Governance

Cargotec’s Board of Directors includes a minimum of six and a maximum of twelve members. Board members are elected by the AGM for a term of office that expires at the end of the first AGM following their election. The Board elects the Chair and Vice Chair from among its members. The majority of Board members shall be independent of the company and significant shareholders.

The Board’s composition shall support the overall goal of implementing Cargotec´s strategy. According to the Board’s diversity principles, board diversity shall evolve over time and reflect the operations strategy and the future needs of the company. The diversity factors include work experience in our strategic business areas and of the cultures in which we operate, as well as educational background, age and gender. There shall be both genders in the Board, the target being at least two directors of the underrepresented gender. The Nomination and Compensation committee shall pay attention to the diversity criteria, when identifying and proposing new candidates to the Board, as well as when proposing re-election of current members.

The Annual General Meeting held on 23 March 2023 appointed Jaakko Eskola, Raija-Leena Hankonen-Nybom, Ilkka Herlin, Teresa Kemppi-Vasama, Tapio Kolunsarka, Johanna Lamminen, Kaisa Olkkonen and Ritva Sotamaa as Board members. In its organising meeting, the Board elected Jaakko Eskola to continue as Chair of the Board and Ilkka Herlin as Vice Chair of the Board. Outi Aaltonen, Senior Vice President, General Counsel, serves as the Secretary to the Board of Directors.

Duties

The Board confirms Cargotec’s strategy and will monitor its implementation. As stipulated in the Finnish Limited Liability Companies Act and the Articles of Association, the Board is responsible for the management and proper organisation of the company’s operations as well as representing the company. The Board has compiled a written charter for its work that defines its main duties and operating principles. The Board’s responsibilities include approving the company’s annual, half-year and interim financial statements and ensuring that the supervision of accounting and the control of the company’s financial matters is properly organised. The Board decides on significant loans, acquisitions and investments and approves the annual and long-term operational and financial plans as well as risk management principles. Violations against Cargotec’s Code of Conduct are reported to the Board. The Board approves the long- and short-term incentive programmes and their outcome. The Board appoints Cargotec’s CEO and determines the related terms of employment. As defined in the Board annual plan, the Board has theme meetings in which issues associated with one business area at a time or other current theme are discussed. In connection with each meeting, the Board discusses also in the absence of the executive management.

Self-assessment and independence review

The Board reviews its own performance and procedures once a year through internal self-assessment. Moreover, the Board conducts an annual assessment of the independence of its members. According to the assessment conducted in March 2023, the members of the Board are independent of the company and, with the exception of Ilkka Herlin, also independent of significant shareholders in the company. In the overall evaluation, the Board considered the over ten year term of Ilkka Herlin, but considered him still to be independent of the company.

Committees

To improve the efficiency of board work, the Board has set up two permanent committees, the Audit and Risk Management Committee and the Nomination and Compensation Committee and a temporary Demerger Committee. The Board nominates the members and the Chairs of the Committees from among its members and confirms the Committees’ charters. The Committees have no autonomous decision-making power, but prepare issues which will be resolved by the Board. A new temporary Demerger Committee was established in 2023 to support the proposed standalone Kalmar listing readiness preparations.