.

The Board shall evaluate the independence of the Directors and report which of them are inde-pendent of the Company and which are independent of significant shareholders. The reasoning for determining that a Director is not independent must also be reported.

Name

Independent of the CompanyIndependent of significant shareholdersShares and share-based rights of each Director and corporations over which he/she exercises control in the Company and its Group companies at the end of year 2023

Three out of six members of the Board, i.e., Jorma Jokela, Lea Liigus and Ari Tiukkanen, are depen-dent on the Company for reasons explained below. Jorma Jokela is also dependent of significant shareholders as he holds, directly and indirectly through corporations over which he exercises control, 55.29 percent of the Company's shares. The remaining Board members, i.e., Goutam N. Challagalla, Michael A. Cusumano and Kristiina Leppänen, are independent of the Company and of significant shareholders of the Company.

Jorma Jokela, CEO, and Lea Liigus, Head of Legal and Compliance, have service contracts with the Company and are therefore dependent of the Company. Both of them have also served as Directors for more than ten consecutive years. Ari Tiukkanen also had a service contract with the Company until the end of April 2023. Ari Tiukkanen is therefore dependent on the Company.

Obligation of Directors to provide information

Each Director shall provide the Board with sufficient information that will allow the Board to eval-uate his or her qualifications and independence and notify the Board of any changes in such information.

The Board of Directors of Multitude has established three permanent committees, an Audit Com-mittee, a People and Culture Committee (former Remuneration Committee) and a Risk Commit-tee. The Board of Directors has confirmed rules of procedure for these committees in accordance with the Finnish Corporate Governance Code 2020. The minimum number of members is three in all the committees. The Board has confirmed written charters for the committees. A new charter was approved by the Company's Board of Directors for the People and Culture Committee on 10 March 2022 and for the Risk Committee on 20 December 2022. The committees report on their work regularly to the Board, but they do not have decision-making powers independent from the Board.

The Company does not have a nomination committee for the preparation of matters pertaining to the nomination of Directors.

Audit Committee

The Audit Committee is established to ensure the proper functioning of corporate governance, in particular to ensure the overseeing of the accounting and financial reporting, the Company's internal control systems and work of external auditors.

In addition, the committee assists the Board of Directors in other duties related to the committee's work as specified by the Board. The purpose of the committee is to assist the Board by preparing the committee-dedicated matters for the Board.

The members of the committee must be sufficiently qualified to perform the responsibilities of the committee and at least one member shall have expertise specifically in accounting or auditing. The members of the committee shall not participate in the daily management of the Company or other companies or foundations consolidated in the consolidated financial statements. Further, the majority of the members of the committee shall be independent of the Company and at least one of the members shall be independent of significant shareholders.

The external auditors and Chief Financial Officer attend the committee meetings on a regular basis. Other senior executives attend the meetings as invited by the committee.

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Multitude SE published this content on 27 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 March 2024 17:36:07 UTC.